<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[ X ]             Quarterly report pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For the quarterly period ended November 30, 1997

[   ]             Transition report pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For the transition period from            to

Commission file number:  000-24452

                                RMS TITANIC, INC.
             (Exact name of registrant as specified in its charter)


            Florida                             59-2753162
(State or other jurisdiction of                 (IRS Employer Identification No.
incorporation or organization)

17 Battery Place, Suite 203, New York, NY       10004
(Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code: (212) 558-6300


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X

         The number of shares outstanding of the registrant's common stock on
January 16, 1998 was 16,192,119.
<PAGE>   2
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          NUMBER
                                                                          ------
<S>                                                                       <C>
                                     PART I

                              FINANCIAL INFORMATION

Item 1.           Financial Statements                                         3

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                9

                                     PART II

                                OTHER INFORMATION

Item 1.           Legal Proceedings                                           14

Item 2.           Changes in Securities                                       14

Item 3.           Defaults Upon Senior Securities                             14

Item 4.           Submission of Matters to a Vote of Security Holders         14

Item 5.           Other Information                                           15

Item 6.           Exhibits and Reports on Form 8-K                            15

Signatures                                                                    15
</TABLE>




                                        2
<PAGE>   3
                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS.

         The financial statements of RMS Titanic, Inc. (the "Company"), formerly
First Response Medical, Inc. ("FRM") included herein were prepared, without
audit, pursuant to rules and regulations of the Securities and Exchange
Commission. The Financial Statements include the assets acquired and liabilities
assumed from Titanic Ventures Limited Partnership ("TVLP") on May 4, 1993 (the
"Acquisition"). Since TVLP owns a controlling interest in FRM after the
Acquisition, the transaction has been accounted for as a "reverse acquisition"
with TVLP deemed to be the acquiring entity. Because certain information and
notes normally included in financial statements prepared in accordance with
generally accepted accounting principles were condensed or omitted pursuant to
such rules and regulations, these financial statements should be read in
conjunction with the financial statements and notes thereto included in the
audited financial statements of the Company for the year ended February 28, 1997
as included in the Company's Form 8-K dated July 3, 1997.

         Except for historical information contained herein, this Quarterly
Report on Form 10-K contains forward-looking statements within the meaning of
the Private Securities Reform Act of 1995 which involve certain risks and
uncertainties. The Company's actual results or outcomes may differ materially
from those anticipated. Important facts that the Company believes might cause
such differences are discussed in the cautionary statements accompanying the
forward-looking statements in this report and in "Managements's Discussion and
Analysis of Financial Conditions and Operations" included as an exhibit to the
Company's Form 8-K dated July 3, 1997, in conjunction with which this Quarterly
Report on Form 10-Q should be read. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there
can be no assurance that the forward-looking statements contained in this
report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.



                                        3
<PAGE>   4

<TABLE>
<CAPTION>
                                                                                                     RMS TITANIC, INC.
                                                                                                         BALANCE SHEET
----------------------------------------------------------------------------------------------------------------------
                                                                                      NOVEMBER 30,         FEBRUARY 28,
                                                                                             1997                 1997
----------------------------------------------------------------------------------------------------------------------
                                                                                       (unaudited)

<S>                                                                                 <C>                  <C>          
ASSETS

Current Assets:
  Cash                                                                              $     786,416        $     105,854
  Accounts receivable                                                                     282,264               34,715
  Refundable withholding tax                                                                   --               87,500
  Other current assets                                                                         --                4,800
----------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT ASSETS                                                              1,068,680              232,869

Artifacts Recovered, at cost                                                            7,714,340            7,714,340

Deferred Income Tax Asset, net of valuation allowance of
 $1,273,000 and $1,910,000, respectively                                                       --                   --

Property and Equipment, net of accumulated depreciation
 of $56,327 and $50,036, respectively                                                      16,673               19,564

