<PAGE>

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 2003

                          Registration No. 333-________


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



                                    FORM S-8
                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933



                               TMI HOLDINGS, INC.
            (Exact name of registration as specified in its charter)



             Florida                                    65-0309540
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)


                           11924 Forest Hill Boulevard
                                  Suite 22-204
                            Wellington, Florida 33414
                                 (954) 579-8599
          (Address and Telephone Number of Principal Executive Offices)


                               TMI HOLDINGS, INC.
                         2003 Qualified Securities Plan
                       2003 Non-Qualified Securities Plan
                            (Full Title of the Plan)

                                   Copies to:

             Scott Siegel                            James M. Schneider, Esq.
        Chief Executive Officer                      Schneider Weinberger LLP
          TMI Holdings, Inc.                        2499 Glades Road, Suite 108
 11924 Forest Hill Blvd., Suite 22-204                 Boca Raton, FL 33431
         Wellington, FL  33414                            (561) 362-9595
            (954) 579-8599


<PAGE>



                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                                      Proposed              Proposed
                                                       maximum               maximum
                                                      offering              aggregate            Amount of
  Title of securities         Amount to be            price per             offering           registration
   to be registered            registered             share                 price                   fee
-------------------------------------------------------------------------------------------------------------

<S>                           <C>                      <C>                <C>                      <C>

Common Stock, $.01
par value per share (1)       6,000,000                $0.35              $2,100,000               $169.89
</TABLE>



(1)      This  calculation  is made  solely for the purpose of  determining  the
         registration  fee pursuant to the  provisions  of Rule 457(h) under the
         Securities Act, and is calculated upon the average of the bid and asked
         price of the securities on the Over-the-Counter-Bulletin  Board on June
         30, 2003.



<PAGE>


                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

       This registration statement relates to two separate prospectuses.

         Items 1 and 2 of this Part I, and the documents  incorporated herein by
reference  pursuant to Item 3 of Part II of this Form S-8,  constitute the first
prospectus relating to issuances to our employees,  consultants and others of up
to 2,640,000  shares of common stock pursuant to our 2003  Qualified  Securities
Plan and 2003  Non-Qualified  Securities  Plan (the  "Plans").  Pursuant  to the
requirements  of Form S-8 and Rule 428, we will deliver or cause to be delivered
to Plan  participants  any required  information as specified by Rule 428(b)(1).
The second  prospectus,  referred to as the reoffer  prospectus,  relates to the
reoffer or resale of any shares  that are  deemed to be  control  securities  or
restricted securities under the Securities Act of 1933.

                                   PROSPECTUS

ITEM 1. PLAN INFORMATION

         We  established  the Plans  effective  May 2, 2003,  to provide us with
flexibility  and to conserve our cash resources in  compensating  certain of our
technical,  administrative  and  professional  employees  and  consultants.  The
issuance of shares under the Plans are  restricted  to persons and firms who are
closely-related   to  us  and  who  provide  services  in  connection  with  the
development  and  production  of our  products  and  services  or  otherwise  in
connection  with our business.  The Plans  authorize us currently to issue up to
2,640,000  shares of our common stock.  Shares must be issued only for bona fide
services and may not be issued under the Plans for services in  connection  with
the offer and sale of  securities  in a capital  raising  or  capital  promoting
transaction.  Shares  are  awarded  under the  Plans  pursuant  to  individually
negotiated  compensation contracts as determined and/or approved by the Board of
Directors  or  compensation   committee.   The  eligible   participants  include
directors,  officers, employees and non-employee consultants and advisors. There
is no limit as to the number of shares that may be awarded  under the Plans to a
single participant. We anticipate that a substantial portion of the shares to be
issued  under  the  Plans  will be  issued  as  compensation  to our  employees,
directors,  technical  consultants and advisors who provide development services
in the development and promoting of our various products and services.

         The plans do not require  restrictions on the transferability of shares
issued  thereunder.  However,  such shares may be  restricted  as a condition to
their issuance where the Board of Directors deems such restrictions appropriate.
The Plans are not subject to the Employee  Retirement  Income  Securities Act of
1974  ("ERISA").  Restricted  shares  awarded under the Plans are intended to be
fully taxable to the recipient as earned income.

         We will  provide  without  charge,  upon written or oral  request,  the
documents  incorporated  by reference in Item 3 of Part II of this  Registration
Statement.  These  documents are  incorporated by reference in the Section 10(a)
prospectus.  We will also provide without charge,  upon written or oral request,
all other  documents  required to be  delivered to  recipients  pursuant to Rule
428(b).  Any and all  such  requests  shall be  directed  to the  Company  at is
principal  office at 11924  Forest Hill  Boulevard,  Suite  22-204,  Wellington,
Florida 33414, attention: Chief Executive Officer.

         THESE   SECURITIES  HAVE  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  THE
SECURITIES  AND  EXCHANGE  COMMISSION,  NOR HAS  THE  COMMISSION  PASSED  ON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

         No person has been  authorized by us to give any information or to make
any  representation  other than as contained in this prospectus and, if given or
made, such information or representation  must not be relied upon as having been
authorized by us. Neither the delivery of this  prospectus nor any  distribution
of the shares of common stock issuable under the terms of the Plans shall, under
any  circumstances,  create any implication that there has been no change in our
affairs since the date hereof.

Our principal offices are located at:

                    11924 Forest Hill Boulevard, Suite 22-204
                            Wellington, Florida 33414
                            Telephone (954) 579-8599.

THIS  PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.

<PAGE>



PROSPECTUS

                               REOFFER PROSPECTUS

                               TMI HOLDINGS, INC.

                        6,000,000 SHARES OF COMMON STOCK
                                ($.01 PAR VALUE)

         This  prospectus  forms  a  part  of a  registration  statement,  which
registers an  aggregate  of 6,000,000  shares of common stock issued or issuable
from time-to-time  under the TMI Holdings,  Inc. 2003 Qualified  Securities Plan
(the  "Qualified  Plan")  and  the  2003  Non-Qualified   Securities  Plan  (the
"Non-Qualified Plan") (collectively the "Plans").

         TMI  Holdings,  Inc. is referred  to in this  prospectus  as "TMI," the
"Company,"  "we," "us" or "our." The 6,000,000 shares covered by this prospectus
are referred to as the  "shares."  Persons who are issued  shares are  sometimes
referred to as the "selling security holders."

         This  prospectus also covers the future resale of shares by persons who
are our "affiliates"  within the meaning of federal securities laws.  Affiliated
selling  security  holders  may sell all or a portion of the shares from time to
time in the  over-the-counter  market, in negotiated  transactions,  directly or
through  brokers or otherwise,  and at market  prices  prevailing at the time of
such  sales  or at  negotiated  prices,  but  which  may  not  exceed  1% of our
outstanding common stock in any three month period.

         We will not  receive  any  proceeds  from  sales of shares  by  selling
security holders.

         These   securities  have  not  been  approved  or  disapproved  by  the
Securities and Exchange Commission nor has the Commission passed on the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.


         This  prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.

                  The date of this prospectus is July 1, 2003.


<PAGE>




                              AVAILABLE INFORMATION

         We are  subject to the  informational  requirements  of the  Securities
Exchange Act of 1934, as amended, and, in accordance therewith, we file reports,
proxy  statements  and  other  information  with  the  Securities  and  Exchange
Commission.  Reports,  proxy  statements  and other  information  filed with the
Commission can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street,  N.W.,  Washington,  D.C. 20549.  Copies of this
material  can also be obtained  at  prescribed  rates from the Public  Reference
Section of the  Commission  at its principal  office at 450 Fifth Street,  N.W.,
Washington,  D.C. 20549. The Commission also maintains a website on the Internet
that contains  reports,  proxy and information  statements and other information
regarding   registrants  that  file   electronically   with  the  Commission  at
http://www.sec.gov.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The  following   documents   filed  by  us  with  the   Commission  are
incorporated herein by reference and made a part hereof:

          -    Quarterly Report on Form 10-QSB filed on June 17, 2003
          -    Annual Report on Form 10-KSB filed on May 23, 2003
          -    Form 8-K Current Report filed on June 9, 2003 and Amended on June
               11, 2003
          -    Definitive Information Statement filed on June 12, 2003

         All  reports  and  documents  filed by us pursuant to Section 13, 14 or
15(d) of the Exchange  Act,  prior to the filing of a  post-effective  amendment
which  indicates  that all  securities  offered  hereby  have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this prospectus.
         We hereby undertake to provide without charge to each person, including
any beneficial  owner, to whom a copy of the prospectus has been  delivered,  on
the written  request of any such person,  a copy of any or all of the  documents
referred to above which have been or may be  incorporated  by  reference in this
prospectus,  other than exhibits to such  documents.  Written  requests for such
copies  should be directed to Corporate  Secretary,  TMI Holdings,  Inc.,  11924
Forest Hill Boulevard, Suite 22-204, Wellington, Florida 33414.




                                       4
<PAGE>






                                   THE COMPANY

INTRODUCTION

         On  January  31,  2003,  the  Company  acquired  100% of the assets and
outstanding  stock of Kina'ole  Development  Corporation  (Kina'ole"),  a Hawaii
corporation.  Kina'ole is a wholly  owned  subsidiary  of the Company and is the
Company's only current business operation.  Going forward, the Company's current
plans are to divest  Kina'ole and pursue the  acquisition of undervalued  and/or
unused  manufacturing  or other assets or services.  The Company has  identified
possible  acquisition  opportunities,  and is in  very  early  discussions  with
potential acquisition candidates.

         The Company  acquired the Kina'ole shares from William Michael Sessions
and John W. Meyers, who were then directors of the Company. Messrs. Sessions and
Meyers had previously acquired their capital stock interests in the Company from
Mr. Matt Dwyer who,  in turn,  had  acquired  the stock  interest  from Mr. Marc
Douglas.  Prior to the acquisition,  the Company had not engaged in any material
business operations in over a year.

         Kina'ole  is  located  in Lihue,  Hawaii,  and  through  joint  venture
arrangements  with dealerships on each Hawaiian  island,  Kina'ole plans to sell
manufactured homes to retail customers.  Kina'ole also develops  subdivisions of
manufactured homes and has an unrelated installation company that, as a licensed
contractor,  completes the  foundation  and site work as well as installing  the
manufactured homes. Due to the inherent uncertainty in the housing market, there
is no guarantee that Kina'ole will be successful in producing manufactured homes
and/or finding suitable locations for their installation.

HISTORICAL OPERATIONS

         Until August 2001,  the Company  managed and operated  discount  retail
outlets  known  as  thrift  stores,  which  dealt in new and  used  articles  of
clothing,  miscellaneous household items, furniture, bric-a-brac and antiques at
discounted  prices.  In 2001, the Company operated six thrift stores in Florida.
These stores and all of the Company's  other  business units were sold on August
27,  2001,  in a  transaction  involving  the sale of  substantially  all of the
Company's assets to Thrift Ventures,  Inc., a corporation that was controlled by
one of the then Company's principal stockholders at that date.

         After the sale of the Company's  assets to Thrift  Ventures,  Inc., the
Company's  sole activity was to identify  potential  acquisition  candidates and
attempting to negotiate and complete the  acquisition of an operating  business.
In October 2001, the Company entered into a non-binding  letter of intent with a
privately held company for a transaction that would have resulted in a change in
control of the Company.  The letter of intent was terminated in February 2002 by
mutual agreement of the parties.

         In 2002, the Company underwent two changes of voting control, until its
current management  acquired voting control of the Company on February 21, 2003.
Currently, the Company's only business is the sale of manufactured homes through
Kina'ole, the Company's wholly-owned subsidiary. Due to the inherent uncertainty


                                       5
<PAGE>

in the housing  market there is no guarantee that Kina'ole will be successful in
producing  manufactured  homes  and/or  finding  suitable  locations  for  their
installation.  The Company is  currently  seeking  other  potential  acquisition
candidates.

         The Company currently has no employees. Mr. Scott Siegel, the Company's
sole officer and one of its directors is an independent contractor. Kina'ole has
four employees.

RECENT DEVELOPMENTS

         As  previously  reported  in the  Company's  Schedule  14C  Information
Statement filed with the Securities and Exchange  Commission and provided to the
shareholders of TMI, the Board of Directors and the holders of a majority of the
voting  capital  stock  interest of TMI  approved an increase in the  authorized
common stock of the Company from 1,500,000 shares to 30,000,000 shares of common
stock. In addition,  the Company has adopted and obtained  approval for its 2003
Qualified  Securities  Plan and 2003  Non-Qualified  Securities  Plan.  Previous
shareholder approval was ratified anew on June 17, 2003.

         The Company, along with its Chief Executive Officer, Scott Siegel, were
recently  named in a lawsuit  filed in the  Circuit  Court for  Broward  County,
Florida (Marc Douglas v. Matthew P. Dwyer,  William  Michael  Sessions,  John W.
Meyers,  Scott Siegel, Neil Dolgin and TMI Holdings,  Inc. - Case No. 03-10440).
TMI had  previously  described  the prospect of such  litigation  in its various
reports under the  Securities  Exchange Act of 1934.  The suit seeks damages and
recovery of securities  previously  transferred to various parties in connection
with the  prior  transfer  of  control  of the  Company  by the  plaintiff.  The
complaint  also  alleges a civil  conspiracy  by Siegel and TMI to  prevent  Mr.
Douglas,  a former  officer and  director,  from  receiving  the benefits  under
various contracts he entered into with subsequent  officers and directors of the
Company  relating to the  purchase  of  securities  of the  Company  which could
potentially affect the control of TMI. This suit also claims that TMI as well as
Mr. Siegel  breached  various  contracts  affecting the  plaintiff.  Among other
remedies,  the plaintiff is seeking damages and injunctive  relief.  The Company
was only recently served with this lawsuit and is evaluating the various counts,
and both the Company and Mr. Siegel believe they have  meritorious  defenses and
claims, but will also seek an amicable resolution with the plaintiff.


             RISK FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS

         Our  future  results  of  operations  involve  a number  of  risks  and
uncertainties.  The  following  paragraphs  discuss a number of risks that could
impact the Company's financial condition and results of operations.

WE HAVE NOT COMMENCED REVENUE-PRODUCING  OPERATIONS, AND THE LIMITED INFORMATION
AVAILABLE ABOUT US MAKES AN EVALUATION OF US DIFFICULT

         We have  conducted  limited  operations,  and we have little  operating
history that permits you to evaluate  our  business and our  prospects  based on
prior  performance.  You must  consider  your  investment in light of the risks,
uncertainties,  expenses  and  difficulties  that  are  usually  encountered  by


                                       6
<PAGE>

companies in their early stages of  development.  There can be no assurance that
we will  successfully  address such risks, and the failure to do so could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

TMI HAS LIMITED HISTORICAL OPERATIONS WITH SUBSTANTIAL POTENTIAL CAPITAL NEEDS

         TMI has a limited  operating  history  and limited  operations,  and no
revenues  since the  commencement  of its 2002 fiscal year.  In addition,  as of
March 30, 2003, the Company had insufficient  cash available to satisfy its cash
requirements  prospectively through December 28, 2003. The Company will continue
to need  additional  cash  infusions  in order for it to continue to develop and
implement  a  business  plan.  Even  if the  Company  acquires  short-term  cash
resources,  it will likely need further debt or equity funding in order to bring
products  or  services  to  market.   However,   there  are  no   agreements  or
understandings for such financing as of this time.

THERE IS SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN

         The  Company's  ability to continue as a going  concern is dependent on
its ability to raise funds to implement its  development of a business plan. The
Company's  poor  financial  condition  could  inhibit  its  ability to achieve a
business plan, due to current operations that are reflecting substantial losses.
The future  prospect of  profitability  is  severely in doubt.  Because of these
difficulties,  our independent  auditors have expressed  substantial doubt as to
our ability to continue as a going concern.

LACK OF FUNDING WILL ADVERSELY AFFECT OUR ABILITY TO GENERATE REVENUES

         The  Company's  goals are all  contingent  upon  raising debt or equity
funding.  Currently  there  are  limited  sources  for such  funding.  There are
significant risks, difficulties,  delays and unforeseen expenses associated with
companies  with limited or no operating  history.  Constraints  we face due to a
lack of funding include:

          -    Inability to generate  necessary  revenue to operate for the next
               12 months or thereafter;
          -    Operating costs that may exceed our current estimates;
          -    Unanticipated development expenses; and
          -    The Company's ability to generate  sufficient  revenues to offset
               the substantial costs of operating our business.

START-UP EXPENSES AND FUTURE LOSSES WILL ADVERSELY AFFECT OUR OPERATIONS

         Because of  significant  up-front  expenses  required to enter into new
businesses,  the Company anticipates that it may incur losses until revenues are
sufficient  to cover its  operating  costs.  Future losses are likely before our
operations  become  profitable.  As a result of the Company's  lack of operating
history, you will have no basis upon which to accurately forecast the Company's:

          -    Total assets, liabilities, and equity;
          -    Total revenues;
          -    Gross and operating margins; and
          -    Labor costs.


                                       7
<PAGE>

Accordingly,  any subsequent  business plans may not either materialize or prove
successful, and the Company may never be profitable.

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE

         TMI does not presently intend to pay dividends on our common stock. TMI
has never paid  dividends on our common stock and does not  presently  intend to
pay cash dividends on our common stock.  Any future  decisions as to the payment
of dividends will be at the  discretion of TMI's Board of Directors,  subject to
applicable law.

OUR MANAGEMENT MAY BE UNABLE TO EFFECTIVELY INTEGRATE FUTURE ACQUISITIONS AND TO
MANAGE  OUR  GROWTH,  AND WE MAY BE  UNABLE  TO FULLY  REALIZE  ANY  ANTICIPATED
BENEFITS OF ANY ACQUISITION

         Our business strategy includes growth through  acquisition and internal
development.  We are  subject  to  various  risks  associated  with  our  growth
strategy,  including  the risk that we will be unable to  identify  and  recruit
suitable  acquisition  candidates  in the future or to integrate  and manage the
acquired  companies.  Acquired  companies'  histories,  geographical  locations,
business  models  and  business  cultures  can be  different  from  ours in many
respects.  If we should consummate one or more  acquisitions,  our directors and
senior  management  will  face a  significant  challenge  in  their  efforts  to
integrate our business and the business of the acquired companies or assets, and
to effectively  manage our continued growth.  There can be no assurance that our
efforts to integrate the operations of any acquired assets or companies acquired
in the  future  will be  successful,  that we can  manage our growth or that the
anticipated benefits of these proposed acquisitions will be fully realized.  The
dedication of management  resources to these efforts may detract  attention from
our  day-to-day  business.  There can be no  assurance  that  there  will not be
substantial  costs  associated  with these  activities  or of the success of our
integration efforts, either of which could have a material adverse effect on our
operating results.

