<PAGE>   1
                                   FORM 10-QSB

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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


For the quarterly period ended   JUNE 28, 1998

                                       OR

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

For the transition period from ____________  to ______________

Commission File No. 333-5190-A

                             THRIFT MANAGEMENT, INC.
                             -----------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

FLORIDA                                           65-0309540
-------                                           ----------
State or Other Jurisdiction of               I.R.S. Employer I.D. No.
Incorporation or Organization

3141 W. Hallandale Beach Boulevard
    Hallandale, Florida  33009
----------------------------------
(Address of Principal Executive Offices)

Issuer's telephone number, including area code:         954-985-8430
                                                     ------------------

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

          YES X     /       NO
             ---              ---


State the number of shares outstanding of each of the Issuer's classes of common
equity as of the latest practical date: At August 10, 1998, there were
outstanding 2,175,000 shares of Common Stock, $.01 par value.

Transitional Small Business Disclosure Format:     YES         /   NO  X
                                                      ---             ---


<PAGE>   2



                             THRIFT MANAGEMENT, INC.
                                AND SUBSIDIARIES


                              INDEX TO FORM 10-QSB

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
                                                                                                   Page
                                                                                                 -------
<S>                                                                                                 <C>
Item 1.  Financial Statements

Consolidated Balance Sheet as of June 28, 1998 (unaudited).....................................     3


Consolidated Statements of Operations for the Three Months and the Six Months
Ended June 28, 1998 and June 30, 1997 (unaudited)..............................................     4



Consolidated Statements of Cash Flows for the Six Months ended June 28, 1998
and June 30, 1997 (unaudited)..................................................................     5


Notes to Consolidated Financial Statements (unaudited).........................................     6-7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.............................................................     8-11

PART II - OTHER INFORMATION

Item 2.  Changes in Securities.................................................................     11
Item 5.  Other Information.....................................................................     11
Item 6.  Exhibits and Reports on Form 8-K......................................................     11

Signatures.....................................................................................     12
</TABLE>







                                        2


<PAGE>   3

                   THRIFT MANAGEMENT, INC. AND SUBSIDIARIES 

                           CONSOLIDATED BALANCE SHEET

                                  (UNAUDITED)
                                                               JUNE 28, 1998
                                                              ---------------
ASSETS

CURRENT ASSETS
     Cash and cash equivalents                                  $ 1,872,790
     Merchandise inventories                                        343,976
     Prepaid expenses                                               321,588
     Advances to stockholder                                         63,156
                                                                -----------

          TOTAL CURRENT ASSETS                                    2,601,510

EQUIPMENT, FIXTURES AND IMPROVEMENTS, net                           587,536

ADVANCES TO STOCKHOLDER                                              31,578

PREPAID CONSULTING SERVICES                                          12,500

COVENANTS NOT TO COMPETE, net                                        24,094

DEFERRED TAX ASSETS                                                  16,800

PREPAID INCOME TAXES                                                 56,972

OTHER ASSETS                                                         86,121
                                                                -----------
          TOTAL ASSETS                                          $ 3,417,111
                                                                ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                               189,715
     Accrued expenses                                               200,575
                                                                -----------

          TOTAL CURRENT LIABILITIES                                 390,290

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock: $.01 par value, authorized 1,500,000
          shares, issued and outstanding 250,000 shares               2,500
     Common stock: $.01 par value, authorized 15,000,000
          shares, issued and outstanding 2,175,000 shares            21,750
     Additional paid-in capital                                   3,082,341
     Accumulated deficit                                            (79,770)
                                                                -----------

          TOTAL STOCKHOLDERS' EQUITY                              3,026,821
                                                                -----------

          TOTAL LIABILITIES AND
               STOCKHOLDERS' EQUITY                             $ 3,417,111
                                                                ===========

See accompanying notes to consolidated financial statements.

