<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 May 31, 1999

[ ]  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 X No

         The number of shares outstanding of the registrant's common stock on
July 15, 1999 was 16,187,119.
<PAGE>   2
                                                                         PAGE
                                                                         NUMBER
                                                                         ------
                                     PART I

                              FINANCIAL INFORMATION

Item 1.  Financial Statements                                                3

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations                       14

                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings                                                   18

Item 2.  Changes in Securities                                               19

Item 3.  Defaults Upon Senior Securities                                     19

Item 4.  Submission of Matters to a Vote of Security Holders                 19

Item 5.  Other Information                                                   19

Item 6.  Exhibits and Reports on Form 8-K                                    19

Signatures                                                                   21


                                       2
<PAGE>   3
                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         The financial statements of RMS Titanic, Inc. (the "Company"), included
herein were prepared, without audit, pursuant to rules and regulations of the
Securities and Exchange Commission. 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 as included in the Company's Form 10-K for the year
ended February 28, 1999.


                                          3
<PAGE>   4
<TABLE>
<CAPTION>

                                                                                        RMS TITANIC, INC.

                                                                                            BALANCE SHEET
=========================================================================================================

                                                                           MAY 31,           FEBRUARY 28,
                                                                            1999                 1999
                                                                        ------------         ------------
                                                                         (unaudited)
<S>                                                                     <C>                  <C>
ASSETS

Current Assets:
  Cash and cash equivalents                                             $  1,333,248         $    719,929
  Accounts receivable                                                      1,248,950            1,645,373
  Refundable withholding tax                                                      --              429,022
  Prepaid expenses and other current assets                                  256,301              179,024
                                                                        ------------         ------------
      TOTAL CURRENT ASSETS                                                 2,838,499            2,973,348

Artifacts Recovered, at cost                                               9,180,376            9,181,340

Deferred Income Tax Asset, net                                               509,000              509,000

Property and Equipment, net of accumulated depreciation
 of $401,706 and $319,013, respectively                                    1,154,553            1,207,331

Other Assets                                                                 417,694               38,694
                                                                        ------------         ------------
      TOTAL ASSETS                                                      $ 14,100,122         $ 13,909,713
                                                                        ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued liabilities                              $  1,902,226         $  1,909,926
  Income taxes payable                                                       121,000                   --
  Deferred revenue                                                           150,000              500,000
                                                                        ------------         ------------
      TOTAL CURRENT LIABILITIES                                            2,173,226            2,409,926
                                                                        ============         ============

Commitments and Contingencies

Stockholders' Equity:
  Common stock - $.0001 par value; authorized 30,000,000 shares,
   issued and outstanding 16,187,128 shares                                    1,619                1,619
  Additional paid-in capital                                              13,915,748           13,915,748
  Accumulated deficit                                                     (1,990,471)          (2,417,580)
                                                                        ------------         ------------
      STOCKHOLDERS' EQUITY                                                11,926,896           11,499,787
                                                                        ------------         ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $ 14,100,122         $ 13,909,713
                                                                        ============         ============
</TABLE>

                        See Notes to Financial Statements

                                        4
<PAGE>   5
<TABLE>
<CAPTION>

                                                                         RMS TITANIC, INC.

                                                                   STATEMENT OF OPERATIONS
                                                                               (UNAUDITED)
==========================================================================================
<S>                                                         <C>                <C>
THREE-MONTH PERIOD ENDED MAY 31,                               1999                1998
                                                            -----------        -----------
Revenue:
  Exhibitions and related merchandise sales                 $ 1,128,078        $ 2,097,019
  Licensing fees                                                 11,361            115,941
  Merchandise and other                                         163,447            272,020
  Sale of coal                                                    9,639             77,339
                                                            -----------        -----------
Total revenue                                                 1,312,525          2,562,319
                                                            -----------        -----------
Expenses:
  Cost of coal sold                                                 964              2,630
  Cost of merchandise sold                                        1,526                 --
  General and administrative                                    560,946            387,395
  Depreciation and amortization                                  82,693             30,225
                                                            -----------        -----------
Total expenses                                                  646,129            420,250
                                                            -----------        -----------
Income from operations                                          666,396          2,142,069

Interest income                                                  13,910             10,440
                                                            -----------        -----------
Income before provision for income taxes                        680,306          2,152,509

Provision for income taxes                                      253,197            811,264
                                                            -----------        -----------
Net income                                                  $   427,109        $ 1,341,245
                                                            ===========        ===========

Basic income per common share                               $       .03        $       .08
                                                            ===========        ===========

Weighted-average number of common shares outstanding         16,187,128         16,187,128
                                                             ==========         ==========
</TABLE>

                          See Notes to Financial Statements
                                           5
<PAGE>   6
<TABLE>
<CAPTION>

                                                                                                 RMS TITANIC, INC.