OUR  STRATEGY  OF  SEEKING  JOINT   VENTURES  OR  STRATEGIC   ALLIANCES  MAY  BE
UNSUCCESSFUL

         We may also  choose to expand our  operations  by  entering  into joint
ventures or other strategic  alliances with other parties.  Any such transaction
would be  accompanied by the risks  commonly  encountered in such  transactions.
These include,  among others,  the difficulty of assimilating the operations and
personnel and other various  factors.  There can be no assurance should we enter
into any  strategic  alliance  with a third party that we will be  successful in
overcoming  these risks or any other  problems  encountered  in connection  with
joint ventures or other strategic alliances.

WE DEPEND ON THE  CONTINUED  SERVICES  OF SCOTT  SIEGEL  AND ON OUR  ABILITY  TO
ATTRACT AND MAINTAIN OTHER QUALIFIED EMPLOYEES

         Our future success  depends on the continued  services of Scott Siegel,
our Chief Executive Officer. The loss of his services would be detrimental to us
and could have a material  adverse effect on our business,  financial  condition
and results of operations. We do not currently maintain key-man insurance on his
life.  Our future  success is also  dependent on our ability to identify,  hire,
train and retain other qualified managerial and other employees. Competition for
these  individuals  is intense  and  increasing.  We may not be able to attract,
assimilate,  or retain  qualified  technical  and  managerial  personnel and our
failure to do so could have a material adverse effect on our business, financial
condition and results of operations.


                                       8
<PAGE>

OUR COMMON STOCK IS THINLY TRADED AND AN ACTIVE AND VISIBLE  TRADING  MARKET FOR
OUR COMMON STOCK MAY NOT DEVELOP

         Our  common  stock  is  currently  traded  on a  limited  basis  on the
Over-the-Counter  Bulletin  Board under the symbol  "TMIO." The quotation of our
common  stock on the OTCBB does not assure  that a  meaningful,  consistent  and
liquid trading market currently  exists. We cannot predict whether a more active
market for our common  stock will  develop in the  future.  In the absence of an
active trading market:

          -    investors  may have  difficulty  buying and selling or  obtaining
               market quotations;
          -    market visibility for our common stock may be limited; and
          -    a lack of  visibility  for our common stock may have a depressive
               effect on the market price for our common stock.

THE SALE OF SHARES  ELIGIBLE FOR FUTURE SALE COULD HAVE A  DEPRESSIVE  EFFECT ON
THE MARKET PRICE FOR OUR COMMON STOCK

         As of the date of this prospectus, there are 7,589,675 shares of common
stock issued and outstanding.

         Of the  currently  issued and  outstanding  shares,  32,650  restricted
shares  of  common  stock  have  been  held  for in  excess  of one year and are
currently available for public resale pursuant to Rule 144 promulgated under the
Securities  Act ("Rule 144").  Unless  registered on a form other than Form S-8,
the  resale of our  shares of Common  Stock  owned by  officers,  directors  and
affiliates is subject to the volume  limitations  of Rule 144. In general,  Rule
144 permits our shareholders who have  beneficially  owned restricted  shares of
common  stock  for at least  one  year to sell  without  registration,  within a
three-month  period,  a number of shares not  exceeding  one percent of the then
outstanding shares of common stock. Furthermore,  if such shares are held for at
least two years by a person not affiliated with us (in general,  a person who is
not one of our executive  officers,  directors or principal  shareholders during
the  three-month  period prior to resale),  such  restricted  shares can be sold
without any volume limitation.

         Sales  of  our  common  stock  under  Rule  144  or  pursuant  to  such
registration  statement may have a depressive effect on the market price for our
common stock.

         IT IS NOT POSSIBLE TO FORESEE ALL RISKS WHICH MAY AFFECT US.  MOREOVER,
WE CANNOT PREDICT WHETHER WE WILL  SUCCESSFULLY  EFFECTUATE OUR CURRENT BUSINESS
PLAN. EACH  PROSPECTIVE  PURCHASER IS ENCOURAGED TO CAREFULLY  ANALYZE THE RISKS
AND MERITS OF AN  INVESTMENT  IN THE SHARES AND SHOULD  TAKE INTO  CONSIDERATION
WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE RISK FACTORS DISCUSSED ABOVE.



                                       9
<PAGE>

                TMI HOLDINGS, INC. 2003 QUALIFIED SECURITIES PLAN

GENERAL

         On May 2,  2003,  the  Board  of  Directors  of the  Company  approved,
declared it advisable  and in the  Company's  best  interests  and directed that
there be  submitted to the holders of a majority of the  Company's  voting stock
for action by written consent, the TMI Holdings,  Inc. 2003 Qualified Securities
Plan (the "2003 Qualified  Securities Plan"). On May 2, 2003, the 2003 Qualified
Securities  Plan was approved by written consent of a majority of voting Capital
Stock  interest of the Company's  shareholders,  which were ratified on June 17,
2003.

PURPOSE

         The  purpose of the 2003  Qualified  Securities  Plan is to promote the
interests of the Company  (including its  subsidiaries)  and its shareholders by
using  investment  interests in the Company to attract,  retain and motivate its
management and other persons,  including officers,  directors, key employees and
certain consultants,  to encourage and reward such persons' contributions to the
performance  of the Company and to align their  interests  with the interests of
the Company's  shareholders.  In furtherance of this purpose, the 2003 Qualified
Securities  Plan  authorizes the granting of the following  types of stock-based
awards (each, an "Award"):

          -    stock   options   (including    incentive   stock   options   and
               non-qualified stock options);
          -    restricted stock awards;
          -    unrestricted stock awards; and
          -    performance stock awards.

Each of these types of Awards is described below under "Awards."

ELIGIBILITY

         Key employees (including employees who are also directors or officers),
directors and certain  consultants of the Company or any subsidiary are eligible
to be granted Awards under the 2003 Qualified  Securities Plan at the discretion
of the Board of Directors. In determining the eligibility of any person, as well
as in determining the number of shares to be covered by an Award and the type or
types of Awards to be made, the Board of Directors may consider:

          -    the position,  relationship,  responsibilities  and importance of
               the person to the Company; and
          -    such other factors as the Board of Directors deems relevant.

Selected consultants may participate in the 2003 Qualified Securities Plan if:

          -    the  consultant  renders bona fide services to the Company or one
               of its subsidiaries;
          -    the services  rendered by the  consultant  are not in  connection
               with  the  offer  or  sale  of  securities  in a  capital-raising
               transaction and do not directly or indirectly promote or maintain
               a market for the Company's securities; and


                                       10
<PAGE>

          -    the consultant is a natural  person who has  contracted  directly
               with the  Company or a  subsidiary  of the Company to render such
               services.

ADMINISTRATION

         The 2003 Qualified  Securities  Plan currently is  administered  by the
Board  of  Directors.  In  the  future,  the  Board  of  Directors  may  form  a
Compensation  Committee to administer  the 2003 Qualified  Securities  Plan. Any
Compensation Committee must be comprised of at least two non-employee directors.
If  a  Compensation  Committee  is  formed  to  administer  the  2003  Qualified
Securities  Plan,  the Board of  Directors  will  delegate  to the  Compensation
Committee full authority, in its discretion, to:

          -    select  the  persons  to  whom  Awards  will be  granted  (each a
               "Participant");
          -    grant Awards under the 2003 Qualified Securities Plan;
          -    determine the number of shares to be covered by each Award;
          -    determine the nature, amount,  pricing, timing and other terms of
               the Award;
          -    interpret,  construe and  implement  the  provisions  of the 2003
               Qualified Securities Plan (including the authority to adopt rules
               and regulations for carrying out the purposes of the plan); and
          -    terminate, modify or amend the 2003 Qualified Securities Plan.

         The 2003 Qualified  Securities Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.

SHARES SUBJECT TO THE PLAN

         A total of 140,000  shares of Common Stock  (subject to  adjustment  as
described  below) are currently  reserved for issuance  under the 2003 Qualified
Securities  Plan,  which  may  be  increased  from  time  to  time  upon  proper
authorization. Shares of common stock issued under the 2003 Qualified Securities
Plan may be authorized but unissued shares, or shares reacquired by the Company,
including  shares  purchased on the open market.  The  unexercised,  unearned or
yet-to-be acquired portions of any Award that expire, terminate or are canceled,
and shares of common  stock issued  pursuant to Awards under the 2003  Qualified
Securities  Plan that are reacquired by the Company  pursuant to the terms under
which such shares were  issued,  will again  become  available  for the grant of
further Awards.

ADJUSTMENT

         In general,  the  aggregate  number of shares as to which Awards may be
granted to Participants under the 2003 Qualified Securities Plan, the number and
kind of shares thereof covered by each outstanding  Award,  and/or the price per
share  thereof in each such Award  will,  upon a  determination  of the Board of
Directors,  all be proportionately  adjusted for any increase or decrease in the
number of issued shares of common stock resulting from an increase,  decrease or
exchange in the outstanding  shares of common stock or additional  shares or new
or different  shares are  distributed in respect of such shares of common stock,
through merger,  consolidation,  sale or exchange of all or substantially all of
the assets of the Company, reorganization,  recapitalization,  reclassification,
stock dividend, stock split, reverse stock split, spin-off or other distribution
with respect to such shares.  On May 1 of each year, the number of shares in the
2003  Qualified  Securities  Plan shall  automatically  be adjusted to an amount
equal to ten percent (10%) of the issued and outstanding stock of the Company on
April 30 of the immediately preceding year.


                                       11
<PAGE>

         Fractional  interests will not be issued upon any  adjustments  made by
the Board or Directors;  however,  the committee may, in its discretion,  make a
cash  payment in lieu of any  fractional  shares of common  stock  issuable as a
result of such adjustments.

AWARDS

STOCK OPTIONS

         Under the 2003  Qualified  Securities  Plan, the Board of Directors may
grant either  incentive stock options or nonqualified  stock options.  Incentive
stock options and non-qualified  stock options may be granted for such number of
shares of common  stock as the Board of  Directors  determines,  so long as such
number of shares does not exceed the amount  permitted under the plan, or in the
case of incentive stock options,  the amount  permissible  under I.R.C.  Section
422.

         The exercise  price for each stock option is determined by the Board of
Directors.  Stock  options must have an exercise  price of at least 85% (100% in
the case of incentive  stock options,  or at least 110% in the case of incentive
stock  options  granted  to  certain  employees  owning  more  than  10%  of the
outstanding  voting  stock) of the fair market  value of the common stock on the
date the stock option is granted. Under the 2003 Qualified Securities Plan, fair
market value of the common stock for a particular  date is generally the average
of the closing bid and asked prices per share for the stock as quoted on the OTC
Bulletin Board on such date.

         No stock option may be exercised after the expiration of ten years from
the date of grant (or five years in the case of incentive  stock options granted
to certain  employees  owning more than 10% of the  outstanding  voting  stock).
Pursuant to the 2003 Qualified  Securities Plan, the aggregate fair market value
of the common stock,  for which one or more incentive  stock options  granted to
any  participant  may for the first time become  exercisable as incentive  stock
options under the federal tax laws during any one calendar year shall not exceed
$100,000.

         A stock option may be  exercised  in whole or in part  according to the
terms of the applicable  stock option agreement by delivery of written notice of
exercise to the Company  specifying  the number of shares to be  purchased.  The
exercise  price for each stock option may be paid by the  Participant in cash or
by such other means as the Board of Directors may authorize.  Fractional  shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant  reload  stock  options in tandem with stock  options  that provide for an
automatic  grant of a stock option in the event a participant  pays the exercise
price of a stock option by delivery of common stock.

         The Board of Directors  may, in its  discretion,  at any time after the
grant of a stock  option,  accelerate  vesting of such option,  as a whole or in
part, by increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.


                                       12
<PAGE>

         Subject to the foregoing and the other provisions of the 2003 Qualified
Securities  Plan,  stock  options  may be  exercised  at such  times and in such
amounts and be subject to such  restrictions and other terms and conditions,  if
any, as determined by the Board of Directors.

RESTRICTED STOCK

         Restricted  stock may be awarded by the Board of  Directors  subject to
such terms,  conditions and restrictions as it deems  appropriate.  Restrictions
may include  limitations  on voting  rights and  transferability  of the shares,
restrictions based on the duration of employment or engagement with the Company,
and  Company  or  individual  performance.  Restricted  stock may not be sold or
encumbered until all restrictions expire or are terminated.  In this regard, the
Secretary of the Company or such other  escrow  holder as the Board of Directors
may appoint  shall  retain  physical  custody of each  certificate  representing
restricted  stock until all  restrictions  imposed  under the  applicable  Award
Agreement shall expire or be removed.

         The Board of Directors may require the  Participant  to pay the Company
an amount at least  equal to the par value of the  common  stock  awarded to the
Participant.  Subject  to  any  limitations  imposed  by  the  applicable  Award
Agreement,  from  the  date a  Participant  becomes  the  holder  of  record  of
restricted  stock,  the  Participant  has all the rights of a  stockholder  with
respect to such  shares,  including  the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.

         The 2003  Qualified  Securities  Plan  provides  that to the extent the
Board of  Directors  elects  to grant an Award of  restricted  stock,  the Award
Agreement  applicable  thereto shall,  except in certain  specified  situations,
provide the  Company  with the right to  repurchase  the  restricted  stock then
subject  to  restrictions  immediately  upon  a  termination  of  employment  or
engagement  for any reason  whatsoever  at a cash  price per share  equal to the
price paid by the Participant for the restricted stock.

UNRESTRICTED STOCK

         The  Board  of  Directors  may,  in its  discretion,  grant an Award of
unrestricted  stock  to  any  eligible  Participant,   pursuant  to  which  such
Participant may receive shares of Common Stock free of any vesting  restrictions
under the 2003 Qualified  Securities  Plan. The Board of Directors may also sell
shares of  unrestricted  stock to  eligible  Participants  at a  purchase  price
determined  in its  discretion.  Unrestricted  stock may be  granted  or sold in
respect of past  services or other valid  consideration,  or in lieu of any cash
compensation due to such individual.


PERFORMANCE STOCK AWARDS

         The Board of Directors may make performance stock awards under the 2002
Qualified  Securities Plan based upon terms it deems  appropriate.  The Board of
Directors may make performance stock awards independent of or in connection with
the granting of any other Award under the 2003  Qualified  Securities  Plan. The
Board of Directors shall determine  whether and to whom performance stock awards
shall be made, the performance  criteria  applicable  under each such Award, the
periods during which  performance is to be measured,  and all other  limitations
and  conditions  applicable  to the awarded  shares.  The Board of Directors may


                                       13
<PAGE>

utilize any of the following  performance  criteria  when  granting  performance
stock awards:

          -    net income;
          -    pre-tax income;
          -    operating income;
          -    cash flow;
          -    earnings per share;
          -    return on equity;
          -    return on invested capital or assets;
          -    cost reductions or savings;
          -    funds from operations;
          -    appreciation in the fair market value of the common stock;
          -    earnings before anyone or more of the following: interest, taxes,
               depreciation or amortization; and
          -    such other criteria deemed appropriate by the Board of Directors.

         The  Participant  receiving  a  performance  stock award shall have the
rights of a stockholder  only as to shares actually  received by the Participant
and not with respect to shares  subject to the Award but not actually  received.
At any time  prior to the  Participant's  termination  of  employment  (or other
business  relationship)  by the  Company,  the Board of  Directors  may,  in its
discretion,  accelerate,  waive or, subject to the other  provisions of the 2003
Qualified  Securities  Plan,  amend any and all performance  criteria  specified
under any performance stock award.

FEDERAL INCOME TAX CONSEQUENCES

         The following is a brief summary of the  principal  federal  income tax
consequences of the grant and exercise of Awards under present law. This summary
is not intended to be exhaustive and does not describe  foreign,  state or local
tax consequences. Recipients of Awards are advised to consult their personal tax
advisors with regard to all tax consequences arising with respect to the Awards.

TAX WITHHOLDING

         If a distribution is made under this 2003 Qualified  Securities Plan in
cash,  the  Company  will  withhold  taxes as  required  by law.  If an Award is
satisfied  in the form of  shares of the  common  stock,  then no shares  may be
issued unless and until arrangements  satisfactory to the Company have been made
to satisfy  any tax  withholding  obligations  applicable  with  respect to such
Award.

DEDUCTIBILITY OF AWARDS

         Company   deductions  for  Awards  granted  under  the  2003  Qualified
Securities  Plan are limited by Section  162(m) of the Internal  Revenue Code of
1986  (the  "Code")  which   generally   limits  the  Company's   deduction  for
non-performance  based  compensation  to $1.0 million per year for the Company's
CEO and its other four (4) most highly compensated officers. The Company has not
paid any  compensation  that was not deductible by reason of the  prohibition of
Section 162(m) to any executive officers.


                                       14
<PAGE>

INCENTIVE STOCK OPTIONS

         Pursuant  to the  2003  Qualified  Securities  Plan,  employees  may be
granted stock options that are intended to qualify as "incentive  stock options"
under the  provisions of Section 422 of the Code. An optionee will not recognize
any taxable  income for federal income tax purposes upon receipt of an incentive
stock  option or,  generally,  at the time of  exercise  of an  incentive  stock
option.  The exercise of an incentive  stock option  generally will result in an
increase in an optionee's taxable income for alternative minimum tax purposes.

         If an optionee exercises an incentive stock option and does not dispose
of the shares received in a subsequent "disqualifying disposition" (generally, a
sale,  gift or other  transfer  within two years  after the date of grant of the
incentive  stock option or within one year after the shares are  transferred  to
the optionee),  upon  disposition of the shares any amount realized in excess of
the  optionee's  tax  basis  in the  shares  disposed  of will be  treated  as a
long-term  capital  gain,  and any loss will be treated as a  long-term  capital
loss. In the event of a disqualifying  disposition,  the difference  between the
fair  market  value  of the  shares  received  on the date of  exercise  and the
exercise  price  (limited,  in the case of a taxable  sale or  exchange,  to the
excess of the amount realized upon  disposition over the optionee's tax basis in
the shares) will be treated as compensation received by the optionee in the year
of  disposition.  Any additional  gain will be taxable as a capital gain and any
loss as a capital loss, which will be long-term or short-term,  depending on the
length of time the optionee held the shares.

         If the exercise price of an incentive  stock option is paid in whole or
in part with shares of common stock,  no income gain or loss  generally  will be
recognized  by the  optionee  with respect to the shares of common stock paid as
the exercise price.  However,  if such shares of common stock were received upon
the exercise of an incentive stock option, the use of those shares as payment of
the exercise price will be considered a disposition  for purposes of determining
whether there has been a disqualifying disposition of those shares.