                                       3

<PAGE>   4

                    THRIFT MANAGEMENT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDING                SIX MONTHS ENDING
                                        ---------------------------------   ---------------------------------
                                         JUNE 28, 1998     JUNE 30, 1997     JUNE 28, 1998     JUNE 30, 1997
                                        --------------    ---------------   --------------    ---------------
<S>                                       <C>               <C>               <C>               <C>        
Net sales                                 $ 2,150,732       $ 1,840,298       $ 4,401,205       $ 3,660,848

Cost of goods sold                          1,379,747           899,473         2,620,297         1,747,849
                                          -----------       -----------       -----------       -----------

GROSS PROFIT                                  770,985           940,825         1,780,908         1,912,999

Selling, general and administrative
     expenses                                 962,989           880,134         1,839,821         1,711,125
Officer's bonus incentive                      21,521            18,403            44,022            36,609
                                          -----------       -----------       -----------       -----------

          TOTAL OPERATING EXPENSES            984,510           898,537         1,883,843         1,747,734
                                          -----------       -----------       -----------       -----------

          INCOME FROM OPERATIONS             (213,525)           42,288          (102,935)          165,265

Interest expense                                   72               447               308               801
Interest income                               (27,396)          (25,143)          (58,629)          (41,521)
                                          -----------       -----------       -----------       -----------

          INCOME BEFORE INCOME
               TAX (BENEFIT) EXPENSE         (186,201)           66,984           (44,614)          205,985

Income tax (benefit) expense                  (70,372)           33,700           (16,788)          104,700
                                          -----------       -----------       -----------       -----------

          NET (LOSS) INCOME               $  (115,829)      $    33,284       $   (27,826)      $   101,285
                                          ===========       ===========       ===========       ===========

 (Loss) Earnings per share:
      Basic:
           Net (loss) income              $     (0.05)      $      0.02       $     (0.01)      $      0.05
                                          ===========       ===========       ===========       ===========
      Diluted:
           Net (loss) income              $     (0.05)      $      0.02       $     (0.01)      $      0.05
                                          ===========       ===========       ===========       ===========
 Weighted average number of shares
      Basic                                 2,155,000         2,125,000         2,150,000         2,125,000
                                          ===========       ===========       ===========       ===========

      Diluted                               2,201,500         2,125,000         2,196,500         2,125,000
                                          ===========       ===========       ===========       ===========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       4

<PAGE>   5

                    THRIFT MANAGEMENT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          SIX MONTHS ENDING
                                                                   --------------------------------
                                                                    JUNE 28, 1998    JUNE 30, 1997
                                                                   ---------------  ---------------
<S>                                                                 <C>               <C>        
Cash flows from operating activities:
     Net (loss) Income                                              $   (27,826)      $   101,285
     Adjustments to reconcile net income to
          net cash (used in) provided by operating activities:
               Depreciation and amortization                             45,245            44,477
               Loss (Gain) on sale of equipment                           3,505            (1,684)
               Payment of consulting expense with common stock           30,375            52,500
               Deferred income tax (benefit) expense                    (16,800)           33,000
               (Increase) in merchandise inventories                    (15,542)         (117,932)
               (Increase) in prepaid expenses                          (169,263)           (5,760)
               (Increase) in prepaid income taxes                       (56,972)             --
               Increase (decrease) in accounts payable                   47,824           (95,885)
               (Decrease) increase in accrued expenses                   (7,016)           52,803
               (Decrease) increase in accrued income taxes              (28,016)           12,700
                                                                    -----------       -----------

                    Total adjustments                                  (166,660)          (25,781)
                                                                    -----------       -----------

NET CASH USED IN OPERATING ACTIVITIES                                  (194,486)           75,504
                                                                    -----------       -----------

Cash flows from investing activities:
     Purchase of property and equipment                                (157,124)         (255,546)
     Proceeds from disposal of property and equipment                        --            38,038
                                                                    -----------       -----------

NET CASH USED IN INVESTING ACTIVITIES                                  (157,124)         (217,508)
                                                                    -----------       -----------

Cash flows from financing activities:
     Advances to stockholder, net                                        31,578          (176,962)
     Principal payments on notes payable                                 (9,717)          (35,233)
                                                                    -----------       -----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                      21,861          (212,195)
                                                                    -----------       -----------


                NET (DECREASE) IN CASH                                 (329,749)         (354,199)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                       2,202,539         2,570,188
                                                                    -----------       -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                           $ 1,872,790       $ 2,215,989
                                                                    ===========       ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
     INFORMATION:

          Cash paid during the period for:
               Interest                                             $       308       $       801
                                                                    ===========       ===========