                                                                                           STATEMENT OF CASH FLOWS
                                                                                                       (UNAUDITED)
==================================================================================================================
<S>                                                                                <C>                 <C>
THREE-MONTH PERIOD ENDED MAY 31,                                                      1999                 1998
                                                                                   -----------         -----------
Cash flows from operating activities:
  Net income                                                                       $   427,109         $ 1,341,245
                                                                                   -----------         -----------
  Adjustments to reconcile net income to net cash provided by operating
   activities:
    Depreciation and amortization                                                       82,693              30,225
    Other                                                                                   --             (76,500)
    Reduction in artifacts recovered                                                       964               2,630
    Noncash exhibition revenue                                                        (225,000)                 --
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable                                       396,423            (874,831)
      Decrease (increase) in refundable withholding tax                                429,022            (130,570)
      Increase in prepaid expenses and other current assets                            (77,277)                 --
      Increase in other assets                                                          (4,000)            (52,630)
      Decrease in accounts payable and accrued liabilities                              (7,700)           (197,348)
      Increase in income taxes payable                                                 121,000            (682,384)
      Decrease in deferred revenue                                                    (500,000)            (14,943)
                                                                                   -----------         -----------
        TOTAL ADJUSTMENTS                                                              216,125            (631,583)
                                                                                   -----------         -----------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                                      643,234             709,662
                                                                                   -----------         -----------
Cash flows used in investing activity - purchases of property and equipment            (29,915)            (66,070)
                                                                                   -----------         -----------
Net increase in cash                                                                   613,319             643,592

Cash and cash equivalents at beginning of period                                       719,929           1,000,269
                                                                                   -----------         -----------
Cash and cash equivalents at end of period                                         $ 1,333,248         $ 1,643,861
                                                                                   ===========         ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

  Cash paid during the three-month period for income taxes                         $   349,103         $   128,880
                                                                                   ===========         ===========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITY:

  Noncash purchases of property and equipment                                      $        --         $    76,500
                                                                                   ===========         ===========
</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 May 31, 1999 and its results of
                  operations and its cash flows for the three months ended May
                  31, 1999 and 1998. Results of operations for the three
                  month period ended May 31, 1999 are not necessarily
                  indicative of the results that may be expected for the year
                  ending February 29, 2000.

Note 2 -          In February 1997, the FASB issued SFAS No. 128, Earnings
                  per Share. SFAS No. 128 requires dual presentation of basic
                  earnings (loss) per share ("EPS") and diluted EPS on the face
                  of all statements of earnings issued after December 15, 1997
                  for all entities with complex capital structures. Basic EPS is
                  computed as net earnings divided by the weighted-average
                  number of common shares outstanding for the period. Diluted
                  EPS reflects the potential dilution that could occur from
                  common shares issuable through stock-based compensation
                  including stock options, restricted stock awards, warrants and
                  other convertible securities.  Diluted EPS is not presented
                  for the three months ended May 31, 1998 and 1997 since the
                  dilutive effect of potential common shares is not material.

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. The agreement, as amended, extended the exhibition
                  through May 10, 1998 and further extended the exhibition
                  through September 30, 1998. Pursuant to the agreement, as
                  amended, the Company received two-thirds of the net profits,
                  after recoupment of certain project expenses through February
                  28, 1998, and $2.00 per visitor from March 1, 1998 to May 1,
                  1998, and two-thirds of the net profits, after recoupment of
                  certain project expenses, from May 2, 1998 through September
                  30,1 9998, as defined. In addition, the Company received a
                  percentage of merchandise revenue, as defined, for the period
                  from March 1, 1998 to September 30, 1998. Additionally, the
                  Company received guaranteed exhibition fees attributable to
                  the initial term of the exhibition of $460,000 as a
                  non-refundable advance against the Company's share of net
                  profits, as defined.