         Neither the Company nor any of its  subsidiaries  will be entitled to a
deduction  with respect to shares  received by an optionee  upon  exercise of an
incentive stock option and not disposed of in a disqualifying disposition. If an
amount  is  treated  as  compensation  received  by  an  optionee  because  of a
disqualifying disposition, the Company or one of its subsidiaries generally will
be entitled to a  corresponding  deduction  in the same amount for  compensation
paid.

NON-QUALIFIED STOCK OPTIONS

         An optionee will not recognize  any taxable  income for federal  income
tax purposes upon receipt of a non-qualified  stock option. Upon the exercise of
a  non-qualified  stock  option the amount by which the fair market value of the
shares  received,  determined  as of the date of exercise,  exceeds the exercise
price, the stock option will be treated as compensation received by the optionee
in the year of exercise.  If the exercise price of a non-qualified  stock option
is paid in whole or in part with shares of common stock, (i) no income,  gain or
loss will be  recognized by the optionee on the receipt of shares equal in value
on the date of  exercise  to the shares  delivered  in  payment of the  exercise
price, and (ii) no income,  gain or loss will be recognized by the optionee with
respect to the shares of common stock paid as the exercise  price of the option.
The fair market value of the  remainder of the shares  received upon exercise of
the non-qualified stock option,  determined as of the date of exercise, less the
amount of cash,  if any,  paid upon  exercise,  will be treated as  compensation
income received by the optionee on the date of exercise of the stock option. The
Company,  or one of its subsidiaries,  generally will be entitled to a deduction
for compensation paid in the same amount treated as compensation received by the
optionee.


                                       15
<PAGE>

RELOAD OPTION RIGHTS

         An optionee  should not recognize any taxable income for federal income
tax purposes upon receipt of reload option rights, and a reload option should be
treated as a non-qualified stock option.

RESTRICTED STOCK

         A recipient of restricted  stock will not recognize any taxable  income
for federal  income tax  purposes in the year of the Award,  provided the shares
are subject to restrictions (that is, they are non-transferable and subject to a
substantial risk of forfeiture).  However, the recipient may elect under Section
83(b) of the Code to recognize  compensation  income in the year of the Award in
an amount  equal to the fair market value of the shares on the date of the Award
(less the amount paid by the  recipient  for such  shares),  determined  without
regard to the  restrictions.  If the  recipient  does not make a  Section  83(b)
election, the fair market value of the shares on the date the restrictions lapse
(less the  amount  paid by the  recipient  for such  shares)  will be treated as
compensation  income  to the  recipient  and  will be  taxable  in the  year the
restrictions  lapse.  The Company or one of its  subsidiaries  generally will be
entitled  to a deduction  for  compensation  paid in the same amount  treated as
compensation income to the recipient.

UNRESTRICTED STOCK

         Any  shares  of  common  stock   received   pursuant  to  an  Award  of
unrestricted  stock will be  treated  as  compensation  income  received  by the
recipient,  generally,  in the year in which the recipient receives such shares.
In each case, the amount of compensation income will equal the fair market value
of the  shares of common  stock on the date  compensation  income is  recognized
(less the amount, if any, paid by the recipient for such shares). The Company or
one  of  its  subsidiaries,  generally,  will  be  entitled  to a  corresponding
deduction in the same amount for compensation paid.

PERFORMANCE STOCK AWARDS

         A recipient of a performance stock award will not recognize any taxable
income for federal income tax purposes upon receipt of the Award.  Any shares of
common  stock  received  pursuant  to the Award will be treated as  compensation
income received by the recipient,  generally, in the year in which the recipient
receives such shares of common  stock.  The amount of  compensation  income will
equal  the  fair  market  value  of the  shares  of  common  stock  on the  date
compensation  income is  recognized.  The  Company  or one of its  subsidiaries,
generally,  will be entitled to a deduction  for  compensation  paid in the same
amount treated as compensation income to the recipient.


                                       16
<PAGE>

OTHER TAX MATTERS

         The  exercise  by  a  recipient  of  a  stock  option,   the  lapse  of
restrictions  on restricted  stock,  or the deemed earnout of performance  stock
awards   following  the   occurrence   of  a  change  in  control,   in  certain
circumstances, may result in:

          -    a 20% federal  excise tax (in addition to federal  income tax) to
               the  recipient  on  certain  payments  of  common  stock  or cash
               resulting  from such  exercise or deemed  earnout of  performance
               stock  awards or, in the case of  restricted  stock,  on all or a
               portion  of the fair  market  value of the shares on the date the
               restrictions lapse; and
          -    the loss of a  compensation  deduction  which would  otherwise be
               allowable to the Company or one of its  subsidiaries as explained
               above.

GRANTS UNDER THE 2003 QUALIFIED SECURITIES PLAN

         As of the date hereof,  no employee has been granted  Options or Shares
under the Plan.

            THE TMI HOLDINGS, INC. 2003 NON-QUALIFIED SECURITIES PLAN

GENERAL

         On May 2,  2003,  the  Board  of  Directors  of the  Company  approved,
declared it advisable  and in the  Company's  best  interests  and directed that
there be  submitted to the holders of a majority of the  Company's  voting stock
for  action by  written  consent,  the TMI  Holdings,  Inc.  2003  Non-Qualified
Securities Plan (the "2003 Non-Qualified  Securities Plan"). On May 2, 2003, the
Board of  Directors  approval  of the  2003  Non-Qualified  Securities  Plan was
ratified by written  consent of a majority of voting  Capital Stock  interest of
the Company's Stockholders. The 2003 Non-Qualified Securities Plan is already in
effect based upon the above Board of Directors' approval.

PURPOSE

         The purpose of the 2003 Non-Qualified Securities Plan is to promote the
interests of the Company  (including its  subsidiaries)  and its stockholders by
using  investment  interests in the Company to attract,  retain and motivate its
management and other persons,  including officers,  directors, key employees and
certain consultants,  to encourage and reward such persons' contributions to the
performance  of the Company and to align their  interests  with the interests of
the  Company's   stockholders.   In  furtherance  of  this  purpose,   the  2003
Non-Qualified  Securities Plan authorizes the granting of the following types of
stock-based awards (each, an "Award"):

          -    stock   options   (including    incentive   stock   options   and
               non-qualified stock options);
          -    restricted stock awards;
          -    unrestricted stock awards; and
          -    performance stock awards.


                                       17
<PAGE>

Each of these types of Awards is described below under "Awards."

ELIGIBILITY

         Key employees (including employees who are also directors or officers),
directors and certain  consultants of the Company or any subsidiary are eligible
to be  granted  Awards  under  the  2003  Non-Qualified  Securities  Plan at the
discretion of the Board of Directors.  In  determining  the  eligibility  of any
person, as well as in determining the number of shares to be covered by an Award
and the type or types of Awards to be made, the Board of Directors may consider:

          -    the position,  relationship,  responsibilities  and importance of
               the person to the Company; and
          -    such other factors as the Board of Directors deems relevant.

Selected  consultants may participate in the 2003 Non-Qualified  Securities Plan
if:

          -    the  consultant  renders bona fide services to the Company or one
               of its subsidiaries;
          -    the services  rendered by the  consultant  are not in  connection
               with  the  offer  or  sale  of  securities  in a  capital-raising
               transaction and do not directly or indirectly promote or maintain
               a market for the Company's securities; and
          -    the consultant is a natural  person who has  contracted  directly
               with the  Company or a  subsidiary  of the Company to render such
               services.

ADMINISTRATION

         The 2003 Non-Qualified Securities Plan currently is administered by the
Board  of  Directors.  In  the  future,  the  Board  of  Directors  may  form  a
Compensation Committee to administer the 2003 Non-Qualified Securities Plan. Any
Compensation Committee must be comprised of at least two non-employee directors.
If a  Compensation  Committee  is formed to  administer  the 2003  Non-Qualified
Securities  Plan,  the Board of  Directors  will  delegate  to the  Compensation
Committee full authority, in its discretion, to:

          -    select  the  persons  to  whom  Awards  will be  granted  (each a
               "Participant");
          -    grant Awards under the 2003 Non-Qualified Securities Plan;
          -    determine the number of shares to be covered by each Award;
          -    determine the nature, amount,  pricing, timing and other terms of
               the Award;
          -    interpret,  construe and  implement  the  provisions  of the 2003
               Non-Qualified  Securities  Plan (including the authority to adopt
               rules and regulations for carrying out the purposes of the plan);
               and
          -    terminate,  modify  or amend  the 2003  Non-Qualified  Securities
               Plan.

         The 2003 Non-Qualified Securities Plan is not subject to the provisions
of the Employee Retirement Income Security Act of 1974.


                                       18
<PAGE>

SHARES SUBJECT TO THE PLAN

         A total of 2.5 million shares of Common Stock (subject to adjustment as
described  below)  are  reserved  for  issuance  under  the  2003  Non-Qualified
Securities   Plan  which  may  be  increased  from  time  to  time  upon  proper
authorization.  Shares  of common  stock  issued  under  the 2003  Non-Qualified
Securities Plan may be authorized but unissued shares,  or shares  reacquired by
the Company,  including  shares  purchased on the open market.  The unexercised,
unearned or yet-to-be  acquired portions of any Award that expire,  terminate or
are  canceled,  and shares of common stock  issued  pursuant to Awards under the
2003  Non-Qualified  Securities Plan that are reacquired by the Company pursuant
to the terms under which such shares were issued,  will again  become  available
for the grant of further Awards.

ADJUSTMENT

         In general,  the  aggregate  number of shares as to which Awards may be
granted to Participants under the 2003 Non-Qualified Securities Plan, the number
and kind of shares thereof covered by each outstanding  Award,  and/or the price
per share thereof in each such Award will, upon a determination  of the Board of
Directors,  all be proportionately  adjusted for any increase or decrease in the
number of issued shares of common stock resulting from an increase,  decrease or
exchange in the outstanding  shares of common stock or additional  shares or new
or different  shares are  distributed in respect of such shares of common stock,
through merger,  consolidation,  sale or exchange of all or substantially all of
the assets of the Company, reorganization,  recapitalization,  reclassification,
stock dividend, stock split, reverse stock split, spin-off or other distribution
with respect to such shares.

         Fractional  interests will not be issued upon any  adjustments  made by
the Board or Directors;  however,  the committee may, in its discretion,  make a
cash  payment in lieu of any  fractional  shares of common  stock  issuable as a
result of such adjustments.

AWARDS

STOCK OPTIONS

         Under the 2003  Non-Qualified  Securities  Plan, the Board of Directors
may only grant non-qualified  stock options.  Non-qualified stock options may be
granted  for such  number of shares  of common  stock as the Board of  Directors
determines,  so long as such  number  of  shares  does  not  exceed  the  amount
permitted under the plan.

         The exercise  price for each stock option is determined by the Board of
Directors.  Stock options under the 2003 Non-Qualified Securities Plan must have
an exercise  price of at least 85% of the fair market  value of the common stock
on the date the stock option is granted. Under the 2003 Non-Qualified Securities
Plan,  fair market value of the common stock for a particular  date is generally
the  average  of the  closing  bid and asked  prices  per share for the stock as
quoted on the OTC Bulletin Board on such date.

         No stock option may be exercised after the expiration of ten years from
the date of grant.


                                       19
<PAGE>

         A stock option may be  exercised  in whole or in part  according to the
terms of the applicable  stock option agreement by delivery of written notice of
exercise to the Company  specifying  the number of shares to be  purchased.  The
exercise  price for each stock option may be paid by the  Participant in cash or
by such other means as the Board of Directors may authorize.  Fractional  shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant  reload  stock  options in tandem with stock  options  that provide for an
automatic  grant of a stock option in the event a participant  pays the exercise
price of a stock option by delivery of common stock.

         The Board of Directors  may, in its  discretion,  at any time after the
grant of a stock  option,  accelerate  vesting of such option,  as a whole or in
part, by increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.

         Subject  to  the  foregoing  and  the  other  provisions  of  the  2003
Non-Qualified  Securities Plan, stock options may be exercised at such times and
in such  amounts  and be  subject  to such  restrictions  and  other  terms  and
conditions, if any, as determined by the Board of Directors.

RESTRICTED STOCK

         Restricted  stock may be awarded by the Board of  Directors  subject to
such terms,  conditions and restrictions as it deems  appropriate.  Restrictions
may include  limitations  on voting  rights and  transferability  of the shares,
restrictions based on the duration of employment or engagement with the Company,
and  Company  or  individual  performance.  Restricted  stock may not be sold or
encumbered until all restrictions expire or are terminated.  In this regard, the
Secretary of the Company or such other  escrow  holder as the Board of Directors
may appoint  shall  retain  physical  custody of each  certificate  representing
restricted  stock until all  restrictions  imposed  under the  applicable  Award
Agreement shall expire or be removed.

         The Board of Directors may require the  Participant  to pay the Company
an amount at least  equal to the par value of the  common  stock  awarded to the
Participant.  Subject  to  any  limitations  imposed  by  the  applicable  Award
Agreement,  from  the  date a  Participant  becomes  the  holder  of  record  of
restricted  stock,  the  Participant  has all the rights of a  stockholder  with
respect to such  shares,  including  the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.

         The 2003 Non-Qualified  Securities Plan provides that to the extent the
Board of  Directors  elects  to grant an Award of  restricted  stock,  the Award
Agreement  applicable  thereto shall,  except in certain  specified  situations,
provide the  Company  with the right to  repurchase  the  restricted  stock then
subject  to  restrictions  immediately  upon  a  termination  of  employment  or
engagement  for any reason  whatsoever  at a cash  price per share  equal to the
price paid by the Participant for the restricted stock.


                                       20
<PAGE>


UNRESTRICTED STOCK

         The  Board  of  Directors  may,  in its  discretion,  grant an Award of
unrestricted  stock  to  any  eligible  Participant,   pursuant  to  which  such
Participant may receive shares of Common Stock free of any vesting  restrictions
under the 2003  Non-Qualified  Securities  Plan. The Board of Directors may also
sell shares of unrestricted  stock to eligible  Participants at a purchase price
determined  in its  discretion.  Unrestricted  stock may be  granted  or sold in
respect of past  services or other valid  consideration,  or in lieu of any cash
compensation due to such individual.

PERFORMANCE STOCK AWARDS

         The Board of Directors may make performance stock awards under the 2002
Securities  Plan based upon terms it deems  appropriate.  The Board of Directors
may make  performance  stock awards  independent  of or in  connection  with the
granting of any other Award under the 2003  Non-Qualified  Securities  Plan. The
Board of Directors shall determine  whether and to whom performance stock awards
shall be made, the performance  criteria  applicable  under each such Award, the
periods during which  performance is to be measured,  and all other  limitations
and  conditions  applicable  to the awarded  shares.  The Board of Directors may
utilize any of the following  performance  criteria  when  granting  performance
stock awards:

          -    net income;
          -    pre-tax income;
          -    operating income;
          -    cash flow;
          -    earnings per share;
          -    return on equity;
          -    return on invested capital or assets;
          -    cost reductions or savings;
          -    funds from operations;
          -    appreciation in the fair market value of the common stock;
          -    earnings before anyone or more of the following: interest, taxes,
               depreciation or amortization; and
          -    such other criteria deemed appropriate by the Board of Directors.

         The  Participant  receiving  a  performance  stock award shall have the
rights of a stockholder  only as to shares actually  received by the Participant
and not with respect to shares  subject to the Award but not actually  received.
At any time  prior to the  Participant's  termination  of  employment  (or other
business  relationship)  by the  Company,  the Board of  Directors  may,  in its
discretion,  accelerate,  waive or, subject to the other  provisions of the 2003
Non-Qualified  Securities Plan, amend any and all performance criteria specified
under any performance stock award.

FEDERAL INCOME TAX CONSEQUENCES

         The following is a brief summary of the  principal  federal  income tax
consequences of the grant and exercise of Awards under present law. This summary
is not intended to be exhaustive and does not describe  foreign,  state or local
tax consequences. Recipients of Awards are advised to consult their personal tax
advisors with regard to all tax consequences arising with respect to the Awards.


                                       21
<PAGE>

TAX WITHHOLDING

         If a distribution is made under this 2003 Non-Qualified Securities Plan
in cash,  the  Company  will  withhold  taxes as required by law. If an Award is
satisfied  in the form of  shares of the  common  stock,  then no shares  may be
issued unless and until arrangements  satisfactory to the Company have been made
to satisfy  any tax  withholding  obligations  applicable  with  respect to such
Award.
DEDUCTIBILITY OF AWARDS

         Company  deductions  for Awards  granted  under the 2003  Non-Qualified
Securities  Plan are limited by Section  162(m) of the Internal  Revenue Code of
1986  (the  "Code")  which   generally   limits  the  Company's   deduction  for
non-performance  based  compensation  to $1.0 million per year for the Company's
CEO and its other four (4) most highly compensated officers. The Company has not
paid any  compensation  that was not deductible by reason of the  prohibition of
Section 162(m) to any executive officers.

NON-QUALIFIED STOCK OPTIONS

         An optionee will not recognize  any taxable  income for federal  income
tax purposes upon receipt of a non-qualified  stock option. Upon the exercise of
a  non-qualified  stock  option the amount by which the fair market value of the
shares  received,  determined  as of the date of exercise,  exceeds the exercise
price, the stock option will be treated as compensation received by the optionee
in the year of exercise.  If the exercise price of a non-qualified  stock option
is paid in whole or in part with shares of common stock, (i) no income,  gain or
loss will be  recognized by the optionee on the receipt of shares equal in value
on the date of  exercise  to the shares  delivered  in  payment of the  exercise
price, and (ii) no income,  gain or loss will be recognized by the optionee with
respect to the shares of common stock paid as the exercise  price of the option.
The fair market value of the  remainder of the shares  received upon exercise of
the non-qualified stock option,  determined as of the date of exercise, less the
amount of cash,  if any,  paid upon  exercise,  will be treated as  compensation
income received by the optionee on the date of exercise of the stock option. The
Company,  or one of its subsidiaries,  generally will be entitled to a deduction
for compensation paid in the same amount treated as compensation received by the
optionee.

RELOAD OPTION RIGHTS

         An optionee  should not recognize any taxable income for federal income
tax purposes upon receipt of reload option rights, and a reload option should be
treated as a non-qualified stock option.