Other Assets                                                                               38,881               38,611
----------------------------------------------------------------------------------------------------------------------
      TOTAL ASSETS                                                                   $  8,838,574         $  8,005,384
----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Note payable                                                                     $       25,682        $     128,530
  Accounts payable and accrued liabilities                                              2,340,939            3,093,448
  Deferred revenue                                                                        275,000              675,000
  Loans payable to partners                                                                45,000               45,000
----------------------------------------------------------------------------------------------------------------------
      TOTAL CURRENT LIABILITIES                                                         2,686,621            3,941,978
----------------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
  Common stock - $.0001 par value; authorized 30,000,000 shares,
   issued and outstanding 16,187,128 shares                                                 1,619                1,618
  Additional paid-in capital                                                           13,915,748           13,909,999
  Accumulated deficit                                                                  (7,765,414)          (9,848,211)
----------------------------------------------------------------------------------------------------------------------
      STOCKHOLDERS' EQUITY                                                              6,151,953            4,063,406
----------------------------------------------------------------------------------------------------------------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $  8,838,574         $  8,005,384
======================================================================================================================
</TABLE>

                                               See Notes to Financial Statements


                                       4
<PAGE>   5
<TABLE>
<CAPTION>
                                                                                                         RMS TITANIC, INC.

                                                                                                   STATEMENT OF OPERATIONS
                                                                                                               (UNAUDITED)
--------------------------------------------------------------------------------------------------------------------------
                                           THREE-MONTH PERIOD   THREE-MONTH PERIOD   NINE-MONTH PERIOD   NINE-MONTH PERIOD
                                            ENDED NOVEMBER 30,   ENDED NOVEMBER 30,  ENDED NOVEMBER 30,  ENDED NOVEMBER 30,
                                                         1997                 1996                1997                1996
--------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                 <C>                 <C>                 <C>         
Revenue:
  Licensing fees                                 $     91,888                  --        $     97,196        $    860,000
  Exhibitions                                       1,283,131        $     14,916           2,721,335              14,916
  Merchandise and other                                17,005               4,888              60,997              12,794
  Sponsorship fees                                         --                  --                  --             150,000
  Sale of coal                                          7,257              18,657              20,243              84,753
-------------------------------------------------------------------------------------------------------------------------
Total revenue                                       1,399,281              38,461           2,899,771           1,122,463
-------------------------------------------------------------------------------------------------------------------------
Expenses:
  General and administrative                          214,701             262,160             875,526             821,896
  Depreciation and amortization                         2,069               2,070               6,291               6,214
-------------------------------------------------------------------------------------------------------------------------
Total expenses                                        216,770             264,230             881,817             828,110
-------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations                       1,182,511            (225,769)          2,017,954             294,353
-------------------------------------------------------------------------------------------------------------------------
Other income (expense):
  Interest income                                       3,263                  --               3,263                  --
  Financing fees                                       (5,750)                 --              (5,750)                 --
  Other                                                29,730                  --              67,330                  --
-------------------------------------------------------------------------------------------------------------------------
Other income (expense) - net                           27,243                  --              64,843                  --
-------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                $  1,209,754        $   (225,769)       $  2,082,797        $    294,353
=========================================================================================================================
Net income (loss) per common share               $        .07        $       (.01)       $        .13        $        .02
=========================================================================================================================
Weighted average common shares outstanding         16,183,831          16,137,128          16,180,146          16,137,128
=========================================================================================================================
</TABLE>

                                               See Notes to Financial Statements


                                       5
<PAGE>   6
<TABLE>
<CAPTION>
                                                                                                    RMS TITANIC, INC.

                                                                                              STATEMENT OF CASH FLOWS
                                                                                                          (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------
                                                                                       NINE-MONTH           NINE-MONTH
                                                                                     PERIOD ENDED         PERIOD ENDED
                                                                                      NOVEMBER 30,         NOVEMBER 30,
                                                                                             1997                 1996
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                    <C>      
Cash flows from operating activities:
  Net income                                                                          $ 2,082,797            $ 294,353
----------------------------------------------------------------------------------------------------------------------
  Adjustments to reconcile net income to net cash provided by operating
   activities:
    Depreciation and amortization                                                           6,291                6,214
    Reduction in artifacts recovered                                                           --                7,641
    Rights granted in satisfaction of accrued liability                                   (60,000)                  --
    Amortization of deferred revenue                                                   (1,205,000)                  --
    Financing fees                                                                          5,750                   --
    Changes in operating assets and liabilities:
       Increase in accounts receivable                                                    (97,549)             (11,098)
       Decrease (increase) in refundable withholding tax                                   87,500              (87,500)
       Decrease (increase) in other current assets                                          4,800               (4,372)
       Increase in other assets                                                              (270)             -
       (Decrease) increase in accounts payable and accrued liabilities                   (692,509)              37,761
       Increase in deferred revenue                                                       655,000              550,000
----------------------------------------------------------------------------------------------------------------------
          TOTAL ADJUSTMENTS                                                            (1,295,987)             498,646
----------------------------------------------------------------------------------------------------------------------
          NET CASH PROVIDED BY OPERATING ACTIVITIES                                       786,810              792,999
----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Artifact recovery costs, including related deposits                                          --             (820,000)
  Purchases of property and equipment                                                      (3,400)              (2,085)
----------------------------------------------------------------------------------------------------------------------
          CASH USED IN INVESTING ACTIVITIES                                                (3,400)            (822,085)
----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activity - repayment of notes payable                          (102,848)                  --
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                                           680,562              (29,086)

