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, 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.

         [X] Yes [ ] No


          The number of shares  outstanding of the registrant's common stock on
November 30, 1999 was 16,187,128.


<PAGE>



                                      INDEX



                                                                       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         11


                                     PART II

                                OTHER INFORMATION

Item 1.           Legal Proceedings                                     16

Item 4.           Submission of Matters to a Vote of Security Holders   18

Item 6.           Exhibits and Reports on Form 8-K                      18

Signatures                                                              19



                                       2
<PAGE>


                                     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>


                                                      RMS TITANIC, INC.

                                                       Balance Sheets

<TABLE>
<CAPTION>

                                                                                     November 30,            February 28,
                                                                                         1999                    1998
                                                                                 ---------------------    --------------------
                                                                                     (unaudited)

<S>                                                                            <C>                    <C>
Assets
Current Assets:
   Cash and cash equivalents                                                   $            3,641,530   $             719,929
   Accounts receivable                                                                        571,004               1,645,373
   Refundable withholding tax                                                                 166,475                 429,022
   Prepaid expenses and other current assets                                                1,187,468                 179,024
                                                                                 ---------------------    --------------------

          Total current assets                                                              5,566,477               2,973,348
                                                                                 ---------------------    --------------------

Artifacts recovered, at cost                                                                9,178,839               9,181,340

Deferred income tax asset, net                                                                509,000                 509,000

Property and equipment, net of accumulated depreciation
 of $564,486 and $319,013, respectively                                                     1,372,848               1,207,331

Other assets                                                                                   99,224                  38,694

          Total assets                                                         $           16,726,388   $          13,909,713
                                                                                 =====================    ====================

Liabilities and Stockholders' Equity

Current Liabilities:
   Accounts payable and accrued liabilities                                    $            2,100,227   $           1,909,926
   Income taxes payable                                                                     1,083,947                       -
   Deferred revenue                                                                           729,167                 500,000
                                                                                 ---------------------    --------------------

          Total current liabilities                                                         3,913,341               2,409,926
                                                                                 ---------------------    --------------------

Commitments and contingencies                                                                       -                       -

Stockholders' Equity:
   Common stock, par value $.0001
      authorized 30,000,000 shares,
       16,187,128 issued and outstanding                                                        1,619                   1,619

   Additional paid-in capital                                                              13,915,748              13,915,748
   Accumulated deficit                                                                     (1,104,320)             (2,417,580)
                                                                                 ---------------------    --------------------

          Total stockholders' equity                                                       12,813,047              11,499,787
                                                                                 ---------------------    --------------------


          Total liabilities and stockholders' equity                           $           16,726,388   $          13,909,713
                                                                                 =====================    ====================


</TABLE>

See notes to financial statements.


                                       4
<PAGE>



                                RMS TITANIC, INC.

                            Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                       For the Three Months Ended                   For the Nine Months Ended
                                                   -----------------------------------      ----------------------------------------
                                                   November 30,         November 30,           November 30,           November 30,
                                                       1999                 1998                   1999                   1998
                                                   --------------     ----------------      -----------------      -----------------

<S>                                                <C>             <C>                   <C>                    <C>
Revenue:
      Exhibitions and related merchandise sales    $   1,881,303    $         991,008     $        4,378,818     $        4,161,538
      Licensing fees                                     (11,550)                   -                  4,763              3,481,591
      Merchandise and other                                9,850              118,694                210,462                548,225
      Sale of coal                                         2,743               70,094                 25,008                193,560
                                                   --------------     ----------------      -----------------      -----------------

           Total revenue                               1,882,346            1,179,796              4,619,051              8,384,914

Expenses:
      Cost of coal sold                                      274                7,517                  2,501                 19,000
      Cost of merchandise sold                             7,357               35,347                 11,964                 35,347
      General and administrative                         659,532              488,901              1,926,309              1,353,680
      Depreciation and amortization                       94,860               79,115                245,473                164,565
      Expedition costs attributable to licensing fees          -                    -                      -              1,845,000
      Impairment loss on exhibitory equipment                                                                               150,000
                                                   --------------     ----------------      -----------------      -----------------

           Total expenses                                762,023              610,880              2,186,247              3,567,592

           Income from operations                      1,120,323              568,916              2,432,804              4,817,322
                                                   --------------     ----------------      -----------------      -----------------

Other Income:
      Interest income                                     35,502               11,581                 65,844                 37,792
      Other                                                    -                    -                      -                  5,000
                                                   --------------     ----------------      -----------------      -----------------

           Total other income                             35,502               11,581                 65,844                 42,792
                                                   --------------     ----------------      -----------------      -----------------

           Income before provision for income taxes    1,155,825              580,497              2,498,648              4,860,114

           Provision for income taxes                    682,888              221,514              1,185,388              1,922,077
                                                   --------------     ----------------      -----------------      -----------------

           Net income                              $     472,937    $         358,983     $        1,313,260     $        2,938,037
                                                   ==============     ================      =================      =================


Basic loss per common share                        $        0.03    $            0.02     $             0.08     $             0.18
                                                   ==============     ================      =================      =================

Weighted average number of
      common shares outstanding                       16,187,128           16,187,128             16,187,128             16,187,128
                                                   ==============     ================      =================      =================

</TABLE>


See notes to financial statements.