RESTRICTED STOCK

         A recipient of restricted  stock will not recognize any taxable  income
for federal  income tax  purposes in the year of the Award,  provided the shares
are subject to restrictions (that is, they are non-transferable and subject to a
substantial risk of forfeiture).  However, the recipient may elect under Section
83(b) of the Code to recognize  compensation  income in the year of the Award in
an amount  equal to the fair market value of the shares on the date of the Award
(less the amount paid by the  recipient  for such  shares),  determined  without
regard to the  restrictions.  If the  recipient  does not make a  Section  83(b)
election, the fair market value of the shares on the date the restrictions lapse
(less the  amount  paid by the  recipient  for such  shares)  will be treated as
compensation  income  to the  recipient  and  will be  taxable  in the  year the
restrictions  lapse.  The Company or one of its  subsidiaries  generally will be
entitled  to a deduction  for  compensation  paid in the same amount  treated as
compensation income to the recipient.


                                       22
<PAGE>

UNRESTRICTED STOCK

         Any  shares  of  common  stock   received   pursuant  to  an  Award  of
unrestricted  stock will be  treated  as  compensation  income  received  by the
recipient,  generally,  in the year in which the recipient receives such shares.
In each case, the amount of compensation income will equal the fair market value
of the  shares of common  stock on the date  compensation  income is  recognized
(less the amount, if any, paid by the recipient for such shares). The Company or
one  of  its  subsidiaries,  generally,  will  be  entitled  to a  corresponding
deduction in the same amount for compensation paid.

PERFORMANCE STOCK AWARDS

         A recipient of a performance stock award will not recognize any taxable
income for federal income tax purposes upon receipt of the Award.  Any shares of
common  stock  received  pursuant  to the Award will be treated as  compensation
income received by the recipient,  generally, in the year in which the recipient
receives such shares of common  stock.  The amount of  compensation  income will
equal  the  fair  market  value  of the  shares  of  common  stock  on the  date
compensation  income is  recognized.  The  Company  or one of its  subsidiaries,
generally,  will be entitled to a deduction  for  compensation  paid in the same
amount treated as compensation income to the recipient.

OTHER TAX MATTERS

         The  exercise  by  a  recipient  of  a  stock  option,   the  lapse  of
restrictions  on restricted  stock,  or the deemed earnout of performance  stock
awards   following  the   occurrence   of  a  change  in  control,   in  certain
circumstances, may result in:

          -    a 20% federal  excise tax (in addition to federal  income tax) to
               the  recipient  on  certain  payments  of  common  stock  or cash
               resulting  from such  exercise or deemed  earnout of  performance
               stock  awards or, in the case of  restricted  stock,  on all or a
               portion  of the fair  market  value of the shares on the date the
               restrictions lapse; and
          -    the loss of a  compensation  deduction  which would  otherwise be
               allowable to the Company or one of its  subsidiaries as explained
               above.


                                       23
<PAGE>

RESTRICTIONS UNDER SECURITIES LAWS

         The  sale  of all  shares  issued  under  the  Plans  must  be  made in
compliance with federal and state securities  laws. Our officers,  directors and
10% or greater shareholders, as well as certain other persons or parties who may
be deemed to be "affiliates" of ours under federal  securities  laws,  should be
aware that  resales by  affiliates  can only be made  pursuant  to an  effective
registration  statement,  Rule 144 or other applicable exemption.  Our officers,
directors and 10% and greater shareholders may also become subject to the "short
swing" profit rule of Section 16(b) of the Securities Exchange Act of 1934.

                              PLAN OF DISTRIBUTION

         The information  under this heading  includes resales of shares covered
by this  prospectus by persons who are our  "affiliates" as that term in defined
under federal securities laws.

         The shares  covered by this  prospectus  may be resold and  distributed
from time to time by the selling security  holders in one or more  transactions,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales to one or more  broker-dealers  for  resale  of these  shares  as
principals,  at market prices existing at the time of sale, at prices related to
existing market prices,  through Rule 144 transactions or at negotiated  prices.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the selling security holders in connection with sales of securities.

         The  selling  security  holders  may sell  shares in one or more of the
following methods,  which may include crosses or block  transactions:

          -    through  the  "pink  sheets",  on the  over-the-counter  Bulletin
               Board, or on such exchanges or over-the-counter  markets on which
               our shares may be listed from time-to-time, in transactions which
               may include  special  offerings,  exchange  distributions  and/or
               secondary  distributions,  pursuant to and in accordance with the
               rules of such exchanges;

          -    in   transactions   other  than  on  such  exchanges  or  in  the
               over-the-counter  market, or a combination of such  transactions,
               including  sales through  brokers,  acting as principal or agent,
               sales in privately negotiated  transactions,  or dispositions for
               value, subject to rules relating to sales by affiliates; or

          -    through the writing of options on our shares, whether or not such
               options  are  listed  on  an  exchange,   or  other  transactions
               requiring  delivery of our shares,  or the delivery of our shares
               to close out a short position.

         Any such  transactions  may be effected at market prices  prevailing at
the time of sale,  at  prices  related  to such  prevailing  market  prices,  at
negotiated prices or at fixed prices.


                                       24
<PAGE>

         In making  sales,  brokers  or  dealers  used by the  selling  security
holders  may arrange for other  brokers or dealers to  participate.  The selling
security  holders  who  are  affiliates  of TMI and  others  through  whom  such
securities are sold may be  "underwriters"  within the meaning of the Securities
Act for the securities offered,  and any profits realized or commission received
may be  considered  underwriting  compensation.  Information  as to  whether  an
underwriter(s) who may be selected by the selling security holders, or any other
broker-dealer, is acting as principal or agent for the selling security holders,
the  compensation  to be  received  by  underwriters  who may be selected by the
selling security holders, or any broker-dealer, acting as principal or agent for
the  selling  security  holders  and the  compensation  to be  received by other
broker-dealers,  in the event the  compensation  of other  broker-dealers  is in
excess of usual and customary commissions,  will, to the extent required, be set
forth in a supplement to this prospectus.  Any dealer or broker participating in
any  distribution  of the  shares  may be  required  to  deliver  a copy of this
prospectus, including the supplement, if any, to any person who purchases any of
the shares from or through a dealer or broker.

         We have advised the selling security holders that, at the time a resale
of the shares is made by or on behalf of a selling  security  holder,  a copy of
this prospectus is to be delivered.

         We have also advised the selling  security holders that during the time
as they may be engaged in a distribution  of the shares included herein they are
required  to  comply  with  Regulation  M of  the  Exchange  Act.  With  certain
exceptions,  Regulation M precludes any selling security holders, any affiliated
purchasers  and any  broker-dealer  or  other  person  who  participates  in the
distribution from bidding for or purchasing,  or attempting to induce any person
to bid for or purchase  any  security  which is the subject of the  distribution
until the entire distribution is complete.  Regulation M also prohibits any bids
or purchase  made in order to  stabilize  the price of a security in  connection
with the distribution of that security.

         Sales of securities by the selling  security holders and us or even the
potential  of these  sales may have an adverse  effect on the  market  price for
shares of our common stock.


                            DESCRIPTION OF SECURITIES

GENERAL

         The following  description  of our capital stock and  provisions of our
Articles of  Incorporation is a summary thereof and is qualified by reference to
our Articles of Incorporation, copies of which may be obtained upon request. Our
authorized capital consists of 30,000,000 shares of common stock, par value $.01
per  share,  of which  7,589,675  shares  are  issued  and  outstanding.  We are
authorized to issue 2,000,000 shares of preferred stock, of which 750,000 shares
are issued or outstanding.

COMMON STOCK

         Holders of shares of common stock are  entitled to share,  on a ratable
basis, such dividends as may be declared by the board of directors out of funds,
legally  available  therefor.  Upon our liquidation,  dissolution or winding up,
after payment to  creditors,  our assets will be divided pro rata on a per share
basis among the holders of our common stock.


                                       25
<PAGE>

         Each share of common stock  entitles  the holders  thereof to one vote.
Holders  of common  stock do not have  cumulative  voting  rights.  Our  By-Laws
require  that only a  majority  of our  issued and  outstanding  shares  need be
represented to constitute a quorum and to transact  business at a  stockholders'
meeting.  Our common stock has no preemptive,  subscription or conversion rights
and is not redeemable by us.

PREFERRED STOCK

         Our  articles of  incorporation  authorizes  our board of  directors to
create  and  issue  series  of  preferred  stock  from  time to time,  with such
designations,    preferences,    conversion   rights,   cumulative,    relative,
participating,    optional   or   other   rights,   including   voting   rights,
qualifications,  limitations or restrictions  thereof as permitted under Florida
law.

         The Company has established its Series A Preferred Stock  consisting in
total of 250,000 shares.  This series carries no dividend or conversion  rights,
but  includes  a stated  right to vote 10  shares  for  each  share of  Series A
Preferred  Stock.  The  Series  A  Preferred  Stock  will  have  priority  as to
liquidation  with respect to the Common Stock and any series of preferred  stock
ranking junior to the Series A Preferred Stock.

         The Company  authorized the  establishment  of its Series B Convertible
Preferred Stock on January 31, 2003, and subsequently  filed an amendment to the
designations.  The Series B Preferred  Stock carries no specified  dividend rate
and may be  declared  pro rata  with the  common  stock on a pari  passu  basis.
However,  no  dividend  may  be  declared  while  the  Company  has  outstanding
indebtedness.  Any  dividends  will  accrue  on  a  non-cumulative  basis.  Upon
liquidation,  the  Series B  Preferred  Stock  will  have  the same  liquidation
preference  equal to that of the common stock of TMI. If at any time at least 5%
of Kina'ole's outstanding common stock is distributed to TMI's shareholders on a
pro rata basis,  the Series B Preferred  Stock will  automatically  convert into
that  number  of shares of  common  stock of  Kina'ole  equal to 90% of the then
outstanding common stock of Kina'ole. In the original designations,  the Company
provided  for each  share of  Series B  Preferred  Stock to have 30 votes on all
matters submitted to shareholders. Thereafter, the Company filed an amendment to
eliminate  the voting  rights of the Series B  Preferred  Stock.  No  redemption
rights are provided with regard to the Series B Preferred Stock.

TRANSFER AGENT AND REGISTRAR

         The transfer agent and registrar for our common stock is North American
Transfer  Company is North  American  Transfer  Company,  147 West Merrick Road,
Freeport, New York 11520.

                                     EXPERTS

         The financial statements of TMI Holdings, Inc. as of December 29, 2002,
and for the years ended  December 29, 2002 and  December 30, 2001,  appearing in
our Annual Report on Form 10-KSB for the year ended  December 29, 2002 have been
audited by Berkowitz,  Dick Pollack & Brant, LLP, Certified Public  Accountants,
as set forth in their  report  thereon  and are  incorporated  by  reference  in
reliance upon the authority of such firm as experts in auditing and accounting.


                                       26
<PAGE>

                                 INDEMNIFICATION

         The Florida Business Corporation Act allows us to indemnify each of our
officers and directors who are made a party to a proceeding if

               (a)  the officer or director conducted himself or herself in good
                    faith;
               (b)  his or her  conduct  was in our  best  interests,  or if the
                    conduct  was not in an official  capacity,  that the conduct
                    was not opposed to our best interests; and
               (c)  in the  case  of a  criminal  proceeding,  he or she  had no
                    reasonable  cause to  believe  that his or her  conduct  was
                    unlawful.

         Article IX of the Company's Restated Articles of Incorporation  provide
as follows:

                                   "Article IX

                  To the fullest extent permitted by law, no director or officer
         of the Corporation shall be personally liable to the Corporation or its
         shareholders for damages for breach of any duty owed to the Corporation
         or its shareholders. In addition, the Corporation shall have the power,
         in its Bylaws or in any resolution of its stockholders or directors, to
         undertake to indemnify the officers and  directors of this  Corporation
         against any contingency or peril as may be determined to be in the best
         interests  of  this  Corporation,  and  in  conjunction  therewith,  to
         procure, at this Corporation's expense, policies of insurance."

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors,  officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange  Commission such  indemnification  is
against  public  policy  as  expressed  in the  Securities  Act of 1933  and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or controlling  person in the successful defense
of any action,  suit or  proceeding)  is asserted by such  director,  officer or
controlling person in connection with the securities being registered,  we will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities  Act of 1933 and will be governed by the final  adjudication  of such
issue.


<PAGE>



                                     PART II
                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

         The  documents  listed  below  are  incorporated  by  reference  in the
Registration  Statement.  All  documents  subsequently  filed by the  Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange  Act"),  prior to the filing of a post-effective
amendment  which  indicates that all securities  offered have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated by reference in the  Registration  Statement and to be part thereof
from the date of filing of such documents.

          -    Quarterly Report on Form 10-QSB filed on June 17, 2003
          -    Annual Report on Form 10-KSB filed on May 23, 2003
          -    Form 8-K Current Report filed on June 9, 2003 and Amended on June
               11, 2003
          -    Definitive Information Statement filed on June 12, 2003

         All  reports  and  documents  filed by us pursuant to Section 13, 14 or
15(d) of the Exchange  Act,  prior to the filing of a  post-effective  amendment
which  indicates  that all  securities  offered  hereby  have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this prospectus.

         We hereby undertake to provide without charge to each person, including
any beneficial  owner, to whom a copy of the prospectus has been  delivered,  on
the written  request of any such person,  a copy of any or all of the  documents
referred to above which have been or may be  incorporated  by  reference in this
prospectus,  other than exhibits to such  documents.  Written  requests for such
copies  should be directed to Corporate  Secretary,  TMI Holdings,  Inc.,  11924
Forest Hill Boulevard, Suite 22-204, Wellington, Florida 33414.

ITEM 4. DESCRIPTION OF SECURITIES

         A  description  of the  Registrant's  securities  is set  forth  in the
Prospectus incorporated as a part of this Registration Statement.


ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not Applicable.




                                      II-1
<PAGE>



ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Florida Business Corporation Act allows us to indemnify each of our officers
and directors who are made a party to a proceeding if

          (d)  the  officer  or  director  conducted  himself or herself in good
               faith;
          (e)  his or her conduct was in our best  interests,  or if the conduct
               was not in an official capacity, that the conduct was not opposed
               to our best interests; and
          (f)  in the case of a criminal proceeding, he or she had no reasonable
               cause to believe that his or her conduct was unlawful.

         Article IX of the Company's Restated Articles of Incorporation  provide
as follows:

                                   "Article IX

                  To the fullest extent permitted by law, no director or officer
                  of  the  Corporation   shall  be  personally   liable  to  the
                  Corporation or its  shareholders for damages for breach of any
                  duty owed to the Corporation or its shareholders. In addition,
                  the Corporation  shall have the power, in its Bylaws or in any
                  resolution of its  stockholders or directors,  to undertake to
                  indemnify  the  officers  and  directors  of this  Corporation
                  against any contingency or peril as may be determined to be in
                  the best  interests of this  Corporation,  and in  conjunction
                  therewith, to procure, at this Corporation's expense, policies
                  of insurance."

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors,  officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange  Commission such  indemnification  is
against  public  policy  as  expressed  in the  Securities  Act of 1933  and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or controlling  person in the successful defense
of any action,  suit or  proceeding)  is asserted by such  director,  officer or
controlling person in connection with the securities being registered,  we will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities  Act of 1933 and will be governed by the final  adjudication  of such
issue.

ITEM 7.           EXEMPTION FROM REGISTRATION CLAIMED

         Persons eligible to receive grants under the Plan will have an existing
relationship with us and will have access to comprehensive  information about us
to enable them to make an  informed  investment  decision.  The  recipient  must
express an investment intent and, in the absence of registration  under the Act,
consent  to the  imprinting  of a legend  on the  securities  restricting  their
transferability except in compliance with applicable securities laws.


                                      II-2
<PAGE>

ITEM 8. EXHIBITS

5.1      Opinion of Schneider Weinberger, LLP*
10.1     TMI Holdings, Inc. 2003 Qualified Securities Plan*
10.2     TMI Holdings, Inc. 2003 Non-Qualified Securities Plan*
23.1     Consent of Independent Auditors*
23.2     Consent of Schneider Weinberger, LLP (included in the above opinion)

--------------------
*        Filed herewith.

ITEM 9. UNDERTAKINGS

     The undersigned registrant hereby undertakes:

     (1)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (a)  To include any  prospectus  required  by section  10(a)(3) of the
               Securities Act of 1933;

          (b)  To reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  registration  statement (or the most
               recent post-effective  amendment thereof) which,  individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   registration    statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in volume  and price  represent  no more than a 20%
               change in the maximum  aggregate  offering price set forth in the
               "Calculation  of   Registration   Fee"  table  in  the  effective
               registration statement;

          (c)  To include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  registration
               statement  or any  material  change  to such  information  in the
               registration statement;

         Provided,  however,  that paragraphs (1)(i) and (1)(ii) do not apply if
the  registration  statement  is on  Form  S-3 or Form  S-8 and the  information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic reports filed by the registrant  pursuant to section 13 or
section 15(d) of the Securities  Exchange Act of 1934 that are  incorporated  by
reference in the registration statement.

         (2)      That, for the purpose of determining  any liability  under the
                  Securities  Act of 1933,  each such  post-effective  amendment


                                      II-3
<PAGE>

                  shall be deemed to be a new registration statement relating to
                  the  securities  offered  therein,  and the  offering  of such
                  securities at that time shall be deemed to be the initial bona
                  fide offering thereof.

         (3)      To  remove  from  registration  by means  of a  post-effective
                  amendment any of the securities  being registered which remain
                  unsold at the termination of the offering.

         The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission  such  indemnification  is against  public policy as expressed in the
Securities Act of 1933 against such  liabilities  (other than the payment by the
registrant  in the  successful  defense of an  action,  suit or  proceeding)  is
asserted by such director,  officer or controlling person in connection with the
securities being  registered,  the registrant will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent, submit to a court
of appropriate  jurisdiction the question whether such  indemnification by it is
against  public  policy as expressed in the  Securities  Act of 1933 and will be
governed by the final adjudication of such issue.





                                      II-4
<PAGE>




                                   SIGNATURES


         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Wellington, State of Florida, on July 1, 2003.

                                   TMI HOLDINGS, INC.


                                   By: /s/ Scott Siegel
                                      ------------------------------------
                                       Scott Siegel, CEO and
                                       Principal Executive Officer


         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.