               Income taxes                                         $    80,000       $        --
                                                                    ===========       ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                        5

<PAGE>   6


                             THRIFT MANAGEMENT, INC.
                                AND SUBSIDIARIES

                              NOTES TO CONSOLIDATED
                        FINANCIAL STATEMENTS (UNAUDITED)

(1)  BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements have been
     prepared in accordance with the instructions to Form 10-QSB and do not
     include all of the information and footnotes required by generally accepted
     accounting principles for complete financial statements. However, such
     information reflects all adjustments (consisting solely of normal recurring
     adjustments), which are, in the opinion of management, necessary for a fair
     statement of results for the interim periods.

     The results of operations for the six months ended June 28, 1998 are not
     necessarily indicative of the results to be expected for the full year.

     These statements should be read in conjunction with the consolidated
     financial statements and notes thereto included in the Form 10-KSB for the
     year ended December 31, 1997 of Thrift Management, Inc. (the "Company").

(2)  ORGANIZATION

     The consolidated financial statements at June 28, 1998 and June 30, 1997
     include the accounts of the Company, Hallandale Thrift Management, Inc.
     ("HTMI"), Thrift Shops of South Broward, Inc. ("TSSB"), Thrift Shops of
     West Dade, Inc. ("TSWD"), Hallandale Thrift, Inc. ("HTI"), North Broward
     Consignment, Inc. ("NBCI"), Thrift Shops of North Lauderdale, Inc.
     ("TSNL"), Thrift Retail, Inc. ("TRI"), and Thrift Management Canada, Inc.
     ("TMCI"), (HTMI, TSSB, TSWD, HTI, NBCI, TSNL, TRI and TMCI are collectively
     referred to herein as the "Subsidiaries"). All entities, except TSNL, TRI
     and TMCI (which were incorporated in March 1997, January 1998 and June 1998
     respectively), were wholly owned by a common stockholder until May 31,
     1996. As of May 31, 1996, HTMI, TSSB, TSWD, HTI, and NBCI became wholly
     owned subsidiaries of the Company pursuant to a reorganization plan.
     Accordingly, as of June 28, 1998 and June 30, 1997 and for the periods then
     ended, the Company has presented consolidated financial statements. All
     significant intercompany accounts and transactions have been eliminated for
     financial statement presentation purposes.

(3)  STOCKHOLDERS' EQUITY

     In December 1996, the Company consummated its initial public offering in
     which it sold 615,000 units at a price of $5.75 per unit. Each unit
     consisted of one share of common stock ("Common Stock") and one warrant to
     purchase one share of Common Stock for $5.00 per share. The warrants are
     exercisable for a period of five years commencing December 11, 1996 and may
     be redeemed by the Company on 30 days' notice at any time during such
     period at a price of $.10 per warrant if the closing bid price of the
     Common Stock for 20 consecutive trading days ending on the fifteenth day
     prior to the date that notice of redemption was given by the Company has
     been at least 150% of the exercise price then in effect. The Company
     realized approximately $2,596,950 in proceeds from the offering, net of
     underwriting discounts and expenses and other offering expenses.
     Simultaneously with the offering, the Company charged all offering costs
     incurred to additional paid-in capital, which costs totaled $653,050.




                                       6

<PAGE>   7

     On June 17, 1997, the Company issued 30,000 shares of its restricted Common
     Stock to a business consultant in payment for service rendered to the
     Company. Such restricted Common Stock was initially valued at $52,500 which
     was later revised to $33,500. On June 15, 1998, the Company issued an
     additional 30,000 shares of its restricted Common Stock to a business
     consultant. Such restricted Common Stock was valued at $30,375.

(4)  CHANGE IN ACCOUNTING PERIODS

     The Company adopted a 52/53 week retail reporting calendar, whereby all
     accounting periods end on a Sunday.

(5)  CASH AND CASH EQUIVALENTS

     At June 28, 1998, the Company had an investment in Federal Home Loan Bank
     notes, with a maturity date of July 24, 1998 and a value of $1,492,862, an
     investment in Dreyfus Treasury Prime Cash Management with a value of
     $258,295, and investments in various bank money market accounts with an
     aggregate value of $78,262.

     Prepaid expenses as of June 28, 1998 include $97,248 in prepaid salary and
     bonus payments to the Company's President. See Note (6) below.