                                       5
<PAGE>


                                                      RMS TITANIC, INC.

                                                  Statements of Cash Flows
                                                         (unaudited)

<TABLE>
<CAPTION>
                                                                                              For the Nine Months Ended
                                                                                       ---------------------------------------
                                                                                         November 30,         November 30,
                                                                                             1999                 1998
                                                                                       -----------------    ------------------

<S>                                                                              <C>                    <C>
Cash flows from operating activities:
   Reconciliation of net income to net cash
      used in operating activities
        Net income                                                                $           1,313,260  $          2,938,037
        Adjustments to reconcile net loss to net
          cash used in operating activities
          Depreciation and amortization                                                         245,473               164,565
          Impairment loss on exhibitory equipment                                                     -               150,000
          Reduction in artifacts recovered                                                        2,501                19,000
          Amortization of deferred revenue                                                            -               (76,500)
          Noncash exhibition revenue                                                           (375,000)             (750,000)
        Changes in operating assets and liabilities
          Decrease in accounts receivable                                                     1,074,369                23,413
          (Increase) in other current assets                                                 (1,008,444)               (7,600)
          Decrease (increase) in refundable withholding tax                                     262,547              (383,174)
          (Increase) in other assets                                                            (60,530)                 (814)
          Increase (decrease) in accounts payable and accrued liabilities                       190,301              (470,201)
          Increase (decrease) in income taxes payable                                         1,083,947                 5,920
          Increase (decrease) in deferred revenue                                               229,167               (14,943)
                                                                                       -----------------    ------------------
                 Net cash used in operating activities                                        2,957,591             1,597,703
                                                                                       -----------------    ------------------

Cash flows from investing activities:
   Artifact recovery costs                                                                            -            (1,500,000)
   Purchases of property and equipment                                                          (35,990)              (99,417)
                                                                                       -----------------    ------------------
                 Net cash used in investing activities                                          (35,990)           (1,599,417)
                                                                                       -----------------    ------------------

Cash flows from financing activities:
                                                                                                      -                     -
                                                                                       -----------------    ------------------
                 Net cash provided by financing activities                                            -                     -
                                                                                       -----------------    ------------------

                 Net increase in cash                                                         2,921,601                (1,714)

Cash and cash equivalents at the beginning of period                                            719,929             1,000,269
                                                                                       -----------------    ------------------

Cash and cash equivalents at the end of period                                    $           3,641,530  $            998,555
                                                                                       =================    ==================


Supplemental disclosure of cash flow information:
   Cash paid during the period for income taxes                                   $                   -  $          1,900,000
                                                                                       =================    ==================

Supplemental schedule of noncash investing activity:
   Noncash purchases of property and equipment                                    $             375,000  $            826,500
                                                                                       =================    ==================


</TABLE>

See notes to financial statements.


                                       6
<PAGE>


                                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, 1999 and its results of operations  and its cash flows
          for the  three  and nine  months  ended  November  30,  1999 and 1998.
          Results  of  operations  for the three and nine  month  periods  ended
          November 30, 1999 are not  necessarily  indicative of the results that
          may be expected for the year ending February 28, 2000.

Note 2    In  February  1997,  Statement  of  Financial  Accounting  Standards
          ("SFAS") No. 128, Earnings per Share was issued. 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 and nine  months  ended
          November  30,  1999 and 1998 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, 1998, 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.

          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,


                                       7
<PAGE>
                                RMS TITANIC, INC.
                          Notes to Financial Statements
                                   (unaudited)

          1998,  in  satisfaction  of the  minimum  exhibition  fees  due to 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 several  venues in Japan  commencing on or about
          July 20,  1998 and  ending on or about  July 31,  1999.  Such tour was
          extended to August 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 provides the Company 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 nine
          months ended November 30, 1999 included $622,317 from this exhibition.

          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.  The Company's  revenue for the
          nine month period ended November 30, 1999 included  $200,000 from this
          agreement.

          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 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.
          Revenue of $530,358 was  included  from this  exhibition  for the nine
          month period ended November 30, 1999.

          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  million
          annually.  The  license  agreement  has an  initial  term of one year,
          commencing  September  15, 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. Included in
          deferred  revenue in the  accompanying  balance  sheet at November 30,
          1999 is $729,167 which  represents the unearned portion of the minimum
          fee. The  Company's  revenue for the nine month period ended  November
          30, 1999 included $1,770,823 from this agreement.