    Signature                        Title                           Date

                           Chairman of the Board,
                           CEO, President and
/s/ Scott Siegel           Principal Executive, Financial          July 1, 2003
----------------------
Scott Siegel               and Accounting Officer


/s/ Neil Dolgin            Director                                July 1, 2003
----------------------
[{"type": "S-8", "sequence": "1", "filename": "tmi_s-8.txt", "secsgml_size_bytes": 99097}]
{"company-data": {"conformed-name": "TMI HOLDINGS INC/FL", "cik": "0001016611", "assigned-sic": "5940", "irs-number": "650309540", "state-of-incorporation": "FL", "fiscal-year-end": "1227"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-106716", "film-number": "03768356"}, "business-address": {"street1": "4463 PAHE'E STREET", "street2": "SUITE 203-B", "city": "LIHUE", "state": "HI", "zip": "96766", "phone": "8083844622"}, "mail-address": {"street1": "4463 PAHE'E STREET", "street2": "SUITE 203-B", "city": "LIHUE", "state": "HI", "zip": "96766"}, "former-company": {"former-conformed-name": "THRIFT MANAGEMENT INC", "date-changed": "19960711"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 2003

                          Registration No. 333-________

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM S-8
                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933

                               TMI HOLDINGS, INC.
            (Exact name of registration as specified in its charter)

             Florida                                    65-0309540
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

                           11924 Forest Hill Boulevard
                                  Suite 22-204
                            Wellington, Florida 33414
                                 (954) 579-8599
          (Address and Telephone Number of Principal Executive Offices)

                               TMI HOLDINGS, INC.
                         2003 Qualified Securities Plan
                       2003 Non-Qualified Securities Plan
                            (Full Title of the Plan)

                                   Copies to:

             Scott Siegel                            James M. Schneider, Esq.
        Chief Executive Officer                      Schneider Weinberger LLP
          TMI Holdings, Inc.                        2499 Glades Road, Suite 108
 11924 Forest Hill Blvd., Suite 22-204                 Boca Raton, FL 33431
         Wellington, FL  33414                            (561) 362-9595
            (954) 579-8599
CALCULATION OF REGISTRATION FEE
Proposed              Proposed
                                                       maximum               maximum
                                                      offering              aggregate            Amount of
  Title of securities         Amount to be            price per             offering           registration
   to be registered            registered             share                 price                   fee
-------------------------------------------------------------------------------------------------------------
Common Stock, $.01
par value per share (1)       6,000,000                $0.35              $2,100,000               $169.89
(1)      This  calculation  is made  solely for the purpose of  determining  the
         registration  fee pursuant to the  provisions  of Rule 457(h) under the
         Securities Act, and is calculated upon the average of the bid and asked
         price of the securities on the Over-the-Counter-Bulletin  Board on June
         30, 2003.
PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

       This registration statement relates to two separate prospectuses.

         Items 1 and 2 of this Part I, and the documents  incorporated herein by
reference  pursuant to Item 3 of Part II of this Form S-8,  constitute the first
prospectus relating to issuances to our employees,  consultants and others of up
to 2,640,000  shares of common stock pursuant to our 2003  Qualified  Securities
Plan and 2003  Non-Qualified  Securities  Plan (the  "Plans").  Pursuant  to the
requirements  of Form S-8 and Rule 428, we will deliver or cause to be delivered
to Plan  participants  any required  information as specified by Rule 428(b)(1).
The second  prospectus,  referred to as the reoffer  prospectus,  relates to the
reoffer or resale of any shares  that are  deemed to be  control  securities  or
restricted securities under the Securities Act of 1933.

                                   PROSPECTUS

ITEM 1. PLAN INFORMATION

         We  established  the Plans  effective  May 2, 2003,  to provide us with
flexibility  and to conserve our cash resources in  compensating  certain of our
technical,  administrative  and  professional  employees  and  consultants.  The
issuance of shares under the Plans are  restricted  to persons and firms who are
closely-related   to  us  and  who  provide  services  in  connection  with  the
development  and  production  of our  products  and  services  or  otherwise  in
connection  with our business.  The Plans  authorize us currently to issue up to
2,640,000  shares of our common stock.  Shares must be issued only for bona fide
services and may not be issued under the Plans for services in  connection  with
the offer and sale of  securities  in a capital  raising  or  capital  promoting
transaction.  Shares  are  awarded  under the  Plans  pursuant  to  individually
negotiated  compensation contracts as determined and/or approved by the Board of
Directors  or  compensation   committee.   The  eligible   participants  include
directors,  officers, employees and non-employee consultants and advisors. There
is no limit as to the number of shares that may be awarded  under the Plans to a
single participant. We anticipate that a substantial portion of the shares to be
issued  under  the  Plans  will be  issued  as  compensation  to our  employees,
directors,  technical  consultants and advisors who provide development services
in the development and promoting of our various products and services.

         The plans do not require  restrictions on the transferability of shares
issued  thereunder.  However,  such shares may be  restricted  as a condition to
their issuance where the Board of Directors deems such restrictions appropriate.
The Plans are not subject to the Employee  Retirement  Income  Securities Act of
1974  ("ERISA").  Restricted  shares  awarded under the Plans are intended to be
fully taxable to the recipient as earned income.

         We will  provide  without  charge,  upon written or oral  request,  the
documents  incorporated  by reference in Item 3 of Part II of this  Registration
Statement.  These  documents are  incorporated by reference in the Section 10(a)
prospectus.  We will also provide without charge,  upon written or oral request,
all other  documents  required to be  delivered to  recipients  pursuant to Rule
428(b).  Any and all  such  requests  shall be  directed  to the  Company  at is
principal  office at 11924  Forest Hill  Boulevard,  Suite  22-204,  Wellington,
Florida 33414, attention: Chief Executive Officer.

         THESE   SECURITIES  HAVE  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  THE
SECURITIES  AND  EXCHANGE  COMMISSION,  NOR HAS  THE  COMMISSION  PASSED  ON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

         No person has been  authorized by us to give any information or to make
any  representation  other than as contained in this prospectus and, if given or
made, such information or representation  must not be relied upon as having been
authorized by us. Neither the delivery of this  prospectus nor any  distribution
of the shares of common stock issuable under the terms of the Plans shall, under
any  circumstances,  create any implication that there has been no change in our
affairs since the date hereof.

Our principal offices are located at:

                    11924 Forest Hill Boulevard, Suite 22-204
                            Wellington, Florida 33414
                            Telephone (954) 579-8599.

THIS  PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
PROSPECTUS

                               REOFFER PROSPECTUS

                               TMI HOLDINGS, INC.

                        6,000,000 SHARES OF COMMON STOCK
                                ($.01 PAR VALUE)

         This  prospectus  forms  a  part  of a  registration  statement,  which
registers an  aggregate  of 6,000,000  shares of common stock issued or issuable
from time-to-time  under the TMI Holdings,  Inc. 2003 Qualified  Securities Plan
(the  "Qualified  Plan")  and  the  2003  Non-Qualified   Securities  Plan  (the
"Non-Qualified Plan") (collectively the "Plans").

         TMI  Holdings,  Inc. is referred  to in this  prospectus  as "TMI," the
"Company,"  "we," "us" or "our." The 6,000,000 shares covered by this prospectus
are referred to as the  "shares."  Persons who are issued  shares are  sometimes
referred to as the "selling security holders."

         This  prospectus also covers the future resale of shares by persons who
are our "affiliates"  within the meaning of federal securities laws.  Affiliated
selling  security  holders  may sell all or a portion of the shares from time to
time in the  over-the-counter  market, in negotiated  transactions,  directly or
through  brokers or otherwise,  and at market  prices  prevailing at the time of
such  sales  or at  negotiated  prices,  but  which  may  not  exceed  1% of our
outstanding common stock in any three month period.

         We will not  receive  any  proceeds  from  sales of shares  by  selling
security holders.

         These   securities  have  not  been  approved  or  disapproved  by  the
Securities and Exchange Commission nor has the Commission passed on the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

         This  prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.

                  The date of this prospectus is July 1, 2003.
AVAILABLE INFORMATION

         We are  subject to the  informational  requirements  of the  Securities
Exchange Act of 1934, as amended, and, in accordance therewith, we file reports,
proxy  statements  and  other  information  with  the  Securities  and  Exchange
Commission.  Reports,  proxy  statements  and other  information  filed with the
Commission can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street,  N.W.,  Washington,  D.C. 20549.  Copies of this
material  can also be obtained  at  prescribed  rates from the Public  Reference
Section of the  Commission  at its principal  office at 450 Fifth Street,  N.W.,
Washington,  D.C. 20549. The Commission also maintains a website on the Internet
that contains  reports,  proxy and information  statements and other information
regarding   registrants  that  file   electronically   with  the  Commission  at
http://www.sec.gov.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The  following   documents   filed  by  us  with  the   Commission  are
incorporated herein by reference and made a part hereof:

          -    Quarterly Report on Form 10-QSB filed on June 17, 2003
          -    Annual Report on Form 10-KSB filed on May 23, 2003
          -    Form 8-K Current Report filed on June 9, 2003 and Amended on June
               11, 2003
          -    Definitive Information Statement filed on June 12, 2003

         All  reports  and  documents  filed by us pursuant to Section 13, 14 or
15(d) of the Exchange  Act,  prior to the filing of a  post-effective  amendment
which  indicates  that all  securities  offered  hereby  have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this prospectus.
         We hereby undertake to provide without charge to each person, including
any beneficial  owner, to whom a copy of the prospectus has been  delivered,  on
the written  request of any such person,  a copy of any or all of the  documents
referred to above which have been or may be  incorporated  by  reference in this
prospectus,  other than exhibits to such  documents.  Written  requests for such
copies  should be directed to Corporate  Secretary,  TMI Holdings,  Inc.,  11924
Forest Hill Boulevard, Suite 22-204, Wellington, Florida 33414.

                                       4
THE COMPANY

INTRODUCTION

         On  January  31,  2003,  the  Company  acquired  100% of the assets and
outstanding  stock of Kina'ole  Development  Corporation  (Kina'ole"),  a Hawaii
corporation.  Kina'ole is a wholly  owned  subsidiary  of the Company and is the
Company's only current business operation.  Going forward, the Company's current
plans are to divest  Kina'ole and pursue the  acquisition of undervalued  and/or
unused  manufacturing  or other assets or services.  The Company has  identified
possible  acquisition  opportunities,  and is in  very  early  discussions  with
potential acquisition candidates.

         The Company  acquired the Kina'ole shares from William Michael Sessions
and John W. Meyers, who were then directors of the Company. Messrs. Sessions and
Meyers had previously acquired their capital stock interests in the Company from
Mr. Matt Dwyer who,  in turn,  had  acquired  the stock  interest  from Mr. Marc
Douglas.  Prior to the acquisition,  the Company had not engaged in any material
business operations in over a year.

         Kina'ole  is  located  in Lihue,  Hawaii,  and  through  joint  venture
arrangements  with dealerships on each Hawaiian  island,  Kina'ole plans to sell
manufactured homes to retail customers.  Kina'ole also develops  subdivisions of
manufactured homes and has an unrelated installation company that, as a licensed
contractor,  completes the  foundation  and site work as well as installing  the
manufactured homes. Due to the inherent uncertainty in the housing market, there
is no guarantee that Kina'ole will be successful in producing manufactured homes
and/or finding suitable locations for their installation.

HISTORICAL OPERATIONS

         Until August 2001,  the Company  managed and operated  discount  retail
outlets  known  as  thrift  stores,  which  dealt in new and  used  articles  of
clothing,  miscellaneous household items, furniture, bric-a-brac and antiques at
discounted  prices.  In 2001, the Company operated six thrift stores in Florida.
These stores and all of the Company's  other  business units were sold on August
27,  2001,  in a  transaction  involving  the sale of  substantially  all of the
Company's assets to Thrift Ventures,  Inc., a corporation that was controlled by
one of the then Company's principal stockholders at that date.

         After the sale of the Company's  assets to Thrift  Ventures,  Inc., the
Company's  sole activity was to identify  potential  acquisition  candidates and
attempting to negotiate and complete the  acquisition of an operating  business.
In October 2001, the Company entered into a non-binding  letter of intent with a
privately held company for a transaction that would have resulted in a change in
control of the Company.  The letter of intent was terminated in February 2002 by
mutual agreement of the parties.

         In 2002, the Company underwent two changes of voting control, until its
current management  acquired voting control of the Company on February 21, 2003.
Currently, the Company's only business is the sale of manufactured homes through
Kina'ole, the Company's wholly-owned subsidiary. Due to the inherent uncertainty

                                       5
in the housing  market there is no guarantee that Kina'ole will be successful in
producing  manufactured  homes  and/or  finding  suitable  locations  for  their
installation.  The Company is  currently  seeking  other  potential  acquisition
candidates.

         The Company currently has no employees. Mr. Scott Siegel, the Company's
sole officer and one of its directors is an independent contractor. Kina'ole has
four employees.

RECENT DEVELOPMENTS

         As  previously  reported  in the  Company's  Schedule  14C  Information
Statement filed with the Securities and Exchange  Commission and provided to the
shareholders of TMI, the Board of Directors and the holders of a majority of the
voting  capital  stock  interest of TMI  approved an increase in the  authorized
common stock of the Company from 1,500,000 shares to 30,000,000 shares of common
stock. In addition,  the Company has adopted and obtained  approval for its 2003
Qualified  Securities  Plan and 2003  Non-Qualified  Securities  Plan.  Previous
shareholder approval was ratified anew on June 17, 2003.

         The Company, along with its Chief Executive Officer, Scott Siegel, were
recently  named in a lawsuit  filed in the  Circuit  Court for  Broward  County,
Florida (Marc Douglas v. Matthew P. Dwyer,  William  Michael  Sessions,  John W.
Meyers,  Scott Siegel, Neil Dolgin and TMI Holdings,  Inc. - Case No. 03-10440).
TMI had  previously  described  the prospect of such  litigation  in its various
reports under the  Securities  Exchange Act of 1934.  The suit seeks damages and
recovery of securities  previously  transferred to various parties in connection
with the  prior  transfer  of  control  of the  Company  by the  plaintiff.  The
complaint  also  alleges a civil  conspiracy  by Siegel and TMI to  prevent  Mr.
Douglas,  a former  officer and  director,  from  receiving  the benefits  under
various contracts he entered into with subsequent  officers and directors of the
Company  relating to the  purchase  of  securities  of the  Company  which could
potentially affect the control of TMI. This suit also claims that TMI as well as
Mr. Siegel  breached  various  contracts  affecting the  plaintiff.  Among other
remedies,  the plaintiff is seeking damages and injunctive  relief.  The Company
was only recently served with this lawsuit and is evaluating the various counts,
and both the Company and Mr. Siegel believe they have  meritorious  defenses and
claims, but will also seek an amicable resolution with the plaintiff.

             RISK FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS

         Our  future  results  of  operations  involve  a number  of  risks  and
uncertainties.  The  following  paragraphs  discuss a number of risks that could
impact the Company's financial condition and results of operations.

WE HAVE NOT COMMENCED REVENUE-PRODUCING  OPERATIONS, AND THE LIMITED INFORMATION
AVAILABLE ABOUT US MAKES AN EVALUATION OF US DIFFICULT

         We have  conducted  limited  operations,  and we have little  operating
history that permits you to evaluate  our  business and our  prospects  based on
prior  performance.  You must  consider  your  investment in light of the risks,
uncertainties,  expenses  and  difficulties  that  are  usually  encountered  by

                                       6
companies in their early stages of  development.  There can be no assurance that
we will  successfully  address such risks, and the failure to do so could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

TMI HAS LIMITED HISTORICAL OPERATIONS WITH SUBSTANTIAL POTENTIAL CAPITAL NEEDS

         TMI has a limited  operating  history  and limited  operations,  and no
revenues  since the  commencement  of its 2002 fiscal year.  In addition,  as of
March 30, 2003, the Company had insufficient  cash available to satisfy its cash
requirements  prospectively through December 28, 2003. The Company will continue
to need  additional  cash  infusions  in order for it to continue to develop and
implement  a  business  plan.  Even  if the  Company  acquires  short-term  cash
resources,  it will likely need further debt or equity funding in order to bring
products  or  services  to  market.   However,   there  are  no   agreements  or
understandings for such financing as of this time.

THERE IS SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN

         The  Company's  ability to continue as a going  concern is dependent on
its ability to raise funds to implement its  development of a business plan. The
Company's  poor  financial  condition  could  inhibit  its  ability to achieve a
business plan, due to current operations that are reflecting substantial losses.
The future  prospect of  profitability  is  severely in doubt.  Because of these
difficulties,  our independent  auditors have expressed  substantial doubt as to
our ability to continue as a going concern.

LACK OF FUNDING WILL ADVERSELY AFFECT OUR ABILITY TO GENERATE REVENUES

         The  Company's  goals are all  contingent  upon  raising debt or equity
funding.  Currently  there  are  limited  sources  for such  funding.  There are
significant risks, difficulties,  delays and unforeseen expenses associated with
companies  with limited or no operating  history.  Constraints  we face due to a
lack of funding include:

          -    Inability to generate  necessary  revenue to operate for the next
               12 months or thereafter;
          -    Operating costs that may exceed our current estimates;
          -    Unanticipated development expenses; and
          -    The Company's ability to generate  sufficient  revenues to offset
               the substantial costs of operating our business.

START-UP EXPENSES AND FUTURE LOSSES WILL ADVERSELY AFFECT OUR OPERATIONS

         Because of  significant  up-front  expenses  required to enter into new
businesses,  the Company anticipates that it may incur losses until revenues are
sufficient  to cover its  operating  costs.  Future losses are likely before our
operations  become  profitable.  As a result of the Company's  lack of operating
history, you will have no basis upon which to accurately forecast the Company's:

          -    Total assets, liabilities, and equity;
          -    Total revenues;
          -    Gross and operating margins; and
          -    Labor costs.

                                       7
Accordingly,  any subsequent  business plans may not either materialize or prove
successful, and the Company may never be profitable.

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE

         TMI does not presently intend to pay dividends on our common stock. TMI
has never paid  dividends on our common stock and does not  presently  intend to
pay cash dividends on our common stock.  Any future  decisions as to the payment
of dividends will be at the  discretion of TMI's Board of Directors,  subject to
applicable law.

OUR MANAGEMENT MAY BE UNABLE TO EFFECTIVELY INTEGRATE FUTURE ACQUISITIONS AND TO
MANAGE  OUR  GROWTH,  AND WE MAY BE  UNABLE  TO FULLY  REALIZE  ANY  ANTICIPATED
BENEFITS OF ANY ACQUISITION

         Our business strategy includes growth through  acquisition and internal
development.  We are  subject  to  various  risks  associated  with  our  growth
strategy,  including  the risk that we will be unable to  identify  and  recruit
suitable  acquisition  candidates  in the future or to integrate  and manage the
acquired  companies.  Acquired  companies'  histories,  geographical  locations,
business  models  and  business  cultures  can be  different  from  ours in many
respects.  If we should consummate one or more  acquisitions,  our directors and
senior  management  will  face a  significant  challenge  in  their  efforts  to
integrate our business and the business of the acquired companies or assets, and
to effectively  manage our continued growth.  There can be no assurance that our
efforts to integrate the operations of any acquired assets or companies acquired
in the  future  will be  successful,  that we can  manage our growth or that the
anticipated benefits of these proposed acquisitions will be fully realized.  The
dedication of management  resources to these efforts may detract  attention from
our  day-to-day  business.  There can be no  assurance  that  there  will not be
substantial  costs  associated  with these  activities  or of the success of our
integration efforts, either of which could have a material adverse effect on our
operating results.