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


                  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 and further extended the exhibition
                  to May 31, 1998. Pursuant to the agreement, the Company
                  received 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"), as
                  defined. In addition, the Company received 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 was $300,000.

                  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, was further extended through September 7,
                  1998, and has been extended on a month-to-month basis
                  thereafter (the "Extension Term"). The exhibition was
                  thereafter extended through March 21, 1999. Pursuant to the
                  Queen Mary exhibition agreement, the Company received, 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 received fifty (50%) percent
                  of net profits, as defined, from the sale of merchandise at
                  the Queen Mary exhibition.

                  In April 1998, the Company entered into an agreement with
                  Resource Plus and Event Management International ("EMI"), a
                  division of the World Trade Center Boston, for an exhibition
                  of Titanic artifacts in Boston, Massachusetts from July 1,
                  1998 through on or about November 15, 1998. Pursuant to the
                  exhibition agreement, the Company was to receive two-thirds
                  (2/3) of the net profits, after recoupment of certain project
                  expenses, as defined. The agreement further provided that the
                  ownership interest of certain exhibitry and equipment
                  aggregating $750,000 was transferred to the Company as of
                  August 31, 1998, in satisfaction of the minimum exhibition
                  fees due to


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


                  the Company. This exhibition closed on November 29, 1998. The
                  Company earned no exhibition fees in excess of the minimum.

                  In May 1998, the Company entered into an agreement with
                  Titanic Exhibition Japan Inc. ("TEJI") for the exhibition of
                  approximately 200 Titanic artifacts in seven (7) venues in
                  Japan commencing on or about July 20, 1998 and ending on or
                  about July 31, 1999. Pursuant to the exhibition agreement,
                  TEJI has agreed to pay the conservator of the Company's
                  artifacts $321,000 for the conservation and restoration of
                  artifacts to be displayed in the exhibition. The exhibition
                  agreement further provides that TEJI will pay to the Company
                  the greater of $3.00 per attendee or 50% of the profits, as
                  defined, and that the Company has the right to select and
                  obtain legal title to 50% of the exhibitry utilized in the
                  exhibition at no additional cost to the Company. Revenue for
                  the quarter ended May 31, 1999 includes $225,000, representing
                  60% of the value of the Company's share of the exhibitry
                  utilized in the Japanese exhibition, with the balance of
                  $150,000 related to such exhibitry having been recognized as
                  deferred revenue.

                  In August 1998, the Company entered into an agreement with
                  CRE-CO and Freddy Burger Management Group for the exhibition
                  of Titanic artifacts in Zurich, Switzerland from November 11,
                  1998 through May 9, 1999. Pursuant to the agreement, the
                  Company was to be paid a minimum of $600,000, in equal monthly
                  installments of $100,000 commencing November 30, 1998, with
                  such payments to be credited against the Company's rights to
                  receive two-thirds of the profits, if any, as defined, from
                  ticket, merchandise and sponsorship revenue in excess of a
                  budget of approximately $3,000,000.

                  In September 1998, the Company entered into an agreement with
                  Media Rare, Inc. for the presentation in St. Paul, Minnesota,
                  of the objects and exhibitry contained in the Company's Boston
                  exhibition for a period of four months commencing on January
                  1, 1999 and ending on April 30, 1999. Pursuant to this
                  agreement, the Company received, subsequent to February 28,
                  1999, the minimum fee of $1,000,000. This minimum payment
                  represents a credit against the Company's share of two-thirds
                  of the net profits, as defined, derived from ticket,
                  merchandise and sponsorship revenue in excess of certain
                  project expenses of approximately $2,000,000, as defined.
                  Included in the project expenses is a $300,000 payment to the
                  Company for the lease of its exhibitry for the


                                       9
<PAGE>   10
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


                  St. Paul exhibition. Pursuant to an amendment to this
                  agreement, Media Rare agreed to pay the Company a minimum of
                  $3.00 per visitor to the exhibition during the extension
                  thereof from May 1, 1999 to May 9, 1999 (the "Extension"),
                  with two-thirds of any revenues in excess of a budget of
                  approximately $113,000 for the extension period to be paid to
                  the Company, after crediting the $3.00 per visitor fee paid to
                  the Company against such profit distribution. The Company's
                  revenue for the quarter ended May 31, 1999 includes $680,358
                  from this exhibition, representing 50% of the minimum
                  guaranteed fee ($500,000), 50% of the exhibitry lease fee
                  ($150,000), and $30,358 for the Extension.