          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


                                       8
<PAGE>

                                RMS TITANIC, INC.
                          Notes to Financial Statements
                                   (unaudited)

          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 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.  Subsequent to the execution of the
          license  agreement,  the  Company  granted  SFX the right to include a
          limited number of its Titanic artifacts in the Orlando,  FL exhibition
          in  consideration of the payment to the Company of $.50 per visitor 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,  concluded 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.  The Company's revenue for the nine month period
          ended  November 30, 1999  includes  $1,245,228  from the Atlantic City
          exhibition.

Note 4    The  Company was 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  sought  a  declaratory  judgment
          permitting  him to  participate  in a  photographic  expedition to the
          wreck of the Titanic known as Operation  Titanic.  This action did not
          challenge the Company's  salvor-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 were  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 had 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 stated that the Company had the
          right to exclude others from the wreck site  regardless of whether the
          Company was 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  appealed the Order to the U.S. Court
          of Appeals  for the Fourth  Circuit.  In April 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.  In October  1999,  the United  States  Supreme  Court
          denied  the  Company's  petition  for a writ of  certorari  seeking an
          appeal from the  decision of the U.S.  Court of Appeals for the Fourth
          Circuit rendered in April 1999.


                                       9
<PAGE>

                                RMS TITANIC, INC.
                          Notes to Financial Statements
                                   (unaudited)

          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 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, having
          been  denied by 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  breach  of  its
          contractual  obligations  to the  Company  and is  seeking  damages of
          approximately  $36,000 plus  attorneys' fees and costs. 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.

          Please  refer to Part II,  Item 1 of this form  10-Q,  for  additional
          legal proceedings information.


                                       10
<PAGE>


                                RMS TITANIC, INC.


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

This  Form  10-Q and the  discussion  which  follows  contains  forward  looking
statements that should be read in conjunction with the Financial  Statements and
notes thereto,  appearing  elsewhere  herein.  These statements  include,  among
others,  information regarding future operations and future net cash flows. Such
statements reflect our current views with respect to future events and financial
performance.  These forward looking  statements involve risks and uncertainties,
including, without limitation, general economic and business conditions, changes
in  political,  social  and  economic  conditions,  regulatory  initiatives  and
compliance with governmental regulations,  many of which are beyond our control.
Since these statements involve risks and uncertainties and are subject to change
at any time, our actual results could differ materially from expected results.

GENERAL

On May 4, 1993, RMS Titanic,  Inc. acquired all of the assets and assumed all of
the liabilities of Titanic Ventures Limited Partnership  ("TVLP"), a Connecticut
limited partnership.

Pursuant  to a judgment  entered in the Federal  District  Court for the Eastern
District of Virginia on June 7, 1994, we were declared  salvor-in-possession  of
the vessel RMS Titanic  (the  "Titanic"),  the sole and  exclusive  owner of any
items  recovered  from the Titanic and, so long as we are  salvor-in-possession,
the sole and exclusive  owner of items  recovered from the Titanic in the future
(the "Order").  The Order was re-affirmed by the Federal  District Court for the
Eastern District of Virginia in 1996 and 1998.

We were formed in 1987 for the purposes of exploring  the wreck and  surrounding
oceanic areas of the Titanic,  which sank in 1912 and lies more than 12,500 feet
below the surface of the Atlantic Ocean approximately 400 miles off the coast of
Newfoundland;  obtaining  oceanic  material and scientific  data available there
from in various forms, including still and moving photography and artifacts from
the  wreck  site;   and  utilizing   such  data  and  artifacts  for  historical
verification, scientific education and public awareness and in revenue-producing
activities  such as touring  exhibitions,  television  programs and the sales of
still  photography.  In August 1987, we contracted  with the Institute of France
for the Research and Exploration of the Sea ("IFREMER") to conduct an expedition
and dive to the wreck of the Titanic. Utilizing  state-of-the-art  technology of
IFREMER,   which  is  the  French   Government's,   and  the  world's   largest,
oceanographic institute,  approximately sixty (60) days of research and recovery
operations  were performed at the Titanic wreck site through the use of a manned
submersible  NAUTILE.  Approximately  1,800  objects were  recovered  during the
course of thirty-two (32) dives on such 1987 expedition.  The recovered  objects
were  conserved  and  preserved by  Electricite  de France  ("EDF"),  the French
government-owned  utility.  In  addition  to the  recovered  objects,  our  1987
expedition  also produced  approximately  140 hours of videotape  footage and an
estimated 7,000 still photographs from the wreck site.