OUR  STRATEGY  OF  SEEKING  JOINT   VENTURES  OR  STRATEGIC   ALLIANCES  MAY  BE
UNSUCCESSFUL

         We may also  choose to expand our  operations  by  entering  into joint
ventures or other strategic  alliances with other parties.  Any such transaction
would be  accompanied by the risks  commonly  encountered in such  transactions.
These include,  among others,  the difficulty of assimilating the operations and
personnel and other various  factors.  There can be no assurance should we enter
into any  strategic  alliance  with a third party that we will be  successful in
overcoming  these risks or any other  problems  encountered  in connection  with
joint ventures or other strategic alliances.

WE DEPEND ON THE  CONTINUED  SERVICES  OF SCOTT  SIEGEL  AND ON OUR  ABILITY  TO
ATTRACT AND MAINTAIN OTHER QUALIFIED EMPLOYEES

         Our future success  depends on the continued  services of Scott Siegel,
our Chief Executive Officer. The loss of his services would be detrimental to us
and could have a material  adverse effect on our business,  financial  condition
and results of operations. We do not currently maintain key-man insurance on his
life.  Our future  success is also  dependent on our ability to identify,  hire,
train and retain other qualified managerial and other employees. Competition for
these  individuals  is intense  and  increasing.  We may not be able to attract,
assimilate,  or retain  qualified  technical  and  managerial  personnel and our
failure to do so could have a material adverse effect on our business, financial
condition and results of operations.

                                       8
OUR COMMON STOCK IS THINLY TRADED AND AN ACTIVE AND VISIBLE  TRADING  MARKET FOR
OUR COMMON STOCK MAY NOT DEVELOP

         Our  common  stock  is  currently  traded  on a  limited  basis  on the
Over-the-Counter  Bulletin  Board under the symbol  "TMIO." The quotation of our
common  stock on the OTCBB does not assure  that a  meaningful,  consistent  and
liquid trading market currently  exists. We cannot predict whether a more active
market for our common  stock will  develop in the  future.  In the absence of an
active trading market:

          -    investors  may have  difficulty  buying and selling or  obtaining
               market quotations;
          -    market visibility for our common stock may be limited; and
          -    a lack of  visibility  for our common stock may have a depressive
               effect on the market price for our common stock.

THE SALE OF SHARES  ELIGIBLE FOR FUTURE SALE COULD HAVE A  DEPRESSIVE  EFFECT ON
THE MARKET PRICE FOR OUR COMMON STOCK

         As of the date of this prospectus, there are 7,589,675 shares of common
stock issued and outstanding.

         Of the  currently  issued and  outstanding  shares,  32,650  restricted
shares  of  common  stock  have  been  held  for in  excess  of one year and are
currently available for public resale pursuant to Rule 144 promulgated under the
Securities  Act ("Rule 144").  Unless  registered on a form other than Form S-8,
the  resale of our  shares of Common  Stock  owned by  officers,  directors  and
affiliates is subject to the volume  limitations  of Rule 144. In general,  Rule
144 permits our shareholders who have  beneficially  owned restricted  shares of
common  stock  for at least  one  year to sell  without  registration,  within a
three-month  period,  a number of shares not  exceeding  one percent of the then
outstanding shares of common stock. Furthermore,  if such shares are held for at
least two years by a person not affiliated with us (in general,  a person who is
not one of our executive  officers,  directors or principal  shareholders during
the  three-month  period prior to resale),  such  restricted  shares can be sold
without any volume limitation.

         Sales  of  our  common  stock  under  Rule  144  or  pursuant  to  such
registration  statement may have a depressive effect on the market price for our
common stock.

         IT IS NOT POSSIBLE TO FORESEE ALL RISKS WHICH MAY AFFECT US.  MOREOVER,
WE CANNOT PREDICT WHETHER WE WILL  SUCCESSFULLY  EFFECTUATE OUR CURRENT BUSINESS
PLAN. EACH  PROSPECTIVE  PURCHASER IS ENCOURAGED TO CAREFULLY  ANALYZE THE RISKS
AND MERITS OF AN  INVESTMENT  IN THE SHARES AND SHOULD  TAKE INTO  CONSIDERATION
WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE RISK FACTORS DISCUSSED ABOVE.

                                       9
TMI HOLDINGS, INC. 2003 QUALIFIED SECURITIES PLAN

GENERAL

         On May 2,  2003,  the  Board  of  Directors  of the  Company  approved,
declared it advisable  and in the  Company's  best  interests  and directed that
there be  submitted to the holders of a majority of the  Company's  voting stock
for action by written consent, the TMI Holdings,  Inc. 2003 Qualified Securities
Plan (the "2003 Qualified  Securities Plan"). On May 2, 2003, the 2003 Qualified
Securities  Plan was approved by written consent of a majority of voting Capital
Stock  interest of the Company's  shareholders,  which were ratified on June 17,
2003.

PURPOSE

         The  purpose of the 2003  Qualified  Securities  Plan is to promote the
interests of the Company  (including its  subsidiaries)  and its shareholders by
using  investment  interests in the Company to attract,  retain and motivate its
management and other persons,  including officers,  directors, key employees and
certain consultants,  to encourage and reward such persons' contributions to the
performance  of the Company and to align their  interests  with the interests of
the Company's  shareholders.  In furtherance of this purpose, the 2003 Qualified
Securities  Plan  authorizes the granting of the following  types of stock-based
awards (each, an "Award"):

          -    stock   options   (including    incentive   stock   options   and
               non-qualified stock options);
          -    restricted stock awards;
          -    unrestricted stock awards; and
          -    performance stock awards.

Each of these types of Awards is described below under "Awards."

ELIGIBILITY

         Key employees (including employees who are also directors or officers),
directors and certain  consultants of the Company or any subsidiary are eligible
to be granted Awards under the 2003 Qualified  Securities Plan at the discretion
of the Board of Directors. In determining the eligibility of any person, as well
as in determining the number of shares to be covered by an Award and the type or
types of Awards to be made, the Board of Directors may consider:

          -    the position,  relationship,  responsibilities  and importance of
               the person to the Company; and
          -    such other factors as the Board of Directors deems relevant.

Selected consultants may participate in the 2003 Qualified Securities Plan if:

          -    the  consultant  renders bona fide services to the Company or one
               of its subsidiaries;
          -    the services  rendered by the  consultant  are not in  connection
               with  the  offer  or  sale  of  securities  in a  capital-raising
               transaction and do not directly or indirectly promote or maintain
               a market for the Company's securities; and

                                       10
-    the consultant is a natural  person who has  contracted  directly
               with the  Company or a  subsidiary  of the Company to render such
               services.

ADMINISTRATION

         The 2003 Qualified  Securities  Plan currently is  administered  by the
Board  of  Directors.  In  the  future,  the  Board  of  Directors  may  form  a
Compensation  Committee to administer  the 2003 Qualified  Securities  Plan. Any
Compensation Committee must be comprised of at least two non-employee directors.
If  a  Compensation  Committee  is  formed  to  administer  the  2003  Qualified
Securities  Plan,  the Board of  Directors  will  delegate  to the  Compensation
Committee full authority, in its discretion, to:

          -    select  the  persons  to  whom  Awards  will be  granted  (each a
               "Participant");
          -    grant Awards under the 2003 Qualified Securities Plan;
          -    determine the number of shares to be covered by each Award;
          -    determine the nature, amount,  pricing, timing and other terms of
               the Award;
          -    interpret,  construe and  implement  the  provisions  of the 2003
               Qualified Securities Plan (including the authority to adopt rules
               and regulations for carrying out the purposes of the plan); and
          -    terminate, modify or amend the 2003 Qualified Securities Plan.

         The 2003 Qualified  Securities Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.

SHARES SUBJECT TO THE PLAN

         A total of 140,000  shares of Common Stock  (subject to  adjustment  as
described  below) are currently  reserved for issuance  under the 2003 Qualified
Securities  Plan,  which  may  be  increased  from  time  to  time  upon  proper
authorization. Shares of common stock issued under the 2003 Qualified Securities
Plan may be authorized but unissued shares, or shares reacquired by the Company,
including  shares  purchased on the open market.  The  unexercised,  unearned or
yet-to-be acquired portions of any Award that expire, terminate or are canceled,
and shares of common  stock issued  pursuant to Awards under the 2003  Qualified
Securities  Plan that are reacquired by the Company  pursuant to the terms under
which such shares were  issued,  will again  become  available  for the grant of
further Awards.

ADJUSTMENT

         In general,  the  aggregate  number of shares as to which Awards may be
granted to Participants under the 2003 Qualified Securities Plan, the number and
kind of shares thereof covered by each outstanding  Award,  and/or the price per
share  thereof in each such Award  will,  upon a  determination  of the Board of
Directors,  all be proportionately  adjusted for any increase or decrease in the
number of issued shares of common stock resulting from an increase,  decrease or
exchange in the outstanding  shares of common stock or additional  shares or new
or different  shares are  distributed in respect of such shares of common stock,
through merger,  consolidation,  sale or exchange of all or substantially all of
the assets of the Company, reorganization,  recapitalization,  reclassification,
stock dividend, stock split, reverse stock split, spin-off or other distribution
with respect to such shares.  On May 1 of each year, the number of shares in the
2003  Qualified  Securities  Plan shall  automatically  be adjusted to an amount
equal to ten percent (10%) of the issued and outstanding stock of the Company on
April 30 of the immediately preceding year.

                                       11
Fractional  interests will not be issued upon any  adjustments  made by
the Board or Directors;  however,  the committee may, in its discretion,  make a
cash  payment in lieu of any  fractional  shares of common  stock  issuable as a
result of such adjustments.

AWARDS

STOCK OPTIONS

         Under the 2003  Qualified  Securities  Plan, the Board of Directors may
grant either  incentive stock options or nonqualified  stock options.  Incentive
stock options and non-qualified  stock options may be granted for such number of
shares of common  stock as the Board of  Directors  determines,  so long as such
number of shares does not exceed the amount  permitted under the plan, or in the
case of incentive stock options,  the amount  permissible  under I.R.C.  Section
422.

         The exercise  price for each stock option is determined by the Board of
Directors.  Stock  options must have an exercise  price of at least 85% (100% in
the case of incentive  stock options,  or at least 110% in the case of incentive
stock  options  granted  to  certain  employees  owning  more  than  10%  of the
outstanding  voting  stock) of the fair market  value of the common stock on the
date the stock option is granted. Under the 2003 Qualified Securities Plan, fair
market value of the common stock for a particular  date is generally the average
of the closing bid and asked prices per share for the stock as quoted on the OTC
Bulletin Board on such date.

         No stock option may be exercised after the expiration of ten years from
the date of grant (or five years in the case of incentive  stock options granted
to certain  employees  owning more than 10% of the  outstanding  voting  stock).
Pursuant to the 2003 Qualified  Securities Plan, the aggregate fair market value
of the common stock,  for which one or more incentive  stock options  granted to
any  participant  may for the first time become  exercisable as incentive  stock
options under the federal tax laws during any one calendar year shall not exceed
$100,000.

         A stock option may be  exercised  in whole or in part  according to the
terms of the applicable  stock option agreement by delivery of written notice of
exercise to the Company  specifying  the number of shares to be  purchased.  The
exercise  price for each stock option may be paid by the  Participant in cash or
by such other means as the Board of Directors may authorize.  Fractional  shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant  reload  stock  options in tandem with stock  options  that provide for an
automatic  grant of a stock option in the event a participant  pays the exercise
price of a stock option by delivery of common stock.

         The Board of Directors  may, in its  discretion,  at any time after the
grant of a stock  option,  accelerate  vesting of such option,  as a whole or in
part, by increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.

                                       12
Subject to the foregoing and the other provisions of the 2003 Qualified
Securities  Plan,  stock  options  may be  exercised  at such  times and in such
amounts and be subject to such  restrictions and other terms and conditions,  if
any, as determined by the Board of Directors.

RESTRICTED STOCK

         Restricted  stock may be awarded by the Board of  Directors  subject to
such terms,  conditions and restrictions as it deems  appropriate.  Restrictions
may include  limitations  on voting  rights and  transferability  of the shares,
restrictions based on the duration of employment or engagement with the Company,
and  Company  or  individual  performance.  Restricted  stock may not be sold or
encumbered until all restrictions expire or are terminated.  In this regard, the
Secretary of the Company or such other  escrow  holder as the Board of Directors
may appoint  shall  retain  physical  custody of each  certificate  representing
restricted  stock until all  restrictions  imposed  under the  applicable  Award
Agreement shall expire or be removed.

         The Board of Directors may require the  Participant  to pay the Company
an amount at least  equal to the par value of the  common  stock  awarded to the
Participant.  Subject  to  any  limitations  imposed  by  the  applicable  Award
Agreement,  from  the  date a  Participant  becomes  the  holder  of  record  of
restricted  stock,  the  Participant  has all the rights of a  stockholder  with
respect to such  shares,  including  the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.

         The 2003  Qualified  Securities  Plan  provides  that to the extent the
Board of  Directors  elects  to grant an Award of  restricted  stock,  the Award
Agreement  applicable  thereto shall,  except in certain  specified  situations,
provide the  Company  with the right to  repurchase  the  restricted  stock then
subject  to  restrictions  immediately  upon  a  termination  of  employment  or
engagement  for any reason  whatsoever  at a cash  price per share  equal to the
price paid by the Participant for the restricted stock.

UNRESTRICTED STOCK

         The  Board  of  Directors  may,  in its  discretion,  grant an Award of
unrestricted  stock  to  any  eligible  Participant,   pursuant  to  which  such
Participant may receive shares of Common Stock free of any vesting  restrictions
under the 2003 Qualified  Securities  Plan. The Board of Directors may also sell
shares of  unrestricted  stock to  eligible  Participants  at a  purchase  price
determined  in its  discretion.  Unrestricted  stock may be  granted  or sold in
respect of past  services or other valid  consideration,  or in lieu of any cash
compensation due to such individual.

PERFORMANCE STOCK AWARDS

         The Board of Directors may make performance stock awards under the 2002
Qualified  Securities Plan based upon terms it deems  appropriate.  The Board of
Directors may make performance stock awards independent of or in connection with
the granting of any other Award under the 2003  Qualified  Securities  Plan. The
Board of Directors shall determine  whether and to whom performance stock awards
shall be made, the performance  criteria  applicable  under each such Award, the
periods during which  performance is to be measured,  and all other  limitations
and  conditions  applicable  to the awarded  shares.  The Board of Directors may

                                       13
utilize any of the following  performance  criteria  when  granting  performance
stock awards:

          -    net income;
          -    pre-tax income;
          -    operating income;
          -    cash flow;
          -    earnings per share;
          -    return on equity;
          -    return on invested capital or assets;
          -    cost reductions or savings;
          -    funds from operations;
          -    appreciation in the fair market value of the common stock;
          -    earnings before anyone or more of the following: interest, taxes,
               depreciation or amortization; and
          -    such other criteria deemed appropriate by the Board of Directors.

         The  Participant  receiving  a  performance  stock award shall have the
rights of a stockholder  only as to shares actually  received by the Participant
and not with respect to shares  subject to the Award but not actually  received.
At any time  prior to the  Participant's  termination  of  employment  (or other
business  relationship)  by the  Company,  the Board of  Directors  may,  in its
discretion,  accelerate,  waive or, subject to the other  provisions of the 2003
Qualified  Securities  Plan,  amend any and all performance  criteria  specified
under any performance stock award.

FEDERAL INCOME TAX CONSEQUENCES

         The following is a brief summary of the  principal  federal  income tax
consequences of the grant and exercise of Awards under present law. This summary
is not intended to be exhaustive and does not describe  foreign,  state or local
tax consequences. Recipients of Awards are advised to consult their personal tax
advisors with regard to all tax consequences arising with respect to the Awards.

TAX WITHHOLDING

         If a distribution is made under this 2003 Qualified  Securities Plan in
cash,  the  Company  will  withhold  taxes as  required  by law.  If an Award is
satisfied  in the form of  shares of the  common  stock,  then no shares  may be
issued unless and until arrangements  satisfactory to the Company have been made
to satisfy  any tax  withholding  obligations  applicable  with  respect to such
Award.

DEDUCTIBILITY OF AWARDS

         Company   deductions  for  Awards  granted  under  the  2003  Qualified
Securities  Plan are limited by Section  162(m) of the Internal  Revenue Code of
1986  (the  "Code")  which   generally   limits  the  Company's   deduction  for
non-performance  based  compensation  to $1.0 million per year for the Company's
CEO and its other four (4) most highly compensated officers. The Company has not
paid any  compensation  that was not deductible by reason of the  prohibition of
Section 162(m) to any executive officers.

                                       14
INCENTIVE STOCK OPTIONS

         Pursuant  to the  2003  Qualified  Securities  Plan,  employees  may be
granted stock options that are intended to qualify as "incentive  stock options"
under the  provisions of Section 422 of the Code. An optionee will not recognize
any taxable  income for federal income tax purposes upon receipt of an incentive
stock  option or,  generally,  at the time of  exercise  of an  incentive  stock
option.  The exercise of an incentive  stock option  generally will result in an
increase in an optionee's taxable income for alternative minimum tax purposes.

         If an optionee exercises an incentive stock option and does not dispose
of the shares received in a subsequent "disqualifying disposition" (generally, a
sale,  gift or other  transfer  within two years  after the date of grant of the
incentive  stock option or within one year after the shares are  transferred  to
the optionee),  upon  disposition of the shares any amount realized in excess of
the  optionee's  tax  basis  in the  shares  disposed  of will be  treated  as a
long-term  capital  gain,  and any loss will be treated as a  long-term  capital
loss. In the event of a disqualifying  disposition,  the difference  between the
fair  market  value  of the  shares  received  on the date of  exercise  and the
exercise  price  (limited,  in the case of a taxable  sale or  exchange,  to the
excess of the amount realized upon  disposition over the optionee's tax basis in
the shares) will be treated as compensation received by the optionee in the year
of  disposition.  Any additional  gain will be taxable as a capital gain and any
loss as a capital loss, which will be long-term or short-term,  depending on the
length of time the optionee held the shares.