                  In March 1999, the Company entered into an agreement with
                  Magicworks Entertainment, Inc., a direct subsidiary of PACE
                  Entertainment, Inc. and an indirect subsidiary of SFX
                  Entertainment, Inc. (collectively "SFX"), pursuant to which
                  RMST granted SFX an exclusive worldwide license to exhibit the
                  Company's Titanic artifacts in consideration of the payment to
                  the Company of a minimum of $8,500,000 annually. The license
                  agreement has an initial term of one year, commencing
                  September 14, 1999, with SFX having the option to extend the
                  term for up to four additional one-year periods. Such
                  $8,500,000 payment is payable as follows: $500,000 upon the
                  effective date of the license agreement, and payments of
                  $2,000,000 each on a quarterly basis commencing September 15,
                  1999. The license agreement became effective in May 1999. All
                  obligations of SFX under the license agreement have been
                  guaranteed by SFX Entertainment, Inc.

                  Pursuant to the license agreement, the Company will receive
                  sixty-five (65%) percent and SFX will receive thirty-five
                  (35%) percent of net ticket, merchandise and sponsorship
                  revenues, after deduction of mutually agreed upon project
                  expenses. The $8,500,000 annual guaranteed minimum payment
                  to be made to the Company will be credited against its share
                  of net revenues in excess of project expenses. The Company has
                  the right to terminate the license agreement effective as of
                  September 14, 2001, or annually thereafter, upon the
                  occurrence of certain conditions, including the merger or sale
                  of majority control of the Company or substantially all of its
                  assets. If the Company terminates the license agreement, SFX
                  will have the right to continue one major exhibition,
                  containing no more than 200 of the Company's Titanic artifacts
                  and involving an investment by SFX in excess of $2,000,000,
                  until no later than September 14, 2004 in consideration of the
                  payment to the Company


                                       10
<PAGE>   11
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

                  of a minimum of $2,250,000 annually. Upon recoupment of the
                  project expenses, the Company has the right to select and
                  obtain legal title to, without the payment of additional
                  consideration, sixty-five (65%) of the exhibitry built for the
                  exhibitions presented during the term of the agreement.

                  In addition, the license agreement provides that the Company
                  shall receive twenty (20%) percent of the profits, if any,
                  from a current Titanic themed exhibition in Orlando, Florida
                  presented by SFX and third parties. Under the license
                  agreement, SFX does not have the right to include any of the
                  Company's Titanic artifacts in the Orlando exhibition. A
                  member of the board of directors of the Company is a related
                  party to this exhibition.

                  The Company commenced an exhibition on May 29, 1999 of
                  approximately 200 of its Titanic artifacts in Atlantic City at
                  the Tropicana Hotel. This exhibition, which includes a section
                  of Titanic's hull recovered during the 1998 Titanic
                  expedition, is scheduled to conclude on September 7, 1999.
                  Pursuant to the exhibition agreement entered into in April
                  1999, Tropicana is responsible for payment of all costs and
                  expenses related to the presentation, operation and marketing
                  of the exhibition, with the exception of the Company's
                  contribution of approximately $100,000 of the installation
                  costs of the exhibition. The exhibition agreement provides
                  that the Company will receive all ticket and merchandising
                  revenue from the exhibition, without recoupment by Tropicana
                  of any of its costs for presenting, operating and marketing
                  the exhibition. It was further agreed that sponsorship
                  revenues, less commissions, will be divided equally between
                  the Company and Tropicana.

                  Merchandising operations at the Atlantic City exhibition are
                  conducted through an unaffiliated third party, Titanic
                  Merchandising, Inc. ("TMI"). Pursuant to the Company's
                  agreement with TMI, the Company receives thirty (30%) percent
                  of the gross revenues derived from the sale of merchandise at
                  the retail shop established within the exhibition premises.