In June 1993, we  successfully  completed  our second  expedition to the Titanic
wreck site, recovering  approximately 800 artifacts and producing  approximately
105 hours of videotape  footage during the course of fifteen (15) dives. In July
1994, we recovered  over 1,000 objects and produced  approximately  125 hours of
videotape  footage  during our third  expedition  to the Titanic  wreck site. In
August 1996,  we recovered  74 objects and produced  approximately  125 hours of
videotape  footage  during our fourth  expedition  to the Titanic wreck site. In
cooperation with Discovery Communications,  Inc., we produced three (3) hours of
television   programming  based  upon  our  activities  and  scientific  studies
undertaken during the 1996 expedition. Two hours of this programming,  presented
in  "Titanic:  Anatomy of A  Disaster,"  was the  highest  rated  program in the
history of The  Discovery  Channel  when it aired in April 1997.  In addition to
obtaining  videotape  footage  for the  television  productions,  a  substantial
portion of the 1996  expedition  was devoted to the recovery of a section of the
Titanic  hull,  measuring   approximately  26  feet  by  20  feet  and  weighing
approximately  20 tons,  from the debris field  surrounding  the wreck (the "Big
Piece").  Although we raised the Big Piece to within  approximately  200 feet of
the surface of the ocean,  efforts to recover this object were unsuccessful as a
result of stormy weather conditions and resulting ocean turbulence.


                                       11
<PAGE>

                                RMS TITANIC, INC.


In August 1998, we recovered 70 objects and produced  approximately 350 hours of
videotape  footage during our fifth  expedition to the Titanic wreck site.  This
expedition, again undertaken in cooperation with Discovery Communications, Inc.,
produced  five  (5)  hours  of  television  programming  about  the  expedition,
including the  first-ever  live  broadcast from the Titanic wreck site and a one
(1) hour  Dateline  NBC  special  broadcast.  Among the  highlights  of the 1998
expedition was the successful recovery of the Big Piece and extensive mapping of
the Titanic and  portions of the wreck site  through the capture of thousands of
high resolution color digital photographs.

Our 1993, 1994, 1996 and 1998 Titanic  expeditions were also conducted  pursuant
to charter  agreements with IFREMER.  The objects  recovered in the 1993,  1994,
1996 and 1998  expeditions were  transported to a  privately-owned  conservation
laboratory  in  France  for  restoration   and/or   preservation   processes  in
preparation  for  exhibition,  except for the Big Piece,  with  respect to which
conservation  processes  have  been  ongoing  while  on  exhibit  as part of our
exhibition of Titanic artifacts in the United States.

During 1997 through the date of this report,  exhibitions  of objects  recovered
from the Titanic were presented in Norfolk,  Virginia  (which opened in November
1996 and was presented until March 31, 1997); in Memphis,  Tennessee (from April
3, 1997 to September 30, 1997), Hamburg,  Germany (from May 8, 1997 to September
30,  1998);  at the Queen Mary in Long Beach,  California  (from May 31, 1997 to
March 21, 1999); St. Petersburg, Florida (from November 15, 1997 through May 31,
1998);  Boston,  Massachusetts  (from July 1, 1998 through  November 30,  1998);
Zurich,  Switzerland  (from  November 11, 1998  through May 9, 1999);  St. Paul,
Minnesota  (from January 1, 1999 through May 9, 1999);  Several  cities in Japan
(from July 24, 1998 through July 31, 1999);  and Atlantic City, New Jersey (from
May 29, 1999 through September 7, 1999).

We have granted a subsidiary of SFX Entertainment,  Inc. the exclusive worldwide
rights to present exhibitions of our Titanic artifacts  commencing September 14,
1999 for a one-year period, subject to extension for four (4) additional periods
of one year each, in consideration of minimum payments of $8.5 million per year.

RESULTS OF OPERATIONS

Three months ended November 30, 1999 compared to three months ended November 30,
1998

During the three months ended  November 30, 1999,  our revenues were  $1,882,346
compared to $1,179,796 for the same period of 1998, which represents an increase
of $702,550,  or 60%. This  increase was primarily  attributed to an increase in
exhibition fees.

Revenues  from  exhibitions  were  $1,881,303  compared to $991,008 for the same
period of 1998, which represents an increase of $890,295,  or 90%. This increase
was primarily  attributable  to  differences  in the timing of our receipts from
exhibitions  and the extent of our exhibition  activities  during the respective
fiscal periods.  In addition,  revenue from our exhibition in Atlantic City, New
Jersey during the three months ended November 30, 1999 was substantially greater
than revenue from our exhibition in Boston,  Massachusetts during same period of
1998,  while our revenue from our exhibition in Zurich,  Switzerland  during the
three month period ended November 30, 1999 was  substantially  less than revenue
from our Hamburg, Germany exhibition during the same period the previous year..

Licensing  fees  decreased  $11,550 for the three months ended November 30, 1999
compared to the three month period ended  November 30, 1998.  This  decrease was
the result of the  forgiveness  of certain  licensing  fees  which  amounted  to
approximately $12,500.