Cash at beginning of period                                                               105,854               43,803
----------------------------------------------------------------------------------------------------------------------
Cash at end of period                                                                $    786,416           $   14,717
======================================================================================================================
</TABLE>


                                               See Notes to Financial Statements

                                       6
<PAGE>   7
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


Note 1 -          The accompanying financial statements contain all adjustments
                  necessary to present fairly the financial position of the
                  Company as of November 30, 1997 and its results of operations
                  and its cash flows for the three and nine months ended
                  November 30, 1997 and 1996, respectively. Results of
                  operations for the three and nine month periods ended November
                  30, 1997 are not necessarily indicative of the results that
                  may be expected for the year ending February 28, 1998. During
                  the fiscal quarter ended May 31, 1997 and all prior periods,
                  the Company was considered to be in the development stage for
                  financial reporting purposes.

Note 2 -          Net income per share on common stock is based upon the
                  weighted average number of shares outstanding. The dilutive
                  effect of common stock equivalents is not material. For the
                  calculation of the net loss per share on common stock for the
                  three months ended November 30, 1996, options and warrants to
                  purchase common stock have been excluded from the computation
                  of weighted average shares outstanding since their inclusion
                  would have an anti-dilutive effect.

Note 3 -          In April 1996, the Company entered into an agreement with CRE-
                  CO Finanz GmbH, a German company, for an exhibition of Titanic
                  artifacts in Europe from May 8, 1997 to November 8, 1997. In
                  October 1997, the agreement was amended and the exhibition was
                  extended through January 31, 1998. Pursuant to the agreement,
                  as amended, the Company will receive two-thirds of the net
                  profits, as defined, after the recoupment of certain project
                  expenses aggregating approximately $2,700,000, as defined.
                  Additionally, the Company received guaranteed exhibition fees
                  attributable to the initial term of the exhibition of $460,000
                  as a non-refundable advance against its share of the net
                  profits, as defined. The Company recognized such guaranteed
                  fees ratably over the initial term of the exhibition, and 
                  accordingly recognized $153,332 and $460,000 of such fees 
                  during the three and nine months ended November 30, 1997, 
                  respectively.

                  In August 1996, the Company entered into an agreement with the
                  City of Memphis, Tennessee, for an exhibition of Titanic
                  artifacts in Memphis, Tennessee from April 3, 1997 to
                  September 30,



                                        7
<PAGE>   8
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


                  1997. Pursuant to the agreement, as amended, the Company
                  received guaranteed exhibition fees of $720,000 in
                  installments between September 1996 and August 1, 1997, and
                  will receive 65% of the net profits, as defined, derived from
                  ticket, merchandise and sponsorship revenue in excess of
                  $5,000,000. The Company recognized such guaranteed exhibition
                  fees ratably over the term of the exhibition, and accordingly
                  recognized $120,000 and $720,000 of such fees during the three
                  and nine months ended November 30, 1997, respectively. The
                  Company earned $947,051 and $1,339,298 of revenue from the
                  exhibition during the three and nine months ended November 30,
                  1997, respectively, in excess of the guaranteed fees.

                  In October 1996, the Company entered into an agreement with
                  the National Maritime Center ("Nauticus"), a political
                  subdivision of the City of Norfolk, Virginia, for an
                  exhibition of Titanic artifacts at Nauticus from November 27,
                  1996 through March 31, 1997. Pursuant to the agreement, the
                  Company received one-third of revenues from the sale of the
                  first 150,000 tickets, as defined. In addition, the Company
                  received fifty (50%) percent of net profits, as defined, from
                  the sale of merchandise at the exhibition. The Company earned
                  $60,653 of revenue from the exhibition during the nine months
                  ended November 30, 1997.