Note 4 -          The Company is a named defendant in a lawsuit commenced in
                  the United States District Court for the Eastern District of
                  Virginia) on or about May 4, 1998 (Haver v. RMS Titanic, Inc.,
                  Civil Action No.: 2:98cv507). The plaintiff therein seeks a
                  declaratory judgment permitting him to participate in a
                  photographic expedition to the wreck of the Titanic known as
                  Operation Titanic. This action does not challenge the
                  Company's salvor-


                                       11
<PAGE>   12
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


                  in-possession status. On or about May 4, 1998, the Company
                  instituted a motion for a preliminary injunction in the United
                  States District Court for the Eastern District of Virginia
                  against Deep Ocean Expeditions, Mike McDowell, Bakers
                  World Travel, Quark Expedition, Ralph White, Don Walsh,
                  Alfred S. McLaren, WildWings, and Mr. Haver, all of
                  whom are involved in Operation Titanic, seeking an order
                  enjoining such parties from conducting their proposed
                  photographic expedition. (R.M.S. Titanic, Inc. v. The Wrecked
                  and Abandoned Vessel, etc. believed to be the RMS Titanic, in
                  rem, Civil Action No. 2:93cv902). The United States District
                  Court for the Eastern District of Virginia has previously
                  held, in August 1996, that RMS Titanic, Inc. had the right to
                  exclude others from taking photographs of the wreck and to
                  control entry in to the wreck site. The Court's ruling to that
                  effect also states that the Company has the right to exclude
                  others from the wreck site regardless of whether the Company
                  is at the wreck site while other groups attempt to visit the
                  site. Pursuant to stipulation, the action commenced by Mr.
                  Haver and the Company's motion for a preliminary injunction
                  have been consolidated. By Order dated June 23, 1998, the
                  Court granted the Company's motion for a preliminary
                  injunction enjoining certain parties from visiting the wreck
                  site to view and photograph the wreck. Certain of the enjoined
                  parties have appealed the Order to the U.S. Court of Appeals
                  for the Fourth Circuit. In March 1999 the U.S. Court of
                  Appeals for the Fourth Circuit issued an opinion affirming the
                  Company's status as salvor-in-possession of the wreck of the
                  Titanic, and reversing that portion of the District Court's
                  ruling that the Company could exclude others from viewing and
                  photographing the wreck and wreck site. The Company has filed
                  an appeal with the United States Supreme Court from the
                  decision of the U.S. Court of Appeals for the Fourth Circuit
                  rendered in April 1999.

                  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), as disclosed in the Company's
                  report on Form 8-K dated June 15, 1998. The plaintiff alleges
                  therein, 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


                                       12
<PAGE>   13
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

                  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, copyright infringement, fraudulent
                  misrepresentation, money lent, quantum meruit and conversion.
                  Management of the Company has filed an answer denying the
                  essential allegations of the complaint, and has asserted
                  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 and has infringed upon the
                  Company's copyright to the images obtained with the light
                  towers. The Company filed a motion to dismiss the complaint
                  and/or transfer it to the Eastern District of Virginia. By
                  order dated September 1, 1998, the Court granted the Company's
                  motion to dismiss the plaintiff's claim for an accounting, and
                  otherwise denied the Company's motion to dismiss and/or
                  transfer the action. This action is now in the stage of
                  discovery proceedings, with a motion instituted by the Company
                  to dismiss plaintiff's claim for copyright infringement, as
                  alleged in an amended complaint, presently pending before the
                  Court. The Company intends to defend itself vigorously against
                  the plaintiff's claims and to pursue its counterclaims

                  The Company is a named defendant in a lawsuit commenced in the
                  Arizona Superior Court, Maricopa County (North American
                  Capital Consultants, Inc. v. RMS Titanic, Inc. et al.) On
                  March 3, 1999, the Company removed the action to the United
                  States District Court for the District of Arizona (No. CIV
                  99-0401-PHX-SMM). The complaint alleges that the Company
                  breached a contractual obligation to deliver to the plaintiff
                  - a financial public relations firm - 250,000 warrants
                  exercisable, at various prices per share, into freely-trading
                  common stock of the Company, and further claims that the
                  actions of the Company, in allegedly promising to deliver such
                  warrants, constituted negligent misrepresentation, fraud, and
                  breach of fiduciary duty, and that the plaintiff is entitled
                  to recover damages on a quantum meruit basis. The complaint
                  seeks an order requiring the Company to deliver the warrants,
                  damages in the amount of $250,000 and unspecified punitive
                  damages, attorneys' fees and costs. The Company has filed an
                  answer denying the essential allegations of the complaint, and
                  has asserted a counterclaim alleging the plaintiff's


                                       13
<PAGE>   14
RMS TITANIC, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

                  breach of its contractual obligations to the Company and is
                  seeking damages of approximately $36,000 plus attorneys' fees
                  and costs. A proposed settlement of this action is presently
                  under consideration, the terms of which would not have a
                  material financial affect upon the Company. If this action is
                  not resolved through settlement, the Company intends to defend
                  vigorously against the plaintiff's claims and to pursue its
                  counterclaim. This action is now in the discovery stage of
                  proceedings.