         If the exercise price of an incentive  stock option is paid in whole or
in part with shares of common stock,  no income gain or loss  generally  will be
recognized  by the  optionee  with respect to the shares of common stock paid as
the exercise price.  However,  if such shares of common stock were received upon
the exercise of an incentive stock option, the use of those shares as payment of
the exercise price will be considered a disposition  for purposes of determining
whether there has been a disqualifying disposition of those shares.

         Neither the Company nor any of its  subsidiaries  will be entitled to a
deduction  with respect to shares  received by an optionee  upon  exercise of an
incentive stock option and not disposed of in a disqualifying disposition. If an
amount  is  treated  as  compensation  received  by  an  optionee  because  of a
disqualifying disposition, the Company or one of its subsidiaries generally will
be entitled to a  corresponding  deduction  in the same amount for  compensation
paid.

NON-QUALIFIED STOCK OPTIONS

         An optionee will not recognize  any taxable  income for federal  income
tax purposes upon receipt of a non-qualified  stock option. Upon the exercise of
a  non-qualified  stock  option the amount by which the fair market value of the
shares  received,  determined  as of the date of exercise,  exceeds the exercise
price, the stock option will be treated as compensation received by the optionee
in the year of exercise.  If the exercise price of a non-qualified  stock option
is paid in whole or in part with shares of common stock, (i) no income,  gain or
loss will be  recognized by the optionee on the receipt of shares equal in value
on the date of  exercise  to the shares  delivered  in  payment of the  exercise
price, and (ii) no income,  gain or loss will be recognized by the optionee with
respect to the shares of common stock paid as the exercise  price of the option.
The fair market value of the  remainder of the shares  received upon exercise of
the non-qualified stock option,  determined as of the date of exercise, less the
amount of cash,  if any,  paid upon  exercise,  will be treated as  compensation
income received by the optionee on the date of exercise of the stock option. The
Company,  or one of its subsidiaries,  generally will be entitled to a deduction
for compensation paid in the same amount treated as compensation received by the
optionee.

                                       15
RELOAD OPTION RIGHTS

         An optionee  should not recognize any taxable income for federal income
tax purposes upon receipt of reload option rights, and a reload option should be
treated as a non-qualified stock option.

RESTRICTED STOCK

         A recipient of restricted  stock will not recognize any taxable  income
for federal  income tax  purposes in the year of the Award,  provided the shares
are subject to restrictions (that is, they are non-transferable and subject to a
substantial risk of forfeiture).  However, the recipient may elect under Section
83(b) of the Code to recognize  compensation  income in the year of the Award in
an amount  equal to the fair market value of the shares on the date of the Award
(less the amount paid by the  recipient  for such  shares),  determined  without
regard to the  restrictions.  If the  recipient  does not make a  Section  83(b)
election, the fair market value of the shares on the date the restrictions lapse
(less the  amount  paid by the  recipient  for such  shares)  will be treated as
compensation  income  to the  recipient  and  will be  taxable  in the  year the
restrictions  lapse.  The Company or one of its  subsidiaries  generally will be
entitled  to a deduction  for  compensation  paid in the same amount  treated as
compensation income to the recipient.

UNRESTRICTED STOCK

         Any  shares  of  common  stock   received   pursuant  to  an  Award  of
unrestricted  stock will be  treated  as  compensation  income  received  by the
recipient,  generally,  in the year in which the recipient receives such shares.
In each case, the amount of compensation income will equal the fair market value
of the  shares of common  stock on the date  compensation  income is  recognized
(less the amount, if any, paid by the recipient for such shares). The Company or
one  of  its  subsidiaries,  generally,  will  be  entitled  to a  corresponding
deduction in the same amount for compensation paid.

PERFORMANCE STOCK AWARDS

         A recipient of a performance stock award will not recognize any taxable
income for federal income tax purposes upon receipt of the Award.  Any shares of
common  stock  received  pursuant  to the Award will be treated as  compensation
income received by the recipient,  generally, in the year in which the recipient
receives such shares of common  stock.  The amount of  compensation  income will
equal  the  fair  market  value  of the  shares  of  common  stock  on the  date
compensation  income is  recognized.  The  Company  or one of its  subsidiaries,
generally,  will be entitled to a deduction  for  compensation  paid in the same
amount treated as compensation income to the recipient.

                                       16
OTHER TAX MATTERS

         The  exercise  by  a  recipient  of  a  stock  option,   the  lapse  of
restrictions  on restricted  stock,  or the deemed earnout of performance  stock
awards   following  the   occurrence   of  a  change  in  control,   in  certain
circumstances, may result in:

          -    a 20% federal  excise tax (in addition to federal  income tax) to
               the  recipient  on  certain  payments  of  common  stock  or cash
               resulting  from such  exercise or deemed  earnout of  performance
               stock  awards or, in the case of  restricted  stock,  on all or a
               portion  of the fair  market  value of the shares on the date the
               restrictions lapse; and
          -    the loss of a  compensation  deduction  which would  otherwise be
               allowable to the Company or one of its  subsidiaries as explained
               above.

GRANTS UNDER THE 2003 QUALIFIED SECURITIES PLAN

         As of the date hereof,  no employee has been granted  Options or Shares
under the Plan.

            THE TMI HOLDINGS, INC. 2003 NON-QUALIFIED SECURITIES PLAN

GENERAL

         On May 2,  2003,  the  Board  of  Directors  of the  Company  approved,
declared it advisable  and in the  Company's  best  interests  and directed that
there be  submitted to the holders of a majority of the  Company's  voting stock
for  action by  written  consent,  the TMI  Holdings,  Inc.  2003  Non-Qualified
Securities Plan (the "2003 Non-Qualified  Securities Plan"). On May 2, 2003, the
Board of  Directors  approval  of the  2003  Non-Qualified  Securities  Plan was
ratified by written  consent of a majority of voting  Capital Stock  interest of
the Company's Stockholders. The 2003 Non-Qualified Securities Plan is already in
effect based upon the above Board of Directors' approval.

PURPOSE

         The purpose of the 2003 Non-Qualified Securities Plan is to promote the
interests of the Company  (including its  subsidiaries)  and its stockholders by
using  investment  interests in the Company to attract,  retain and motivate its
management and other persons,  including officers,  directors, key employees and
certain consultants,  to encourage and reward such persons' contributions to the
performance  of the Company and to align their  interests  with the interests of
the  Company's   stockholders.   In  furtherance  of  this  purpose,   the  2003
Non-Qualified  Securities Plan authorizes the granting of the following types of
stock-based awards (each, an "Award"):

          -    stock   options   (including    incentive   stock   options   and
               non-qualified stock options);
          -    restricted stock awards;
          -    unrestricted stock awards; and
          -    performance stock awards.

                                       17
Each of these types of Awards is described below under "Awards."

ELIGIBILITY

         Key employees (including employees who are also directors or officers),
directors and certain  consultants of the Company or any subsidiary are eligible
to be  granted  Awards  under  the  2003  Non-Qualified  Securities  Plan at the
discretion of the Board of Directors.  In  determining  the  eligibility  of any
person, as well as in determining the number of shares to be covered by an Award
and the type or types of Awards to be made, the Board of Directors may consider:

          -    the position,  relationship,  responsibilities  and importance of
               the person to the Company; and
          -    such other factors as the Board of Directors deems relevant.

Selected  consultants may participate in the 2003 Non-Qualified  Securities Plan
if:

          -    the  consultant  renders bona fide services to the Company or one
               of its subsidiaries;
          -    the services  rendered by the  consultant  are not in  connection
               with  the  offer  or  sale  of  securities  in a  capital-raising
               transaction and do not directly or indirectly promote or maintain
               a market for the Company's securities; and
          -    the consultant is a natural  person who has  contracted  directly
               with the  Company or a  subsidiary  of the Company to render such
               services.

ADMINISTRATION

         The 2003 Non-Qualified Securities Plan currently is administered by the
Board  of  Directors.  In  the  future,  the  Board  of  Directors  may  form  a
Compensation Committee to administer the 2003 Non-Qualified Securities Plan. Any
Compensation Committee must be comprised of at least two non-employee directors.
If a  Compensation  Committee  is formed to  administer  the 2003  Non-Qualified
Securities  Plan,  the Board of  Directors  will  delegate  to the  Compensation
Committee full authority, in its discretion, to:

          -    select  the  persons  to  whom  Awards  will be  granted  (each a
               "Participant");
          -    grant Awards under the 2003 Non-Qualified Securities Plan;
          -    determine the number of shares to be covered by each Award;
          -    determine the nature, amount,  pricing, timing and other terms of
               the Award;
          -    interpret,  construe and  implement  the  provisions  of the 2003
               Non-Qualified  Securities  Plan (including the authority to adopt
               rules and regulations for carrying out the purposes of the plan);
               and
          -    terminate,  modify  or amend  the 2003  Non-Qualified  Securities
               Plan.

         The 2003 Non-Qualified Securities Plan is not subject to the provisions
of the Employee Retirement Income Security Act of 1974.

                                       18
SHARES SUBJECT TO THE PLAN

         A total of 2.5 million shares of Common Stock (subject to adjustment as
described  below)  are  reserved  for  issuance  under  the  2003  Non-Qualified
Securities   Plan  which  may  be  increased  from  time  to  time  upon  proper
authorization.  Shares  of common  stock  issued  under  the 2003  Non-Qualified
Securities Plan may be authorized but unissued shares,  or shares  reacquired by
the Company,  including  shares  purchased on the open market.  The unexercised,
unearned or yet-to-be  acquired portions of any Award that expire,  terminate or
are  canceled,  and shares of common stock  issued  pursuant to Awards under the
2003  Non-Qualified  Securities Plan that are reacquired by the Company pursuant
to the terms under which such shares were issued,  will again  become  available
for the grant of further Awards.

ADJUSTMENT

         In general,  the  aggregate  number of shares as to which Awards may be
granted to Participants under the 2003 Non-Qualified Securities Plan, the number
and kind of shares thereof covered by each outstanding  Award,  and/or the price
per share thereof in each such Award will, upon a determination  of the Board of
Directors,  all be proportionately  adjusted for any increase or decrease in the
number of issued shares of common stock resulting from an increase,  decrease or
exchange in the outstanding  shares of common stock or additional  shares or new
or different  shares are  distributed in respect of such shares of common stock,
through merger,  consolidation,  sale or exchange of all or substantially all of
the assets of the Company, reorganization,  recapitalization,  reclassification,
stock dividend, stock split, reverse stock split, spin-off or other distribution
with respect to such shares.

         Fractional  interests will not be issued upon any  adjustments  made by
the Board or Directors;  however,  the committee may, in its discretion,  make a
cash  payment in lieu of any  fractional  shares of common  stock  issuable as a
result of such adjustments.

AWARDS

STOCK OPTIONS

         Under the 2003  Non-Qualified  Securities  Plan, the Board of Directors
may only grant non-qualified  stock options.  Non-qualified stock options may be
granted  for such  number of shares  of common  stock as the Board of  Directors
determines,  so long as such  number  of  shares  does  not  exceed  the  amount
permitted under the plan.

         The exercise  price for each stock option is determined by the Board of
Directors.  Stock options under the 2003 Non-Qualified Securities Plan must have
an exercise  price of at least 85% of the fair market  value of the common stock
on the date the stock option is granted. Under the 2003 Non-Qualified Securities
Plan,  fair market value of the common stock for a particular  date is generally
the  average  of the  closing  bid and asked  prices  per share for the stock as
quoted on the OTC Bulletin Board on such date.

         No stock option may be exercised after the expiration of ten years from
the date of grant.

                                       19
A stock option may be  exercised  in whole or in part  according to the
terms of the applicable  stock option agreement by delivery of written notice of
exercise to the Company  specifying  the number of shares to be  purchased.  The
exercise  price for each stock option may be paid by the  Participant in cash or
by such other means as the Board of Directors may authorize.  Fractional  shares
are not to be issued upon exercise of a stock option. The Board of Directors may
grant  reload  stock  options in tandem with stock  options  that provide for an
automatic  grant of a stock option in the event a participant  pays the exercise
price of a stock option by delivery of common stock.

         The Board of Directors  may, in its  discretion,  at any time after the
grant of a stock  option,  accelerate  vesting of such option,  as a whole or in
part, by increasing the number of shares then purchasable. However, the Board of
Directors may not increase the total number of shares subject to an option.

         Subject  to  the  foregoing  and  the  other  provisions  of  the  2003
Non-Qualified  Securities Plan, stock options may be exercised at such times and
in such  amounts  and be  subject  to such  restrictions  and  other  terms  and
conditions, if any, as determined by the Board of Directors.

RESTRICTED STOCK

         Restricted  stock may be awarded by the Board of  Directors  subject to
such terms,  conditions and restrictions as it deems  appropriate.  Restrictions
may include  limitations  on voting  rights and  transferability  of the shares,
restrictions based on the duration of employment or engagement with the Company,
and  Company  or  individual  performance.  Restricted  stock may not be sold or
encumbered until all restrictions expire or are terminated.  In this regard, the
Secretary of the Company or such other  escrow  holder as the Board of Directors
may appoint  shall  retain  physical  custody of each  certificate  representing
restricted  stock until all  restrictions  imposed  under the  applicable  Award
Agreement shall expire or be removed.

         The Board of Directors may require the  Participant  to pay the Company
an amount at least  equal to the par value of the  common  stock  awarded to the
Participant.  Subject  to  any  limitations  imposed  by  the  applicable  Award
Agreement,  from  the  date a  Participant  becomes  the  holder  of  record  of
restricted  stock,  the  Participant  has all the rights of a  stockholder  with
respect to such  shares,  including  the right to vote the shares and to receive
all dividends and other distributions paid with respect to the shares.

         The 2003 Non-Qualified  Securities Plan provides that to the extent the
Board of  Directors  elects  to grant an Award of  restricted  stock,  the Award
Agreement  applicable  thereto shall,  except in certain  specified  situations,
provide the  Company  with the right to  repurchase  the  restricted  stock then
subject  to  restrictions  immediately  upon  a  termination  of  employment  or
engagement  for any reason  whatsoever  at a cash  price per share  equal to the
price paid by the Participant for the restricted stock.

                                       20
UNRESTRICTED STOCK

         The  Board  of  Directors  may,  in its  discretion,  grant an Award of
unrestricted  stock  to  any  eligible  Participant,   pursuant  to  which  such
Participant may receive shares of Common Stock free of any vesting  restrictions
under the 2003  Non-Qualified  Securities  Plan. The Board of Directors may also
sell shares of unrestricted  stock to eligible  Participants at a purchase price
determined  in its  discretion.  Unrestricted  stock may be  granted  or sold in
respect of past  services or other valid  consideration,  or in lieu of any cash
compensation due to such individual.

PERFORMANCE STOCK AWARDS

         The Board of Directors may make performance stock awards under the 2002
Securities  Plan based upon terms it deems  appropriate.  The Board of Directors
may make  performance  stock awards  independent  of or in  connection  with the
granting of any other Award under the 2003  Non-Qualified  Securities  Plan. The
Board of Directors shall determine  whether and to whom performance stock awards
shall be made, the performance  criteria  applicable  under each such Award, the
periods during which  performance is to be measured,  and all other  limitations
and  conditions  applicable  to the awarded  shares.  The Board of Directors may
utilize any of the following  performance  criteria  when  granting  performance
stock awards:

          -    net income;
          -    pre-tax income;
          -    operating income;
          -    cash flow;
          -    earnings per share;
          -    return on equity;
          -    return on invested capital or assets;
          -    cost reductions or savings;
          -    funds from operations;
          -    appreciation in the fair market value of the common stock;
          -    earnings before anyone or more of the following: interest, taxes,
               depreciation or amortization; and
          -    such other criteria deemed appropriate by the Board of Directors.

         The  Participant  receiving  a  performance  stock award shall have the
rights of a stockholder  only as to shares actually  received by the Participant
and not with respect to shares  subject to the Award but not actually  received.
At any time  prior to the  Participant's  termination  of  employment  (or other
business  relationship)  by the  Company,  the Board of  Directors  may,  in its
discretion,  accelerate,  waive or, subject to the other  provisions of the 2003
Non-Qualified  Securities Plan, amend any and all performance criteria specified
under any performance stock award.

FEDERAL INCOME TAX CONSEQUENCES

         The following is a brief summary of the  principal  federal  income tax
consequences of the grant and exercise of Awards under present law. This summary
is not intended to be exhaustive and does not describe  foreign,  state or local
tax consequences. Recipients of Awards are advised to consult their personal tax
advisors with regard to all tax consequences arising with respect to the Awards.

                                       21
TAX WITHHOLDING

         If a distribution is made under this 2003 Non-Qualified Securities Plan
in cash,  the  Company  will  withhold  taxes as required by law. If an Award is
satisfied  in the form of  shares of the  common  stock,  then no shares  may be
issued unless and until arrangements  satisfactory to the Company have been made
to satisfy  any tax  withholding  obligations  applicable  with  respect to such
Award.
DEDUCTIBILITY OF AWARDS

         Company  deductions  for Awards  granted  under the 2003  Non-Qualified
Securities  Plan are limited by Section  162(m) of the Internal  Revenue Code of
1986  (the  "Code")  which   generally   limits  the  Company's   deduction  for
non-performance  based  compensation  to $1.0 million per year for the Company's
CEO and its other four (4) most highly compensated officers. The Company has not
paid any  compensation  that was not deductible by reason of the  prohibition of
Section 162(m) to any executive officers.

NON-QUALIFIED STOCK OPTIONS

         An optionee will not recognize  any taxable  income for federal  income
tax purposes upon receipt of a non-qualified  stock option. Upon the exercise of
a  non-qualified  stock  option the amount by which the fair market value of the
shares  received,  determined  as of the date of exercise,  exceeds the exercise
price, the stock option will be treated as compensation received by the optionee
in the year of exercise.  If the exercise price of a non-qualified  stock option
is paid in whole or in part with shares of common stock, (i) no income,  gain or
loss will be  recognized by the optionee on the receipt of shares equal in value
on the date of  exercise  to the shares  delivered  in  payment of the  exercise
price, and (ii) no income,  gain or loss will be recognized by the optionee with
respect to the shares of common stock paid as the exercise  price of the option.
The fair market value of the  remainder of the shares  received upon exercise of
the non-qualified stock option,  determined as of the date of exercise, less the
amount of cash,  if any,  paid upon  exercise,  will be treated as  compensation
income received by the optionee on the date of exercise of the stock option. The
Company,  or one of its subsidiaries,  generally will be entitled to a deduction
for compensation paid in the same amount treated as compensation received by the
optionee.