Merchandise and other revenues for the three months ended November 30, 1999 were
$9,850  compared to $118,694  for the same period of 1998,  which  represents  a
decrease  of $108,844 or 1,100%.  This  decrease  was  primarily  attributed  to
heightened  interest in Titanic  products  during the quarter ended November 30,
1998,  at which time  occurred  the release of the feature  film  "Titanic."  In
addition, during this same quarter, we received revenue from a book published in
conjunction with unrelated third parties.


                                       12
<PAGE>

                                RMS TITANIC, INC.


The sale of coal was  $2,743  for the  three  months  ended  November  30,  1999
compared to $70,094 for the same period a year ago, which  represents a decrease
of $67,351 or 2,460%.  This decrease was the result of less emphasis on sales of
coal on our Internet site and our retail efforts through third parties.

Costs  associated  with coal sold remained the same as a percentage of sales and
was in line with the dollar volume of sales  decreases.  The cost of merchandise
sold as a percentage of sales  increased  from 30% of sales for the period ended
November 30, 1998 to 75% of sales for the same period of 1999. This increase was
associated with discounts and mark downs of our merchandise in the quarter ended
November 30, 1999 as our strategy focused less on retail outlets.

General and  administrative  expenses  were  $659,532 for the three month period
ended  November  30, 1999 as  compared to $488,901  for the same period on 1998,
which  represents  an increase of $170,631 or 35%.  This  increase was primarily
attributed to increases in conservation expenses associated with the restoration
of artifacts of  approximately  $120,000 and an increase in officer  salaries of
$120,000.  These expenses were offset by reduced legal and professional  fees of
approximately  $55,000 and freight costs of approximately  $15,000 for the three
month period ended November 30, 1999 as compared to the same period of 1998.

Depreciation and amortization costs increased  $15,745,  or 20% from $79,115 for
the three month period ended November 30, 1998 to $94,860 for the same period in
1999. This increase is attributed to an increase in capital  expenditures during
1999. Capital  expenditures for property and equipment increased by $165,517 for
the nine month period ended November 30, 1999.

Interest  income was $35,502 for the three month period ended  November 30, 1999
as compared to $11,581 for the same period of 1998, which represents an increase
of $23,921,  or 207%. This increase was the result of additional interest earned
on our cash reserves.  Cash and cash equivalents were $3,641,530 at November 30,
1999 as compared to $998,555 at November 30, 1998.

Net income from was $472,937 for the three month period ended  November 30, 1999
as compared to $358,983 for the prior year period.  This  represents an increase
of $113,954 or 32%,  which was  primarily  attributed to increases in exhibition
revenues.


Nine months ended  November 30, 1999 compared to nine months ended  November 30,
1998

During the nine months ended  November 30, 1999,  our revenues  were  $4,619,051
compared to $8,384,914 for the same period of 1998,  which represents a decrease
of $3,765,863,  or 82%. This decrease was primarily  attributed to a decrease in
licensing fee revenue.

Licensing  fees  decreased  $3,476,828  compared to the nine month  period ended
November 30, 1998. This decrease was the result of a lack of licensing  revenues
in fiscal 2000 for  expedition to the Titanic wreck site.  During the nine month
period  ended  November  30,  1998,  we earned  licensing  fees  related  to the
production and  exploitation of audio and visual  recordings with respect to our
expeditions to the Titanic wreck site during the summer of 1998.
We did not conduct an expedition to the Titanic wreck in 1999.

Revenues  from  exhibitions  were  $4,378,818  for the nine month  period  ended
November  30, 1999  compared to  $4,161,538  for the same period of 1998,  which
represents  an  increase  of  $217,280,  or  5%.  This  increase  was  primarily
attributable  to differences in the timing of our receipts from  exhibitions and
the extent of our exhibition activities during the respective fiscal periods.

Merchandise  and other revenues for the nine months ended November 30, 1999 were
$210,462  compared to $548,225 for the same period of 1998,  which  represents a
decrease  of  $337,763  or 160%.  This  decrease  was  primarily  attributed  to
heightened  interest  in Titanic  products  during the nine month  period  ended
November  30,  1998,  at which time  occurred  the release of the  feature  film
"Titanic." In addition, during this same period, we received revenue from a book
published in conjunction with unrelated third parties.


                                       13
<PAGE>

                                RMS TITANIC, INC.


The sale of coal was  $25,008  for the  nine  months  ended  November  30,  1999
compared to $193,560 for the same period a year ago, which represents a decrease
of $168,552 or 674%.  This  decrease was the result of less  emphasis on selling
coal on our Internet site and our retail efforts through third parties.

Costs  associated  with coal sold and  merchandise  sold  remained the same as a
percentage of sales and were in line with the dollar  volume of sales  decreases
for the nine month periods ended November 30, 1999 and 1998.