(6)  COMMITMENTS

     In April 1998, the Company entered into a five-year lease for a sixth store
     location in Pompano Beach in Broward County, Florida. The lease provides
     for minimum monthly rental payments of approximately $4,000 and contains
     two renewal options for five years under substantially the same terms and
     conditions. This store is scheduled to open on August 14, 1998.

     As part of the program of operating manned donation trailers as a new
     source of donated merchandise, the Company has entered into month to month
     rental agreements to rent space in parking lots of certain shopping
     centers. As of June 28, 1998, the Company had entered into seven such
     agreements with monthly rental payments totaling approximately $1,200.

     The Company's Board of Directors approved the prepayment of up to $130,000
     of the 1998 salary and bonus of the Company's President, subject to the
     agreement of the President to pay interest on the amount prepaid at the
     annual rate of 8.5%. Prepaid expenses as of June 28, 1998 include $97,248
     in such prepaid salary and bonus payments to the Company's President.





















                                       7
<PAGE>   8

                             THRIFT MANAGEMENT, INC.
                                AND SUBSIDIARIES

ITEM 2

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

The following is an analysis of the results of operations of Thrift Management,
Inc. and Subsidiaries (collectively, the "Company") and its liquidity and
capital resources. The Company cautions readers that certain important factors
may affect the Company's actual results and could cause such results to differ
materially from any forward-looking statements that may be deemed to have been
made in this Report or that are otherwise made by or on behalf of the Company.
For this purpose, any statements contained in this Report that are not
statements of historical fact may be deemed to be forward-looking statements
which involve risks and uncertainties. Without limiting the generality of the
foregoing, words such as "may," "expect," "believe," "anticipate," "intend,"
"could," "estimate," or "continue" or the negative or other variations thereof
or comparable terminology are intended to identify forward-looking statements.
These risks include: risks of increases in the costs of the Company's
merchandise and the continued availability of suitable merchandise; the
Company's relationship with its suppliers, licensors and contributors; changes
in preferences of customers; competitive and general economic factors in the
markets where the Company sells and collects goods; the impact of and changes in
government regulations such as restrictions or prohibitions relating to the
contribution of charitable goods; and other factors discussed herein or from
time to time in the Company's filings with the Securities and Exchange
Commission.

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and the related notes thereto of the
Company included elsewhere herein.

GENERAL

The Company was organized in July, 1991 for the purpose of managing the
operation of retail thrift stores that offer new and used articles of clothing,
furniture, miscellaneous household items and antiques. HTMI is registered with
the State of Florida as a professional solicitor. The Company obtains its
merchandise primarily from two sources: (i) purchase contracts with charitable
organizations in return for an average of 2% - 3% of the Company's gross sales;
and (ii) various independent contract collectors from whom the Company purchases
merchandise in bulk.

Items from the stores that remain unsold are sold in bulk to exporters, which
ship the items to countries throughout the Caribbean, Central and South America,
and Eastern Europe. Through its subsidiaries, the Company currently operates
five retail stores and is scheduled to open its sixth store on August 14, 1998.
HTMI is responsible for the solicitation of donations on behalf of the charities
through direct mailings, newspaper advertising and telemarketing. HTMI is, in
addition, responsible for the pickup of the donated merchandise throughout the
communities surrounding the Company's stores.

In January, 1998 the Company adopted a 52/53 week retail reporting calendar,
whereby all accounting periods end on a Sunday.







                                       8


<PAGE>   9

RESULTS OF OPERATIONS - FOR THE THREE MONTHS ENDED JUNE 28, 1998 AND JUNE 30,
1997.

Revenues for the second quarter ended June 28, 1998 and June 30, 1997 totaled
$2,150,732 and $1,840,298, respectively. Sales increased $310,434 or 16.9% for
the 1998 quarter as compared to the 1997 quarter. The sales increase resulted
primarily from the opening of the Company's fifth store in Lauderdale Lakes,
Florida on July 19, 1997. The same-store sales for the quarter were flat.