                  In December 1996, the Company entered into an agreement with
                  Florida International Museum, Inc. for an exhibition of
                  Titanic artifacts in St. Petersburg, Florida, from November
                  15, 1997 to May 15, 1998. Pursuant to the agreement, the
                  Company will receive exhibition revenue from attendance fees
                  ranging from $0.34 to $3.10 per attendee, based upon the total
                  number of attendees during the exhibition term ("Attendance
                  Fee"). In addition, the Company will receive 10% of gross
                  revenue, as defined, from the sale of merchandise at the
                  exhibition ("Gift Shop Fee"). The minimum combined Attendance
                  Fee and Gift Shop Fee payable to the Company under the terms
                  of the agreement is $300,000. As of November 30, 1997,
                  $150,000 of such minimum payments have been received by the
                  Company. The remaining minimum fees of $150,000 have been
                  included in accounts receivable at November 30, 1997. The
                  Company is recognizing


                                        8
<PAGE>   9
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)



                  such minimum guaranteed fees ratably over the term of the
                  exhibition, and accordingly recognized $25,000 of such fees
                  during the three months ended November 30, 1997. The $275,000
                  balance of such minimum fees has been included in deferred
                  revenue in the accompanying balance sheet at November 30,
                  1997.

                  In May 1997, the Company entered into an agreement with the
                  RMS Foundation, Inc. for the exhibition of artifacts,
                  expedition equipment, photographs and film footage from the
                  1996 Titanic expedition aboard the Queen Mary in Long Beach,
                  California (the "Queen Mary") from June 1, 1997 through
                  January 5, 1998 (the "Initial Term"). In January 1998, the
                  agreement was amended and the exhibition was extended through
                  February 5, 1998 (the "Extension Term"). Pursuant to the Queen
                  Mary exhibition agreement, the Company will receive from the
                  sale up to 150,000 tickets, $2.00 per ticket during the
                  Initial Term and $2.50 per ticket during the Extension Term,
                  and $3.00 per ticket from the sale of more than 150,000
                  tickets. In addition, the Company will receive fifty (50%)
                  percent of net profits, as defined, from the sale of
                  merchandise at the Queen Mary exhibition, and fifty (50%) of
                  any sponsorship revenues. The Company earned revenue from the
                  exhibition of $37,748 and $116,384 for the three and nine
                  months ended November 30, 1997, respectively.

Note 4 -          The Company is a named defendant in a lawsuit commenced in the
                  United States District Court for the Southern District of New
                  York on or about December 16, 1997 (Lindsay v. The Wrecked and
                  Abandoned Vessel RMS Titanic, et al., in rem, and RMS Titanic,
                  Inc. et al., No. 97Civ9248). The plaintiff therein alleges,
                  inter alia, that he rendered certain services to the Company
                  in connection with its 1996 expedition to the Titanic wreck
                  site and in particular connection with the alleged production
                  of film , video and still images of the Titanic illuminated by
                  certain light towers. The relief sought includes an accounting
                  and a judgment declaring the plaintiff a co-salvor of the 1996
                  expedition and awarding him, in specie, the underwater, film,
                  video and still photographs allegedly obtained by plaintiff
                  from the use of the light towers. The plaintiff also seeks an
                  award of compensatory damages of up to approximately $500,000
                  and punitive damages in excess of


                                        9
<PAGE>   10
                  $2,000,000 based upon claims of breach of contract, fraudulent
                  misrepresentation, money lent, quantum meruit and conversion.
                  Management of the Company believes it has meritorious defenses
                  to these claims, intends to defend its position vigorously,
                  and to assert counterclaims seeking compensatory and punitive
                  damages against the plaintiff based upon, among other things,
                  claims that the plaintiff has wrongfully removed and retained
                  property owned by the Company, has wrongfully interfered with
                  the Company's contractual relations with third parties, and
                  has violated the Company's copyright to the images obtained
                  with the light towers. In connection with this action, the 
                  parties agreed that, without further order of the court,
                  coins and currency recovered from the Titanic located within
                  the Southern District of New York (the "District") as of 
                  December 18, 1997 will not be removed from the District, and
                  will not be sold, liened or otherwise encumbered. On the 
                  basis that the Company has no intention to remove, sell, 
                  lien or otherwise encumber these items, management of the 
                  Company believes that this agreement will have no material 
                  adverse affect upon the Company.  