General and  administrative  expenses were  $1,926,309 for the nine month period
ended  November 30, 1999 as compared to $1,353,680  for the same period of 1998,
which represents an increase of $572,629 or 42%. This increase was attributed to
increases in exhibition costs,  conservation expenses,  management compensation,
and accounting costs.  Exhibition costs increased approximately $160,000 for the
nine month  period  ended  November  30, 1999 as compared to the same period the
previous  year.  This  increase was  primarily  attributable  to the  geographic
locations of the exhibits. Conservation expenses associated with the restoration
of artifacts  increased $80,000 for the corresponding  periods of 1999 and 1998.
During the nine month period ended  November  30, 1999  management  compensation
increased approximately $340,000 as compared to the same period of 1998.

Depreciation and amortization costs increased $80,908,  or 49% from $164,565 for
the nine month period ended November 30, 1998 to $245,473 for the same period in
1999. This increase was attributed to an increase in capital expenditures during
1999. Capital  expenditures for property and equipment increased by $165,517 for
the nine month period ended November 30, 1999.

During the nine months ended November 30, 1998, we incurred  $1,845,000 of costs
related  to  vessel  and  equipment   chartering  related  to  our  audio-visual
licensee's  requirements  for the  Summer of 1998  expedition.  During  the nine
months  ended  November  30, 1998,  we recorded an  impairment  loss of $150,000
attributable  to  exhibitry  equipment  related  to our  exhibition  of  Titanic
artifacts in Hamburg, Germany based upon the determination that certain items of
exhibitry would not be utilized in the planned  re-location and  presentation of
the  Hamburg  exhibition  in  Zurich,  Switzerland  commencing  in the middle of
November 1998.

Interest income was $65,844 for the nine month period ended November 30, 1999 as
compared to $37,792 for the same period of 1998, which represents an increase of
$28,052,  or 174%. This increase was the result of additional interest earned on
our cash reserves.  Cash and cash  equivalents  were  $3,641,530 at November 30,
1999 as compared to $998,555 at November 30, 1998.

Net income was  $1,313,260  for the nine month period ended November 30, 1999 as
compared to $2,938,037 for the prior year period.  This represents a decrease of
$1,624,777  or 124%,  which was  primarily  attributed  to a lack of license fee
revenues for the nine months ended November 30, 1999.


LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents  increased by $2,921,601 to $3,641,530 at November
30, 1999 from $719,929 at November 30, 1998. At November 30, 1999 we had working
capital of  $1,653,136,  and a current  ratio of 1.4,  compared  to  $563,422 in
working  capital at November 30, 1998,  and a current  ratio of 1.2. The primary
source of cash received during the nine month period ended November 30, 1999 was
$2,957,591 generated from operations.

Our capital  commitments  during our 2000 fiscal year include lease payments for
our principal  offices,  and compensation to our executive  officers and general
counsel.

In addition, in order to maintain our salvor-in-possession status we must, among
other  things,  maintain a  reasonable  presence  at the Titanic  wreck  through
periodic  expeditions.  We will be  required  to  incur  the  costs  for  future
expeditions so as to maintain our  salvor-in-possession  status.  Our ability to


                                       14
<PAGE>

                                RMS TITANIC, INC.


undertake  future  expeditions  may be dependent  upon our cash reserves and the
availability  of  financing  from the grant of  licenses  to produce  television
programming and/or the grant of expedition  sponsorship rights,  however,  there
are no assurances that such financing will be available on satisfactory terms.

Our  near  term  operating  needs  will  be  financed  principally  through  our
exhibition tour agreement with a subsidiary of SFX Entertainment,  Inc, pursuant
to which we 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 RMS Titanic, Inc. of $8.5 million.

Substantially  all of the our cash flow  derives from our  operating  activities
during the nine month period ended November 30, 1999.  None of the our cash flow
during this period was derived from  financing  activities,  with  approximately
$36,000 used in investing activities.

The Company's  bank has stopped  honoring  checks and froze all funds on deposit
until the  dispute  among the  directors  as  described  in Part II,  Item 1, is
resolved or otherwise settled. In addition, SFX has notified the Company it will
not tender the  $2,000,000  due for the last  quarter of 1999 until the  dispute
among current and former  directors is resolved or settled.  The bank's decision
to freeze funds and SFX's decision to defer funding of the $2,000,000 payment is
having  an  adverse  effect  on the  Company's  available  working  capital  and
short-term liquidity.

YEAR 2000 ISSUES

As of the date hereof,  we are not aware of any Year 2000 issues  involving  our
internal software or computer systems.

CURRENCY FLUCTUATIONS

In connection with our business  activities outside of the United States, we are
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,  our potential revenues from exhibition and
merchandising  activities  outside  of  the  United  States  will  be  adversely
affected.  During the nine month period ended  November 30, 1999,  there were no
significant   fluctuations  in  the  exchange  rates  with  respect  to  foreign
currencies in which we transact  business.  Although our 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,  we
have sought and will  continue  to seek to base our  financial  commitments  and
understandings   upon  the  United  States  dollar  in  our  material   business
transactions  so as  to  minimize  the  adverse  potential  effect  of  currency
fluctuations.