Note 5 -          The Company has approved the grant to the Company's
                  President of five-year options expiring on May 26, 2004 to
                  purchase 500,000 shares of the Company's Common Stock at a
                  price of $1.98 per share.

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 MAY 31, 1999 VERSUS
THE QUARTER ENDED MAY 31, 1998


                  During the first quarter of its 2000 fiscal year (the "2000
fiscal year"), the Company's revenues decreased approximately 49%, as compared
to the first quarter of its 1999 fiscal year (the "1999 fiscal year"). This
decrease was principally attributable to a 46% decrease in revenue from
exhibitions and related merchandise sales during the first quarter of the 2000
fiscal year as compared to the first quarter of the 1999 fiscal year. This
decrease was primarily attributable to the timing of the receipt of revenue from
the Company's exhibition in St. Petersburg, Florida during the first quarter of
the 1999 fiscal year as compared to the timing of receipt of revenue from the
Company's exhibition in St. Paul, Minnesota during the first quarter of the 2000
fiscal year; exhibitions of the Company's Titanic artifacts having been
presented in St. Petersburg, Florida, Hamburg, Germany and Long Beach,
California throughout the first quarter of the 1999 fiscal year, while
exhibitions were presented for portions of the first quarter of the 2000 fiscal
year in each of St. Paul, Minnesota, Zurich, Switzerland, Long Beach,
California, and two cities in Japan. In addition, the Company's revenue from
the exhibition in Zurich, Switzerland during the first quarter of the 2000
fiscal year was substantially less than its revenue from its Hamburg, Germany
exhibition during the first quarter of the 1999 fiscal year. In view of the
logistical and operational


                                       14
<PAGE>   15
difficulties in establishing short-term exhibitions on satisfactory terms, and
the of the Company's license to a subsidiary of SFX Entertainment, Inc. of
worldwide rights to exhibit the Company's Titanic artifacts for a minimum of
one (1) year, commencing September 14, 1999, in consideration of the payment to
the Company of a minimum of $8,500,000, the Company, apart from commitments for
the completion of the touring exhibition in Japan, has entered into only an
agreement for the exhibition of its artifacts in Atlantic City, New Jersey
during the period from May 29, 1999 to September 7, 1999. Revenue from
licensing fees decreased approximately 90% during the first quarter of the 2000
fiscal year as compared to the first quarter of the 1999 fiscal year, and
merchandise and other revenue decreased approximately 40% during the first
quarter of the 2000 fiscal year as compared to the first quarter of the 1999
fiscal year. These decreases were principally attributable to the heightened
interest in Titanic products during the first quarter of the 1999 fiscal year
during the release of the feature film "Titanic," as well as the Company's
receipt of revenues during the 1999 quarter from a book published in
conjunction with unrelated third parties. Additionally, the Company recognized,
as other revenue during the first quarter of its 2000 fiscal year, $150,000
from the rental of exhibitry for use in the St. Paul, Minnesota exhibition, as
compared to having recognized, during the first quarter of the 1999 fiscal
year, $76,500 from the rental of exhibitry for use in the St. Petersburg,
Florida exhibition. The Company's revenue from the sale of coal decreased
approximately 88% during the first quarter of the 2000 fiscal year as compared
to the first quarter of the 1999 fiscal year, principally as a result of
decrease in sales of coal made through the Company's web site, retail efforts
undertaken by third parties while the "Titanic" movie was in theatrical
release, and in merchandise shops of the Company's United States exhibitions.

         The Company's cost of coal sold decreased approximately 63% during the
first quarter of the 2000 fiscal year as compared to the first quarter of the
1998 fiscal year, with such decrease relating to the volume of sales in the
respective periods. General and administrative expenses of the Company
increased approximately 45% during the first quarter of the 2000 fiscal year as
compared to the first quarter of the 1999 fiscal year, primarily as a result of
the Company incurring the expense for the deinstallation and transportation of
the exhibition from St. Paul, Minnesota to Atlantic City, New Jersey, an
increase in professional fees, and an increase in executive compensation. The
Company's depreciation expense increased approximately 174% during the first
quarter of its 2000 fiscal year as compared to the first quarter of its 1999
fiscal year as a result of depreciation related to exhibitry equipment acquired
during the 1999 fiscal year.