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         The following discussion provides information to assist in the
understanding of the Company's financial condition and results of operations,
and should be read in conjunction with the financial statements and related
notes appearing elsewhere herein.

                              RESULTS OF OPERATIONS

FOR THE QUARTER ENDED NOVEMBER 30, 1997 VERSUS
THE QUARTER ENDED NOVEMBER 30, 1996

FOR THE NINE MONTHS ENDED NOVEMBER 30, 1997 VERSUS
THE NINE MONTHS ENDED NOVEMBER 30, 1996

         During the third quarter and the first nine months of its 1998 fiscal
year (the "1998 fiscal year"), the Company's revenues increased approximately
3,538% and 158% respectively, as compared to the third quarter and the first
nine months of its 1997 fiscal year (the "1997 fiscal year"). This increase was
principally attributable to the receipt of revenue from exhibitions of
$1,283,131 during the third quarter of the 1998 fiscal year and $2,721,335
during the first nine months of the 1998 fiscal year, as compared to revenues
from exhibitions of $14,916 during the third quarter and first nine months of
the 1997 fiscal year. The Company did not have any exhibition activities during
the first six months of its 1997 fiscal year. During the second quarter of the
1997 fiscal year and the first nine months of the 1997 fiscal year, the Company


                                       10
<PAGE>   11
received revenue of $1,010,000 from licensing and sponsorship fees related to
the Company's 1996 expedition to the wreck site of the Titanic, as compared to
$91,888 and $97,196 from licensing and sponsorship fees during the third quarter
and first nine months of the 1998 fiscal year. The Company did not conduct an
expedition to the wreck site of the Titanic during the 1998 fiscal year. Revenue
from merchandise increased approximately 248% and 377% during the third quarter
and first nine months of the 1998 fiscal year as compared to corresponding
periods of the 1997 fiscal year. Revenue from the sale of Titanic coal decreased
approximately 61% and 76% during the third quarter and first nine months of the
1998 fiscal year, as compared to third quarter and first nine months of the 1997
fiscal year, primarily due to a decrease in efforts to market the coal through
direct marketing channels during the first nine months of the 1998 fiscal year.
The Company's general and administrative expenses decreased approximately 18%
during the third quarter of its 1998 fiscal year as compared to the third
quarter of the 1997 fiscal year, principally as a result of a decrease of
approximately $50,000 in conservation expenses. The Company's general and
administrative expenses increased approximately 7% during the first nine months
of the 1998 fiscal year as compared to the corresponding period of the 1997
fiscal year, primarily as a result of the combination of an increase of
approximately $173,000 during the 1998 fiscal year for conservation expenses
incurred in connection with preparation of the Company's Titanic artifacts for
its Memphis and Hamburg exhibitions, and a decrease of approximately $75,000 in
the Company's legal fees.

                         LIQUIDITY AND CAPITAL RESOURCES

         Note payable as of November 30, 1997 represents the balance owed to LS
Capital Corporation, formerly Lone Star Casino Corporation ("LS Capital"),
pursuant to a promissory note executed in May 1993. As provided in a settlement
agreement to resolve legal proceedings to enforce such promissory note and
counterclaims and third-party claims asserted by the Company, the Company has
agreed to pay LS Capital $154,271.62 in twelve (12) equal monthly installments,
commencing January 15, 1997, subject to acceleration in the event that the
Company achieves certain levels of revenue during such period. The Company's
working capital commitments during its 1998 fiscal year also include lease
payments for principal offices in the base amount of $61,000 per annum, and
compensation to its executive officer. Additionally, the Company has agreed to
pay a financial consulting firm the sum of $3,000 per month for a period of one
year commencing April 15, 1997 for financial public relations services.

         In connection with its 1994 expedition to the wreck site of the
Titanic, the Company entered into an agreement with IFREMER to charter equipment
and crew necessary to conduct research and recovery efforts. Pursuant to the
terms of such charter agreement, the Company had paid IFREMER the sum of
$300,000 and was obligated to pay an additional $700,000 in two installments of
$350,000 each payable on September 30 and December 1, 1994. The installment due
to IFREMER on September 30, 1994 was paid during the first quarter of the
Company's 1996 fiscal year, payment of the final $350,000 installment was
extended to October 1, 1995. During the 1996 fiscal year, the Company paid
$70,000 on account of such obligation, with the $280,000 balance thereof having
been 