                                       15
<PAGE>

                                RMS TITANIC, INC.

                                     PART II

                                OTHER INFORMATION
                                -----------------

Item 1 - Legal Proceedings
--------------------------

         On December 15, 1999,  RMS Titanic,  Inc.,  Arnie Geller and G. Michael
Harris commenced an action in the Supreme Court of the State of New York, in and
for the County of New York, under Index No. 605625/99 (the "New York Action").

         Contemporaneously  with the filing of the  summons and  complaint,  the
plaintiffs  obtained a temporary  restraining  order pending a motion brought by
plaintiffs  for a  preliminary  injunction  to enjoin  defendants  Allan Carlin,
George Tulloch,  Kurt Hothorn and Paul Henri Nargeolet from interfering with the
business of plaintiff RMS Titanic,  Inc. Arnie Geller and G. Michael Harris were
two of the six directors prior to November 26, 1999.

         Prior to November  26,  1999,  plaintiffs  Arnie  Geller and G. Michael
Harris; Harris and defendant Allan Carlin, George Tulloch, Kurt Hothorn and Paul
Henri  Nargeolet were all directors of plaintiff RMS Titanic,  Inc. The New York
Action was commenced with the filing of a summons and complaint on the 15th days
of December, 1999.
The plaintiffs in the New York Action complaint had six causes of action:

(a)  A cause of action for a  permanent  injunction  enjoining  defendants  from
     interfering with the business of plaintiff RMS Titanic, Inc.;

(b)  A cause of action for declaratory  judgment declaring that plaintiffs Arnie
     Geller and G.  Michael  Harris are the sole  directors  of the  corporation
     pursuant  to a majority  written  consent  signed on November  26th,  which
     majority consent was signed either by shareholders or signed as proxies;

(c)  A cause of action  for  declaratory  judgment  adjudging  that a  purported
     warrant or option given by plaintiff RMS Titanic,  Inc. to defendant  Allan
     Carlin in 1994 to purchase  500,000  shares of common stock of RMS Titanic,
     Inc. at an exercise price of $1.25 per share was never legally extended. In
     investigating  the matter,  it was  discovered  that on a computer disk the
     extension was prepared sometime in June because of the time sequence of the
     previous  documents  on the  disk  and the  subsequent  documents.  It also
     appears that George Tulloch,  a sole director of the corporation,  signed a
     unanimous  directors  consent in June 1999 and said  directors  consent was
     transmitted by George Tulloch in Hawaii to the New York office;

(d)  A cause of action for an accounting  against defendant Allan Carlin for the
     monies  paid  to  him  for  the  period  commencing  January  1,  1996  and
     thereafter;

(e)  A cause of action for a judgment  against  defendant Allan Carlin directing
     him to deliver the physical assets to plaintiff RMS Titanic, Inc; and

(f)  A cause of action for a judgment against defendant George Tulloch directing
     him to deliver the physical assets to plaintiff RMS Titanic, Inc.

         Unbeknownst to plaintiffs,  defendants on December 13, 1999,  commenced
an action in the United States District Court for the District of Connecticut by
the filing of a summons and complaint (the  "Connecticut  Action") against Arnie
Geller, G. Michael Harris, John A. Joslyn, Westgate Entertainment Corp., William
S.  Gasparrini,  Jon Thompson,  P. David Lucas,  Steven P.  Sybesma,  Joe Marsh,
Stanley Thomas, Tag Acquisition, LLC, Michael T. Cronin, Johnson, Blakely, Pope,
Bokor,  Ruppel & Burns,  P.A., John Hill,  James Jill,  Shirley Hill, Anne Hill,
Fairline  Limited and Financial Group of Kuwait (the  "Connecticut  Complaint").
The  Connecticut  Action  was  filed  under  file No.  399CV2401  (Judge  Hall).
Defendants Geller, Harris, Joslyn,  Gasparrini,  Thompson, Lucas, Sybesma, Marsh
and  Thomas  signed a Schedule  13D,  which was filed  with the  Securities  and


                                       16
<PAGE>

                                RMS TITANIC, INC.


Exchange  Commission  ("SEC") on November 26, 1999. The other  defendants are as
follows:

         Michael  T.  Cronin is a partner in the law firm of  Johnson,  Blakely,
Pope,  Bokor,  Ruppel & Burns,  P.A., a Florida law firm located in  Clearwater,
Florida. The law firm is also a defendant.

         Defendants  John  Hill,  James  Hill,  Shirley  Hill and Anne  Hill are
members of the Hill family,  which gave  irrevocable  proxies to defendant Arnie
Geller.

         Defendants   Fairline  Limited  and  Financial  Group  of  Kuwait  gave
defendants a proxy.

         The Connecticut  plaintiffs,  which are the New York defendants,  named
RMS Titanic, Inc. as plaintiff in the Connecticut Action.