         The Company's income before provision for income taxes decreased
approximately 68% during the first quarter of the 2000 fiscal year as compared
to the first quarter of the 1999 fiscal year. The Company's provision for income
taxes decreased approximately 69% during the first quarter to the 2000 fiscal
year as compared to the first quarter of the 1999 fiscal year, and net income
decreased approximately 68% during the first quarter of the 2000 fiscal year as
compared to the first quarter of the 1999 fiscal year.


                                       15
<PAGE>   16
                         LIQUIDITY AND CAPITAL RESOURCES

         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 has 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 paid subsequent to February 29, 1996. The source of such $280,000 payment
was from an unaffiliated 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 $180,600 from the sale of coal during the 1999,
1998, 1997 and 1996 fiscal years, resulting in an unpaid balance of $99,400 as
of February 28, 1999. Such unpaid balance, which was not further reduced during
the first quarter of the 2000 fiscal year, does not bear interest. There were
no profits from sale of cruise ship cabins for the 1996 expedition.

         The Company's capital commitments during its 2000 fiscal year include
lease payments for its principal offices, and compensation to its executive
officer and to its general counsel.

         Pursuant to its agreement with Resource Plus and Event International
("EMI") for the exhibition of the Company's artifacts in Boston, Massachusetts,
the Company agreed to pay EMI the sum of $300,000 to provide certain services,
including de-installation, shipping and installation of the exhibition in its
next venue (St. Paul, Minnesota). As a result of EMI's alleged breach of the
agreement, the Company terminated EMI's obligations and corresponding rights
with respect to the de-installation, shipping and installation of the
exhibition. EMI has demanded that the Company pay $100,000 to EMI with respect
to these matters, and in addition thereto, the sum of approximately $175,000 in
connection with claimed cost overruns incurred in connection with the Boston
exhibition. The Company has rejected such demands.

         The Company's near term operating needs will be financed principally
from the distribution of revenues to the Company under its agreements for
exhibition in Atlantic City, New Jersey; its touring exhibition in Japan; and
its exhibition tour agreement with a subsidiary of SFX Entertainment, Inc,
pursuant to which the Company will be paid a minimum of $8.5 million annually
for the grant of exhibition rights for an initial one-year period commencing
September 14, 1999, subject to options granted to the licensee to extend the
term for up to four (4) additional one year periods in consideration of
additional minimum annual payments to the Company of $8.5 million.

         Substantially all of the Company's cash flow derives from the Company's
operating activities.


                                       16
<PAGE>   17
None of the Company's cash flow during the first quarter of the 2000 fiscal year
derived from financing activities, with approximately $30,000 used in
investing activities.

         In view of the Company's recent purchase of new computers and the
limited impact that Year 2000 issue has upon the Company's business activities
or competitive conditions, management of the Company does not believe that Year
2000 issues will have a material adverse affect upon the Company.

         Except for historical information contained herein, this Annual 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 including, without limitation, the Company's needs, as discussed
above, to obtain additional financing in order to achieve its objectives and
plans. 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 as well as in the risk factors discussed below.
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 of the Company or any other such
person that the objectives and plans of the Company will be achieved.

         The Company's future business and operating results depend in
significant part upon the continued contributions of George Tulloch, the
Company's President. The Company does not maintain a key person life insurance
policy on Mr. Tulloch. The Company's future business and operating results also
depends in significant part upon its ability to attract and retain qualified
additional management and support personnel for its operations.

         In order to protect its salvor-in-possession status and to prevent
third-parties from salvaging the Titanic wreck and wreck site, or interfering
with the Company's rights and ability to salvage the wreck and wreck site, the
Company may have to commence judicial proceedings against third-parties. Such
proceedings could be expensive and time-consuming. Additionally, the Company, in
order to maintain its salvor-in-possession status, needs to, among other things,
maintain a reasonable presence at the wreck through periodic expeditions. The
Company will be required to incur the costs for future expeditions so as to
maintain its salvor-in-possession status. The Company's ability to undertake
future expeditions may be dependent upon the availability of financing from the
grant of licenses to produce television programming and/or the grant of
expedition sponsorship rights. No assurances can be given that such financing
will be available on satisfactory terms.