                                       11
<PAGE>   12
paid subsequent to February 29, 1996. The source of such $280,000 payment
was from an entity with which the Company entered into an agreement for the
marketing of coal and the sale of cabins of cruise ships which accompanied the
Company on its 1996 research and recovery expedition, and this payment was made
as an advance against the Company's share of profits from Titanic coal sales and
sales of such cruise ship cabins. The $280,000 advance was reduced by
approximately $94,154 from the sale of coal during the year ended February 28,
1997 and $7,237 during the nine months ended November 30, 1997, resulting in an
unpaid balance of $178,609 as of November 30, 1997. There were no profits from
sale of cruise ship cabins for the 1996 expedition.

         The Company entered into an agreement with IFREMER to charter equipment
and crew necessary to conduct a research and recovery expedition to the wreck
site of the Titanic in the Summer, 1996. Pursuant to the terms of such charter
agreement, the Company agreed to pay IFREMER 2,000,000 French francs
(approximately $400,000 U.S. Dollars) on or before June 20, 1996; 2,100,000
French francs (approximately $420,000 U.S. Dollars) on or before July 15, 1996;
and the sum of $980,000, payable as follows: (a) remittance of fifty (50%) of
the wholesale price of any products sold by the Company involving the 1996
expedition, up to a maximum of $480,000; and (b) up to a maximum of $500,000
payable from the following sources: (i) $.50 per visitor to any exhibition
organized by the Company; (ii) a lump sum of $250,000 from the Memphis
exhibition, payable prior to March 1, 1997; and (iii) one-third of the Company's
revenues received from any exhibition of artifacts organized by a third party,
as described. The agreement further provides that in the event the payments from
these sources do not amount to $980,000 within three (3) years after September
1, 1996, any remaining balance shall be paid from the Company's exhibition
revenues, as defined above. All objects recovered during the 1996 expedition
will be the subject of a lien granted to IFREMER until the Company pays all sums
due and owing to IFREMER for the 1996 expedition. In April 1997 the Company paid
IFREMER the sum of $125,000 on account of its 1996 expedition charter costs,
leaving a balance of $125,000 due from the lump sum of $250,000 from the Memphis
exhibition. Such $125,000 balance was paid in August 1997. In November 1997, the
Company paid IFREMER the additional sum of $250,000 against its obligations
under the charter agreement, reducing the balance owed thereunder to $480,000.
The Company is currently negotiating to restructure the payments of the
remaining balance due to IFREMER from revenues earned from its exhibitions.

         The Company entered into an agreement for a television production
whereby the Company granted certain rights to the production companies for the
production and exploitation of audio and visual recordings related to the 1996
expedition. The Company's obligations to make the June and July 1996 payments to
IFREMER aggregating $820,000 were paid as part of the television production
budget. The Company was obligated to contribute $100,000 to such production,
$40,000 of which was satisfied through the grant of certain rights to present
information and images concerning the 1996 expedition on the Internet, and the
balance of $60,000 of which was due from the Company on April 16, 1997. During
the third quarter ended November 30, 1997, the Company reached an agreement 


                                       12
<PAGE>   13
for
the satisfaction of such $60,000 balance in exchange for granting rights to
exploit additional audio and visual recordings relating to the 1996 expedition.
The Company has retained the rights for commercial exploitation of recordings
made at the Titanic wreck site in a print format and certain royalty and other
rights with respect to the sale of home videos based upon the 1996 expedition.
The Company has also granted to the television production companies a right of
first negotiation with respect to the Company's next expedition to the Titanic
wreck site.