Economic and political conditions in the overseas markets that purchase rags
have further deteriorated, with the result that the Company is now selling rags
for approximately $0.13 per pound as compared to approximately $0.14 per pound
in the first quarter of 1998 and approximately $0.20 per pound in 1997. The rag
sale prices have continued to fall, and in August 1998 the Company is selling
rags for only $.07 per pound. Although in the past rag sale prices have
strengthened in the fall and winter months, there can be no assurances that this
will be the case this year. This very significant decline in the market price
for rags represented a 4.5% unfavorable variance in total sales compared to the
second quarter of the prior year.

The Company's gross profit for the second quarter of 1998 decreased $169,840 or
18.1% to $770,985 from $940,825 for the second quarter of 1997. This decrease in
gross profit dollars and the gross profit margin from 51.1% in the second
quarter of 1997 to 35.8% in the second quarter of 1998 is attributable to the
significant increase in the cost of goods sold, which was due primarily to the
increasing dependence on merchandise purchased from independent contract
collectors combined with the collapse of the export market for rags. The decline
in export prices for rags represents 29% of the decline in the Company's gross
profit margin.

Cost of goods sold, as a percentage of sales, increased 15.3% points for the
second quarter of 1998 as compared to the second quarter of 1997 to 64.2% in
1998 from 48.9% in 1997. The Company has two sources for merchandise: purchase
contracts with charitable organizations and merchandise purchased in bulk from
independent contract collectors. In order to support the 16.9% increase in store
sales, while also acquiring merchandise for the Company's sixth store (which is
planned to open on August 14, 1998), the Company increased its purchases of
merchandise from independent contract collectors. The Company's purchases from
independent contract collectors for the second quarter of 1998 increased 39.8%
compared to the prior year. More merchandise is now being acquired and is being
purchased from independent contract collectors in other states, requiring
additional freight costs than in 1997. These additional costs resulting from the
Company's greater reliance on purchased goods is one of the primary factors
resulting in a higher cost of goods sold. The decline in the market price for
rags is the second primary factor in the decline in the gross profit margin in
the second quarter.

Operating expenses for the second quarter of 1998 increased $86,973 or 9.7% to
$984,510 from $898,537 for the second quarter of 1997. This increase is due
primarily to the $116,023 in operating expenses related to the Company's fifth
store in Lauderdale Lakes, Florida, which opened on July 19, 1997.















                                       9

<PAGE>   10


RESULTS OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 28, 1998 AND JUNE 30,
1997

Revenues for the six months ended June 28, 1998 and June 30,1997 totaled
$4,401,205 and $3,660,848, respectively. Sales increased $740,357 or 20.2% for
the 1998 six month period compared to the 1997 six month period. The sales
increase resulted primarily from the opening of the Company's fifth store in
Lauderdale Lakes, Florida on July 19, 1997. The same-store sales for the six
months increased by 3.2%. The Company's adoption of a 52/53 week reporting
calendar resulted in the six months of 1998 having two days less than the six
months of 1997. If the sales for those two days were added to the six months of
1998, the total sales would have increased 21.1% and the same-store sales would
have increased 4.0%.

Economic and political conditions in those overseas markets that purchase rags
have further deteriorated, with the Company selling rags for approximately $0.14
per pound in the first quarter of 1998 and approximately $.13 per pound in the
second quarter of 1998 as compared to approximately $0.20 per pound in 1997. The
rag sale prices have continued to fall, and in August 1998 the Company is
selling rags for only $.07 per pound. This significant decline in the market
price for rags represented a 3.9% unfavorable variance in total sales compared
to the six months of the prior year.

The Company's gross profit for the six months of 1998 decreased $132,091 or 6.9%
to $1,780,908 from $1,912,999 for the six months of 1997. This decrease in the
gross profit dollars and the gross profit margin from 52.3% in the six months of
1997 as compared to 40.5% in same period of 1998 is attributable to the
significant increase in the cost of goods sold which was due primarily to the
increasing dependence on merchandise purchased from independent contract
collectors combined with the collapse of the export market for rags. The decline
in export prices for rags represent 33% of the decline in the Company's gross
profit margin. The Company is reviewing and plans to adjust its operational
strategy in an attempt to lessen the gross profit impact of the current rag
market prices.