         The amount spent by consumers on discretionary items, such as
entertainment activities and the purchase of merchandise, is dependent upon
consumers' levels of discretionary income, which may be adversely affected by
general or local economic conditions. A decrease in consumer spending on such


                                       18
<PAGE>   18
activities could have a material adverse effect on the Company's revenues from
exhibition activities and merchandising efforts.

         The Company's sales of coal recovered from the Titanic wreck site and
other merchandise through its web site increased significantly during the period
of the initial theatre release of the motion picture "Titanic" in December 1997
without the Company incurring any significant marketing expenses. This coal is
the only object recovered from the Titanic that the Company is offering or will
offer for sale to the general public. Through the date of this report,
approximately 125,000 units of the Company's Titanic coal have been sold since
the commencement of such sales in the fall 1996, which represents approximately
one-half of the total units of coal available for sale. A substantial portion of
the remaining Titanic coal supply is different in size than that which the
Company has marketed to date, and the Company's pricing and commercial
presentation of the coal is likely to change. No assurances can be given that
different price points or different presentations of the coal will be attractive
to consumers. Additionally, in the event that the Company does not recover any
additional Titanic coal, and the existing supply of coal is exhausted in the
future, the volume of the Company's merchandise sales may be materially
adversely affected in the absence of the introduction and marketing of
additional products, such as replicas of artifacts.

         To the extent that the Company has transactions outside of the United
States, the Company could be affected by nationalizations or unstable
governments or legal systems or intergovernmental disputes. These economic and
political uncertainties may affect the Company's results of operations,
especially to the extent that these matters affect the Company's exhibition
plans in Europe and Japan.

         In connection with its activities outside of the United States, the
Company is exposed to the risk of currency fluctuations between the United
States dollar and certain foreign currency. If the value of the United States
dollar increases in relation to the foreign currency, the Company's potential
revenues from exhibition and merchandising activities outside of the United
States will be adversely affected. During the third quarter of the 1999 fiscal
year, there were no significant fluctuations in the exchange rates with respect
to foreign currencies in which the Company transacts business. Although the
Company's financial arrangements with IFREMER and its exhibition organizers in
Germany, Zurich and Japan and other entities have been based in whole or in part
upon foreign currencies, the Company has sought and will continue to seek to
base its financial commitments and understandings upon the United States dollar
in its material business transactions so as to minimize the adverse potential
effect of currency fluctuations.


                                       19
<PAGE>   19
                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         There has been no material change in the lawsuit commenced in the
United States District Court for the Eastern District of Virginia) on or about
May 4, 1998 (Haver v. RMS Titanic, Inc., Civil Action No.: 2:98cv507) subsequent
to the filing of the report on Form 10-K for the year ended February 28, 1999,
except that the Company has filed an appeal with the United States Supreme Court
from the decision of the U. S. Court of Appeals for the Fourth Circuit rendered
in April 1999.

         There has been no material change in the status of the 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)
subsequent to the filing of the report on Form 10-K for the year ended February
28, 1999.

         There has been no material change in the status of the lawsuit
commenced in the Arizona Superior Court, Maricopa County (North American Capital
Consultants, Inc. v. RMS Titanic, Inc. et al.), which has been removed to the
United States District Court for the District of Arizona (No. CIV
99-0401-PHX-SMM) subsequent to the filing of the report on Form 10-K for the
year ended February 28, 1999.

ITEM 2.  CHANGES IN SECURITIES.

         None.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES.

         None.

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.


                                       19
<PAGE>   20
(a)      EXHIBITS

10.1     Exhibition Tour Agreement between the registrant and Magicworks
         Entertainment, Inc. dated March 31, 1999.

10.2     Exhibition Agreement between the registrant and Adamar New Jersey, Inc.
         D/B/A Tropicana Casino and Resort dated April 5, 1999.

(b)      REPORTS ON FORM 8-K

         None.




                                       20
<PAGE>   21
                                   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:   July 20, 1999
                                  By:  /s/ George Tulloch
                                  -------------------------------------------
                                  George Tulloch, Principal Executive Officer
                                  and Acting Principal Accounting Officer


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