         The Company's near term operating needs will be financed principally
from the distribution of revenues to the Company under its agreements for
exhibitions in Memphis, Tennessee; Hamburg, Germany; at the Queen Mary in Long
Beach, California; and in St. Petersburg, Florida. During the third quarter of
its 1998 fiscal year, the Company received revenues of $821,827 from the City
of Memphis, representing the Company's share of ticket, merchandising and
miscellaneous revenue collected by the Memphis exhibition for the period from
September 1, 1997 through September 30, 1997, when the Memphis exhibition
closed. Additionally, the City of Memphis owes the Company an additional
$125,224 for the Company's share of accounts receivable from the Memphis
exhibition as of September 30, 1997. The sum of $125,224 was unpaid as of
November 30, 1997. Based upon unaudited information, project expenses for the
Hamburg exhibition were recouped during the third quarter of the 1998 fiscal
year. The Company may be entitled to receive distribution of two-thirds of the
net profits from the Hamburg exhibition after recoupment of expenses and a
portion of the advance ($350,000) received prior  to November 30, 1997. The
Company is entitled to receive from the sale up to 150,000 tickets at the Queen
Mary exhibition, $2.00 per ticket sold through January 4, 1998 and $2.50 per
ticket sold from January 5, 1998, plus an amount equal to fifty (50%) of net
merchandising revenues, as defined. Pursuant to its agreement with the Florida
International Museum, the Company will receive exhibition revenue from
attendance fees ranging from $0.34 to $3.10 per attendee, based upon the total
number of attendees during the exhibition term (the "Attendance Fee"). In
addition, the Company may receive 10% of gross revenue, as defined, from the
sale of merchandise at the exhibition (the "Gift Shop Fee"). The minimum
combined Attendance Fee and Gift Shop Fee payable to the Company under terms of
the agreement is $300,000, of which $150,000 was received as of November 30,
1997. The balance of $150,000 is payable to the Company on or before May 15,
1998. Additionally, the Company may receive the sum of $250,000 on or before
January 31, 1998 in the event that CRE-CO Finanz GmbH exercises an option to
present an exhibition of the Company's Titanic artifacts in Europe is
exercised. The Company is actively negotiating for the presentation of an
exhibition of its Titanic artifacts in venues after its current exhibitions
close. While management expects these negotiations to be successfully
consummated, no assurances can be given that the Company will be successful in
effectuating such arrangements on terms that are acceptable or satisfactory to
the Company. In the event that cash flows are not adequate to satisfy the
Company's future operating needs, inclusive of payment of outstanding
liabilities, additional debt and/or equity financing will be required.   




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<PAGE>   14
                                     PART II

                                OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

                  The Company is a named defendant in a lawsuit commenced in the
United States District Court for the Southern District of New York on or about
December 16, 1997 (Lindsay v. The Wrecked and Abandoned Vessel RMS Titanic, et
al., in rem, and RMS Titanic, Inc. et al., No. 97Civ9248). The plaintiff therein
alleges, inter alia, that he rendered certain services to the Company in
connection with its 1996 expedition to the Titanic wreck site and in particular
connection with the alleged production of film , video and still images of the
Titanic illuminated by certain light towers. The relief sought includes an
accounting and a judgment declaring the plaintiff a co-salvor of the 1996
expedition and awarding him, in specie, the underwater, film, video and still
photographs allegedly obtained by plaintiff from the use of the light towers.
The plaintiff also seeks an award of compensatory damages of up to approximately
$500,000 and punitive damages in excess of $2,000,000 based upon claims of
breach of contract, fraudulent misrepresentation, money lent, quantum meruit and
conversion. Management of the Company believes it has meritorious defenses to
these claims, intends to defend its position vigorously, and to assert
counterclaims seeking compensatory and punitive damages against the plaintiff
based upon, among other things, claims that the plaintiff has wrongfully removed
and retained property owned by the Company, has wrongfully interfered with the
Company's contractual relations with third parties, and has violated the
Company's copyright to the images obtained with the light towers. In connection
with this action, the parties agreed that, without further order of the court,
coins and currency recovered from the Titanic located within the Southern
District of New York (the "District") as of December 18, 1997 will not be
removed from the District, and will not be sold, liened or otherwise encumbered.
On the basis that the Company has no intention to remove, sell, lien or
otherwise encumber these items, management of the Company believes that this
agreement will have no material adverse affect upon the Company.

ITEM 2.           CHANGES IN SECURITIES.

                  None.

ITEM 3.           DEFAULT UPON SENIOR SECURITIES.

                  None.


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<PAGE>   15
ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

                  None.

ITEM 5.           OTHER INFORMATION.

                  None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

                  (a) EXHIBITS

                  None.

                  (b) REPORTS ON FORM 8-K

                  The Company filed a Form 8-K dated September 9, 1997,
reporting on Item 5, and a Form 8-K dated October 20, 1997 reporting on Items 5
and 7.

                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        RMS TITANIC, INC.
                                        (Registrant)



Dated:       January 20, 1998           By: /s/ George Tulloch
                                           -------------------------------------
                                                George Tulloch, Principal
                                                  Executive Officer and Acting
                                                  Principal Accounting Officer




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