         The  complaint in the  Connecticut  Action  contained  eleven causes of
action:

(a)  The first cause of action  alleged a claim under ss.13(d) of the Securities
     Exchange Act of 1934 and Rule 13(d) promulgated thereunder.  See pp.52 - 56
     of the complaint.  Plaintiff seek legal and equitable  relief setting aside
     the actions taken by defendants  and a judgment  declaring the  Connecticut
     plaintiffs to be directors and  management,  and enjoining  defendants from
     voting their shares.

(b)  The  second  cause  of  action  is a claim  under  ss.14(d)  and (f) of the
     Securities  Exchange  Act of 1934,  as  amended,  and  Rule 14  promulgated
     thereunder.

(c)  The third cause of action seeks a declaratory  judgment  adjudging that the
     Connecticut  defendants acted without a majority of the outstanding  shares
     because of violation of ss.13(d)  and ss.14(a) of the  Securities  Exchange
     Act.

(d)  The fourth cause of action is for common law fraud.

(e)  The fifth cause of action is for breach of fiduciary duty.

(f)  The sixth cause of action alleges a violation of stipulated  judgment dated
     December 10, 1996 and agreement and stipulation dated March, 1999.

(g)  The seventh  cause of action is for unlawful  entry and detainer  under New
     York law.

(h)  The eighth cause of action seeks declaratory relief alleging  violations of
     Florida Corporation Law regarding proxies, consents by shareholders without
     a meeting and control-share acquisitions.

(i)  The ninth cause of action seeks recovery under the  Racketeering  Influence
     and Corrupt Organization Act under ("RICO") based on RICO.

(j)  The  tenth  cause  of  action  is a cause of  action  under  RICO  under 18
     U.S.C.ss.1962(d).

(k)  The eleventh  cause of action seeks  relief  under the  Connecticut  Unfair
     Trade Practices Act.

         On December 21, 1999, the hearing of the preliminary  injunction in the
New York  Action was heard by Judge  Cozier.  Judge  Cozier  stated the New York
defendants  are the  Connecticut  plaintiffs  who put in  answering  papers  the
complaint,  together  with  a  copy  of  the  New  York  defendants'  motion  in
Connecticut  for a  preliminary  injunction  returnable  January 7, 2000 with an
order of  expeditious  discovery.  Judge Cozier said that because they filed the
papers two days before the New York  Action,  and dispute the offices are in New
York,  Judge Cozier  denied the motion and stated that the matter would be heard
in Connecticut.


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<PAGE>

                                RMS TITANIC, INC.


         On  January  7,  2000,  the  evidentiary  hearing  for the  Connecticut
plaintiffs'  motion for  preliminary  injunction was commenced.  Judge Hall only
heard two witnesses  and  adjourned  the matter to Wednesday,  January 12, 2000.
However,  Judge Hall  recused  as the judge  from the case.  The reason for such
recusal is  unknown.  Judge  Underhill,  a member of the  Federal  Court for the
District of Connecticut,  was substituted.  Judge Underhill referred the case to
Magistrate  Garfinkel  who is  attempting  to have  all  parties  resolve  their
differences.  The parties are currently in settlement negotiations.  The failure
to reach a  definitive  settlement  agreement  on a  timely  basis  will  have a
material adverse effect on the Company.

Item 4 - Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         Effective  November 26, 1999,  through an Action by Written  Consent of
Stockholders  holding the majority of the voting rights for  outstanding  common
stock, George A. Tulloch, Allan H. Carlin, Kurt Hothorn and Paul Henri Nargeolet
were  removed as directors  of the Company  leaving  Arnie Geller and G. Michael
Harris as the remaining two directors.  Stockholders holding voting rights for a
total  of  8,136,630  shares  consented.  See the  Form  8-K,  filed on or about
December 1, 1999.

         In an attempt to resolve the litigation  matters described in Part II -
Item 1 above,  preliminary  proxy  materials were filed with the SEC on December
29, 1999,  relating to a special  meeting of  shareholders.  The purpose of this
special  meeting of  shareholders  is to ratify the removal of Mr.  Carlin,  Mr.
Tulloch, Mr. Hothorn and Mr. Nargeolet and to elect Mr. Harris, Mr. Geller and a
new nominee as directors. On January 10, 2000, the staff issued a comment letter
regarding  preliminary  proxy  materials.  The issuer's  response to the comment
letter and timing of this  special  meeting is  dependent  upon the  whether the
parties are able to enter a definitive and final settlement  agreement regarding
the Connecticut and New York litigation referred to in Item 1 above.

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

     (a)  None

     (b)  See the Form 8-K filed on or about December 1, 1999.


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<PAGE>

                                RMS TITANIC, INC.


                                   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 19, 2000             By: /s/ Arnie Geller
                                      ---------------------------------------
                                      Arnie Geller, Principal Executive Officer



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