RELOAD OPTION RIGHTS

         An optionee  should not recognize any taxable income for federal income
tax purposes upon receipt of reload option rights, and a reload option should be
treated as a non-qualified stock option.

RESTRICTED STOCK

         A recipient of restricted  stock will not recognize any taxable  income
for federal  income tax  purposes in the year of the Award,  provided the shares
are subject to restrictions (that is, they are non-transferable and subject to a
substantial risk of forfeiture).  However, the recipient may elect under Section
83(b) of the Code to recognize  compensation  income in the year of the Award in
an amount  equal to the fair market value of the shares on the date of the Award
(less the amount paid by the  recipient  for such  shares),  determined  without
regard to the  restrictions.  If the  recipient  does not make a  Section  83(b)
election, the fair market value of the shares on the date the restrictions lapse
(less the  amount  paid by the  recipient  for such  shares)  will be treated as
compensation  income  to the  recipient  and  will be  taxable  in the  year the
restrictions  lapse.  The Company or one of its  subsidiaries  generally will be
entitled  to a deduction  for  compensation  paid in the same amount  treated as
compensation income to the recipient.

                                       22
UNRESTRICTED STOCK

         Any  shares  of  common  stock   received   pursuant  to  an  Award  of
unrestricted  stock will be  treated  as  compensation  income  received  by the
recipient,  generally,  in the year in which the recipient receives such shares.
In each case, the amount of compensation income will equal the fair market value
of the  shares of common  stock on the date  compensation  income is  recognized
(less the amount, if any, paid by the recipient for such shares). The Company or
one  of  its  subsidiaries,  generally,  will  be  entitled  to a  corresponding
deduction in the same amount for compensation paid.

PERFORMANCE STOCK AWARDS

         A recipient of a performance stock award will not recognize any taxable
income for federal income tax purposes upon receipt of the Award.  Any shares of
common  stock  received  pursuant  to the Award will be treated as  compensation
income received by the recipient,  generally, in the year in which the recipient
receives such shares of common  stock.  The amount of  compensation  income will
equal  the  fair  market  value  of the  shares  of  common  stock  on the  date
compensation  income is  recognized.  The  Company  or one of its  subsidiaries,
generally,  will be entitled to a deduction  for  compensation  paid in the same
amount treated as compensation income to the recipient.

OTHER TAX MATTERS

         The  exercise  by  a  recipient  of  a  stock  option,   the  lapse  of
restrictions  on restricted  stock,  or the deemed earnout of performance  stock
awards   following  the   occurrence   of  a  change  in  control,   in  certain
circumstances, may result in:

          -    a 20% federal  excise tax (in addition to federal  income tax) to
               the  recipient  on  certain  payments  of  common  stock  or cash
               resulting  from such  exercise or deemed  earnout of  performance
               stock  awards or, in the case of  restricted  stock,  on all or a
               portion  of the fair  market  value of the shares on the date the
               restrictions lapse; and
          -    the loss of a  compensation  deduction  which would  otherwise be
               allowable to the Company or one of its  subsidiaries as explained
               above.

                                       23
RESTRICTIONS UNDER SECURITIES LAWS

         The  sale  of all  shares  issued  under  the  Plans  must  be  made in
compliance with federal and state securities  laws. Our officers,  directors and
10% or greater shareholders, as well as certain other persons or parties who may
be deemed to be "affiliates" of ours under federal  securities  laws,  should be
aware that  resales by  affiliates  can only be made  pursuant  to an  effective
registration  statement,  Rule 144 or other applicable exemption.  Our officers,
directors and 10% and greater shareholders may also become subject to the "short
swing" profit rule of Section 16(b) of the Securities Exchange Act of 1934.

                              PLAN OF DISTRIBUTION

         The information  under this heading  includes resales of shares covered
by this  prospectus by persons who are our  "affiliates" as that term in defined
under federal securities laws.

         The shares  covered by this  prospectus  may be resold and  distributed
from time to time by the selling security  holders in one or more  transactions,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales to one or more  broker-dealers  for  resale  of these  shares  as
principals,  at market prices existing at the time of sale, at prices related to
existing market prices,  through Rule 144 transactions or at negotiated  prices.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the selling security holders in connection with sales of securities.

         The  selling  security  holders  may sell  shares in one or more of the
following methods,  which may include crosses or block  transactions:

          -    through  the  "pink  sheets",  on the  over-the-counter  Bulletin
               Board, or on such exchanges or over-the-counter  markets on which
               our shares may be listed from time-to-time, in transactions which
               may include  special  offerings,  exchange  distributions  and/or
               secondary  distributions,  pursuant to and in accordance with the
               rules of such exchanges;

          -    in   transactions   other  than  on  such  exchanges  or  in  the
               over-the-counter  market, or a combination of such  transactions,
               including  sales through  brokers,  acting as principal or agent,
               sales in privately negotiated  transactions,  or dispositions for
               value, subject to rules relating to sales by affiliates; or

          -    through the writing of options on our shares, whether or not such
               options  are  listed  on  an  exchange,   or  other  transactions
               requiring  delivery of our shares,  or the delivery of our shares
               to close out a short position.

         Any such  transactions  may be effected at market prices  prevailing at
the time of sale,  at  prices  related  to such  prevailing  market  prices,  at
negotiated prices or at fixed prices.

                                       24
In making  sales,  brokers  or  dealers  used by the  selling  security
holders  may arrange for other  brokers or dealers to  participate.  The selling
security  holders  who  are  affiliates  of TMI and  others  through  whom  such
securities are sold may be  "underwriters"  within the meaning of the Securities
Act for the securities offered,  and any profits realized or commission received
may be  considered  underwriting  compensation.  Information  as to  whether  an
underwriter(s) who may be selected by the selling security holders, or any other
broker-dealer, is acting as principal or agent for the selling security holders,
the  compensation  to be  received  by  underwriters  who may be selected by the
selling security holders, or any broker-dealer, acting as principal or agent for
the  selling  security  holders  and the  compensation  to be  received by other
broker-dealers,  in the event the  compensation  of other  broker-dealers  is in
excess of usual and customary commissions,  will, to the extent required, be set
forth in a supplement to this prospectus.  Any dealer or broker participating in
any  distribution  of the  shares  may be  required  to  deliver  a copy of this
prospectus, including the supplement, if any, to any person who purchases any of
the shares from or through a dealer or broker.

         We have advised the selling security holders that, at the time a resale
of the shares is made by or on behalf of a selling  security  holder,  a copy of
this prospectus is to be delivered.

         We have also advised the selling  security holders that during the time
as they may be engaged in a distribution  of the shares included herein they are
required  to  comply  with  Regulation  M of  the  Exchange  Act.  With  certain
exceptions,  Regulation M precludes any selling security holders, any affiliated
purchasers  and any  broker-dealer  or  other  person  who  participates  in the
distribution from bidding for or purchasing,  or attempting to induce any person
to bid for or purchase  any  security  which is the subject of the  distribution
until the entire distribution is complete.  Regulation M also prohibits any bids
or purchase  made in order to  stabilize  the price of a security in  connection
with the distribution of that security.

         Sales of securities by the selling  security holders and us or even the
potential  of these  sales may have an adverse  effect on the  market  price for
shares of our common stock.

                            DESCRIPTION OF SECURITIES

GENERAL

         The following  description  of our capital stock and  provisions of our
Articles of  Incorporation is a summary thereof and is qualified by reference to
our Articles of Incorporation, copies of which may be obtained upon request. Our
authorized capital consists of 30,000,000 shares of common stock, par value $.01
per  share,  of which  7,589,675  shares  are  issued  and  outstanding.  We are
authorized to issue 2,000,000 shares of preferred stock, of which 750,000 shares
are issued or outstanding.

COMMON STOCK

         Holders of shares of common stock are  entitled to share,  on a ratable
basis, such dividends as may be declared by the board of directors out of funds,
legally  available  therefor.  Upon our liquidation,  dissolution or winding up,
after payment to  creditors,  our assets will be divided pro rata on a per share
basis among the holders of our common stock.

                                       25
Each share of common stock  entitles  the holders  thereof to one vote.
Holders  of common  stock do not have  cumulative  voting  rights.  Our  By-Laws
require  that only a  majority  of our  issued and  outstanding  shares  need be
represented to constitute a quorum and to transact  business at a  stockholders'
meeting.  Our common stock has no preemptive,  subscription or conversion rights
and is not redeemable by us.

PREFERRED STOCK

         Our  articles of  incorporation  authorizes  our board of  directors to
create  and  issue  series  of  preferred  stock  from  time to time,  with such
designations,    preferences,    conversion   rights,   cumulative,    relative,
participating,    optional   or   other   rights,   including   voting   rights,
qualifications,  limitations or restrictions  thereof as permitted under Florida
law.

         The Company has established its Series A Preferred Stock  consisting in
total of 250,000 shares.  This series carries no dividend or conversion  rights,
but  includes  a stated  right to vote 10  shares  for  each  share of  Series A
Preferred  Stock.  The  Series  A  Preferred  Stock  will  have  priority  as to
liquidation  with respect to the Common Stock and any series of preferred  stock
ranking junior to the Series A Preferred Stock.

         The Company  authorized the  establishment  of its Series B Convertible
Preferred Stock on January 31, 2003, and subsequently  filed an amendment to the
designations.  The Series B Preferred  Stock carries no specified  dividend rate
and may be  declared  pro rata  with the  common  stock on a pari  passu  basis.
However,  no  dividend  may  be  declared  while  the  Company  has  outstanding
indebtedness.  Any  dividends  will  accrue  on  a  non-cumulative  basis.  Upon
liquidation,  the  Series B  Preferred  Stock  will  have  the same  liquidation
preference  equal to that of the common stock of TMI. If at any time at least 5%
of Kina'ole's outstanding common stock is distributed to TMI's shareholders on a
pro rata basis,  the Series B Preferred  Stock will  automatically  convert into
that  number  of shares of  common  stock of  Kina'ole  equal to 90% of the then
outstanding common stock of Kina'ole. In the original designations,  the Company
provided  for each  share of  Series B  Preferred  Stock to have 30 votes on all
matters submitted to shareholders. Thereafter, the Company filed an amendment to
eliminate  the voting  rights of the Series B  Preferred  Stock.  No  redemption
rights are provided with regard to the Series B Preferred Stock.

TRANSFER AGENT AND REGISTRAR

         The transfer agent and registrar for our common stock is North American
Transfer  Company is North  American  Transfer  Company,  147 West Merrick Road,
Freeport, New York 11520.

                                     EXPERTS

         The financial statements of TMI Holdings, Inc. as of December 29, 2002,
and for the years ended  December 29, 2002 and  December 30, 2001,  appearing in
our Annual Report on Form 10-KSB for the year ended  December 29, 2002 have been
audited by Berkowitz,  Dick Pollack & Brant, LLP, Certified Public  Accountants,
as set forth in their  report  thereon  and are  incorporated  by  reference  in
reliance upon the authority of such firm as experts in auditing and accounting.

                                       26
INDEMNIFICATION

         The Florida Business Corporation Act allows us to indemnify each of our
officers and directors who are made a party to a proceeding if

               (a)  the officer or director conducted himself or herself in good
                    faith;
               (b)  his or her  conduct  was in our  best  interests,  or if the
                    conduct  was not in an official  capacity,  that the conduct
                    was not opposed to our best interests; and
               (c)  in the  case  of a  criminal  proceeding,  he or she  had no
                    reasonable  cause to  believe  that his or her  conduct  was
                    unlawful.

         Article IX of the Company's Restated Articles of Incorporation  provide
as follows:

                                   "Article IX

                  To the fullest extent permitted by law, no director or officer
         of the Corporation shall be personally liable to the Corporation or its
         shareholders for damages for breach of any duty owed to the Corporation
         or its shareholders. In addition, the Corporation shall have the power,
         in its Bylaws or in any resolution of its stockholders or directors, to
         undertake to indemnify the officers and  directors of this  Corporation
         against any contingency or peril as may be determined to be in the best
         interests  of  this  Corporation,  and  in  conjunction  therewith,  to
         procure, at this Corporation's expense, policies of insurance."

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors,  officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange  Commission such  indemnification  is
against  public  policy  as  expressed  in the  Securities  Act of 1933  and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or controlling  person in the successful defense
of any action,  suit or  proceeding)  is asserted by such  director,  officer or
controlling person in connection with the securities being registered,  we will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities  Act of 1933 and will be governed by the final  adjudication  of such
issue.
PART II
                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

         The  documents  listed  below  are  incorporated  by  reference  in the
Registration  Statement.  All  documents  subsequently  filed by the  Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange  Act"),  prior to the filing of a post-effective
amendment  which  indicates that all securities  offered have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated by reference in the  Registration  Statement and to be part thereof
from the date of filing of such documents.

          -    Quarterly Report on Form 10-QSB filed on June 17, 2003
          -    Annual Report on Form 10-KSB filed on May 23, 2003
          -    Form 8-K Current Report filed on June 9, 2003 and Amended on June
               11, 2003
          -    Definitive Information Statement filed on June 12, 2003

         All  reports  and  documents  filed by us pursuant to Section 13, 14 or
15(d) of the Exchange  Act,  prior to the filing of a  post-effective  amendment
which  indicates  that all  securities  offered  hereby  have been sold or which
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this prospectus.

         We hereby undertake to provide without charge to each person, including
any beneficial  owner, to whom a copy of the prospectus has been  delivered,  on
the written  request of any such person,  a copy of any or all of the  documents
referred to above which have been or may be  incorporated  by  reference in this
prospectus,  other than exhibits to such  documents.  Written  requests for such
copies  should be directed to Corporate  Secretary,  TMI Holdings,  Inc.,  11924
Forest Hill Boulevard, Suite 22-204, Wellington, Florida 33414.

ITEM 4. DESCRIPTION OF SECURITIES

         A  description  of the  Registrant's  securities  is set  forth  in the
Prospectus incorporated as a part of this Registration Statement.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not Applicable.

                                      II-1
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Florida Business Corporation Act allows us to indemnify each of our officers
and directors who are made a party to a proceeding if

          (d)  the  officer  or  director  conducted  himself or herself in good
               faith;
          (e)  his or her conduct was in our best  interests,  or if the conduct
               was not in an official capacity, that the conduct was not opposed
               to our best interests; and
          (f)  in the case of a criminal proceeding, he or she had no reasonable
               cause to believe that his or her conduct was unlawful.

         Article IX of the Company's Restated Articles of Incorporation  provide
as follows:

                                   "Article IX

                  To the fullest extent permitted by law, no director or officer
                  of  the  Corporation   shall  be  personally   liable  to  the
                  Corporation or its  shareholders for damages for breach of any
                  duty owed to the Corporation or its shareholders. In addition,
                  the Corporation  shall have the power, in its Bylaws or in any
                  resolution of its  stockholders or directors,  to undertake to
                  indemnify  the  officers  and  directors  of this  Corporation
                  against any contingency or peril as may be determined to be in
                  the best  interests of this  Corporation,  and in  conjunction
                  therewith, to procure, at this Corporation's expense, policies
                  of insurance."

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors,  officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange  Commission such  indemnification  is
against  public  policy  as  expressed  in the  Securities  Act of 1933  and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or controlling  person in the successful defense
of any action,  suit or  proceeding)  is asserted by such  director,  officer or
controlling person in connection with the securities being registered,  we will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities  Act of 1933 and will be governed by the final  adjudication  of such
issue.

ITEM 7.           EXEMPTION FROM REGISTRATION CLAIMED

         Persons eligible to receive grants under the Plan will have an existing
relationship with us and will have access to comprehensive  information about us
to enable them to make an  informed  investment  decision.  The  recipient  must
express an investment intent and, in the absence of registration  under the Act,
consent  to the  imprinting  of a legend  on the  securities  restricting  their
transferability except in compliance with applicable securities laws.

                                      II-2
ITEM 8. EXHIBITS

5.1      Opinion of Schneider Weinberger, LLP*
10.1     TMI Holdings, Inc. 2003 Qualified Securities Plan*
10.2     TMI Holdings, Inc. 2003 Non-Qualified Securities Plan*
23.1     Consent of Independent Auditors*
23.2     Consent of Schneider Weinberger, LLP (included in the above opinion)

--------------------
*        Filed herewith.

ITEM 9. UNDERTAKINGS

     The undersigned registrant hereby undertakes:

     (1)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (a)  To include any  prospectus  required  by section  10(a)(3) of the
               Securities Act of 1933;

          (b)  To reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  registration  statement (or the most
               recent post-effective  amendment thereof) which,  individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   registration    statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in volume  and price  represent  no more than a 20%
               change in the maximum  aggregate  offering price set forth in the
               "Calculation  of   Registration   Fee"  table  in  the  effective
               registration statement;

          (c)  To include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  registration
               statement  or any  material  change  to such  information  in the
               registration statement;

         Provided,  however,  that paragraphs (1)(i) and (1)(ii) do not apply if
the  registration  statement  is on  Form  S-3 or Form  S-8 and the  information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic reports filed by the registrant  pursuant to section 13 or
section 15(d) of the Securities  Exchange Act of 1934 that are  incorporated  by
reference in the registration statement.

         (2)      That, for the purpose of determining  any liability  under the
                  Securities  Act of 1933,  each such  post-effective  amendment

                                      II-3
shall be deemed to be a new registration statement relating to
                  the  securities  offered  therein,  and the  offering  of such
                  securities at that time shall be deemed to be the initial bona
                  fide offering thereof.

         (3)      To  remove  from  registration  by means  of a  post-effective
                  amendment any of the securities  being registered which remain
                  unsold at the termination of the offering.

         The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to section  13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission  such  indemnification  is against  public policy as expressed in the
Securities Act of 1933 against such  liabilities  (other than the payment by the
registrant  in the  successful  defense of an  action,  suit or  proceeding)  is
asserted by such director,  officer or controlling person in connection with the
securities being  registered,  the registrant will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent, submit to a court
of appropriate  jurisdiction the question whether such  indemnification by it is
against  public  policy as expressed in the  Securities  Act of 1933 and will be
governed by the final adjudication of such issue.

                                      II-4
SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Wellington, State of Florida, on July 1, 2003.

                                   TMI HOLDINGS, INC.

                                   By: /s/ Scott Siegel
                                      ------------------------------------
                                       Scott Siegel, CEO and
                                       Principal Executive Officer

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.

    Signature                        Title                           Date

                           Chairman of the Board,
                           CEO, President and
/s/ Scott Siegel           Principal Executive, Financial          July 1, 2003
----------------------
Scott Siegel               and Accounting Officer

/s/ Neil Dolgin            Director                                July 1, 2003
----------------------