Cost of goods sold, as a percentage of sales, increased 11.8% points for the six
months of 1998 as compared to the six months of 1997 to 59.5% in 1998 from 47.7%
in 1997. The Company has two sources for merchandise: direct donated goods
through the charities with which it has entered into purchase contracts, and
merchandise purchased in bulk from independent contract collectors. In order to
support the 20.2% increase in store sales, while also acquiring merchandise for
the Company's sixth store (which is planned to open on August 14, 1998), the
Company increased its purchases of merchandise from independent contract
collectors. The Company's purchases from independent contract collectors for the
six months of 1998 increased 36.2% compared to the prior year. More merchandise
being acquired is being purchased from sources in other states, requiring
additional freight costs than last year. These additional costs resulting from
the Company's greater reliance on purchased goods is one of the primary factors
resulting in a higher cost of goods sold. The impact of current market price for
rags is the second primary factor in the decline of the gross profit margins.

The Company is accelerating its efforts to reduce its dependence on purchased
merchandise by continuing to develop its network of manned donation trailers and
by establishing a phone solicitation division to increase the Company's sources
of donated merchandise.

Operating expenses for the six months of 1998 increased $136,108 or 7.8% to
$1,883,843 as compared to $1,747,734 for the same period in 1997. This increase
is primarily the result of the $116,023 increase of the operating expenses of
the Lauderdale Lakes store, which opened on July 19, 1997.
















                                       10
<PAGE>   11

LIQUIDITY AND CAPITAL RESOURCES

At June 28, 1998, the Company had working capital of $2,284,992, as compared to
working capital of $2,248,158 at June 30, 1997.

Cash and cash equivalents at June 28, 1998 totaled $1,872,790, a decrease of
$343,199, as compared with $2,215,989 at June 28, 1997. Net cash used in
operating activities totaled $194,486 for the six months ended March 28, 1998,
as compared to $75,504 provided by operating activities for the six months
ending June 30, 1997. The Company believes that its current capital resources,
together with the expected cash flow from its operations, will be sufficient to
meet its anticipated working capital requirements through at least 1998. There
can be no assurances, however, that such will be the case.

INFLATION AND SEASONALITY

Although the Company cannot accurately determine precisely the effects of
inflation, management does not believe that inflation currently has a material
effect on the Company's sales or results of operations.

The Company's operations are located in South Florida, which has numerous
part-time residents during the winter. The Company's results of operations
reflect the seasonable nature of this market, with donations and sales of
merchandise being higher in the winter months.

YEAR 2000

The Company has evaluated the potential impact of the year 2000 on its business,
including its information systems, and does not expect this issue to have a
significant effect on its results of operations.

PART II - OTHER INFORMATION

     Item 2 - Changes in Securities

         On June 15, 1998, the Company issued 30,000 shares of its restricted
         common stock to a consultant in payment for services rendered to the
         Company. Such restricted common stock was valued at $30,375.

         The foregoing shares of common stock were issued by the Company in
         reliance on the exemption from registration set forth in Section 4(2)
         of the Securities Act of 1933, as amended, as it was a transaction by
         the Company not involving a public offering.

     Item 5 - Other Information

         In August, the Company employed Jackie Halleen as a District Manager.
         Mrs. Halleen has over 8 years experience in the thrift industry and was
         most recently a District Manager in the Minnesota/Wisconsin area for
         TVI. Inc., which operates over 160 retail thrift stores.

         In August, the Company also employed Phillip Halleen as Purchasing
         Agent and Planning and Development Coordinator. Mr. Halleen has 5 years
         of experience in the thrift industry and was most recently employed by
         TVI, Inc. in their midwest new store development department.

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits:

              Exhibit Number           Description
              --------------           -----------

                   11.1                Statement re: computation of per share
                                       earnings

                   27.1                Financial Data Schedule (for SEC use
                                       only)

         (b)   Reports on Form 8-K

               NONE





                                       11
<PAGE>   12

SIGNATURE

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                 THRIFT MANAGEMENT, INC.



                                 BY: /s/ MARC DOUGLAS
                                     -----------------------------------
                                     Marc Douglas, President and Chief Executive
                                     Officer (Principal Executive Officer)

Date:  August 10, 1998

                                     /s/ STEPHEN L. WILEY
                                     -----------------------------------
                                     Stephen L. Wiley, Chief Financial
                                     Officer (Principal Financial Officer)


































                                       12