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UNITED
STATES  SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM
10-Q/A  Amendment No. 1
 
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
   PREMIER EXHIBITIONS, INC.  (Exact name of registrant as specified in its charter)
 Florida
    
    20-1424922(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer Identification No.)
 3340 Peachtree Road, Suite 2250, Atlanta, GA
    
    30326(Address of principal executive offices)
    
    (Zip Code)
 (404) 842-2600(Registrants telephone number, including area code)
 X
  Large accelerated filer ___
    
    Accelerated filer ___
    
    Non-accelerated filer X
 X




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TABLE OF CONTENTS
  
 PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis ofFinancial Condition and Results of Operations
    
    
    9Results
of Operations
    
    
    12Signatures
    
    
    23Index to Exhibits
    
    
    24




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EXPLANATORY
NOTE
       As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  May 31, 2006Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    3,435,000
    
    
    
    3,286,000
    
    
    
    (149,000
    )Deferred income taxes(3)
    
    
    1,384,000
    
    
    
    1,795,000
    
    
    
    411,000Accumulated deficit
    
    
    (6,643,000
    )
    
    
    (7,260,000
    )
    
    
    (617,000
    )Consolidated Statements of Operations  for the year ended May 31, 2006Depreciation and amortization(1)
    
    
    330,000
    
    
    
    347,000
    
    
    
    17,000Provision (benefit) for income taxes(3)
    
    
    716,000
    
    
    
    709,000
    
    
    
    (7,000
    )Net income
    
    
    1,074,000
    
    
    
    1,064,000
    
    
    
    (10,000
    )Diluted income (loss) per common share
    
    
    0.04
    
    
    
    0.03
    
    
    
    (0.01
    )Consolidated Statements of Cash Flows  for the year ended May 31, 2006Depreciation and amortization(1)
    
    
    330,000
    
    
    
    347,000
    
    
    
    17,000Increase (decrease) in deferred income taxes(3)
    
    
    716,000
    
    
    
    709,000
    
    
    
    (7,000
    )EX-31.1EX-31.2EX-32.1




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PART I
 FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS.




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Premier Exhibitions, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 February 28,
    
    
    May 31,2006
    
    
    2006(Restated)
    
    
    (unaudited)(Restated)AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,129,000
    
    
    $
    2,465,000Marketable securities
    
    
    570,000
    
    
    
    528,000Accounts receivable
    
    
    1,585,000
    
    
    
    4,559,000Prepaid expenses and other current assets
    
    
    3,458,000
    
    
    
    4,264,000Total current assets
    
    
    9,742,000
    
    
    
    11,816,000Artifacts owned, at cost
    
    
    4,476,000
    
    
    
    4,476,000Salvors lien
    
    
    1,000
    
    
    
    1,000Property and equipment, net
    
    
    2,033,000
    
    
    
    2,945,000Exhibition licenses, net
    
    
    3,475,000
    
    
    
    3,286,000Deferred income taxes
    
    
    2,504,000
    
    
    
    1,795,000Other assets
    
    
    132,000
    
    
    
    111,000$
    22,363,000
    
    
    $
    24,430,000Liabilities and Shareholders EquityCurrent liabilities:Accounts payable and accrued liabilities
    
    
    1,038,000
    
    
    
    1,660,000Deferred revenue
    
    
    300,000
    
    
    
    Notes payable
    
    
    1,350,000
    
    
    
    1,358,000Total current liabilities
    
    
    2,688,000
    
    
    
    3,018,000Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:Common stock; $.0001 par value; authorized 40,000,000 shares;
issued and outstanding 26,062,089 and 26,778,728 shares
at February 28, 2006 and May 31, 2006, respectively
    
    
    3,000
    
    
    
    3,000Common stock payable
    
    
    920,000
    
    
    
    14,000Additional paid-in capital
    
    
    27,178,000
    
    
    
    28,793,000Accumulated deficit
    
    
    (8,324,000
    )
    
    
    (7,260,000
    )Accumulated other comprehensive income (loss)
    
    
    (102,000
    )
    
    
    (138,000
    )Total shareholders equity
    
    
    19,675,000
    
    
    
    21,412,000$
    22,363,000
    
    
    $
    24,430,000
  2




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Premier Exhibitions, Inc. and Subsidiaries
 
 Consolidated Statements of Operations
(Unaudited)
 Three Months Ended May 31,2005
    
    
    2006(Restated)
    
    
    (Restated)Revenue:Exhibition revenues
    
    $
    2,393,000
    
    
    $
    5,460,000Merchandise and other
    
    
    92,000
    
    
    
    328,000Sale of coal
    
    
    47,000
    
    
    
    36,000Total revenue
    
    
    2,532,000
    
    
    
    5,824,000Cost of revenue:Exhibition costs
    
    
    796,000
    
    
    
    1,105,000Cost of merchandise sold
    
    
    12,000
    
    
    
    56,000Cost of coal sold
    
    
    7,000
    
    
    
    4,000Total
cost of revenue (exclusive of depreciation shown separately below)
    
    
    815,000
    
    
    
    1,165,000Gross profit
    
    
    1,717,000
    
    
    
    4,659,000Operating expenses:General and administrative
    
    
    1,091,000
    
    
    
    2,198,000Depreciation and amortization
    
    
    91,000
    
    
    
    347,000Litigation settlement
    
    
    
    
    
    
    350,000Loss on sale of fixed assets
    
    
    84,000
    
    
    
    Total operating expenses
    
    
    1,266,000
    
    
    
    2,895,000Income from operations
    
    
    451,000
    
    
    
    1,764,000Other income and expenses:Interest income
    
    
    4,000
    
    
    
    32,000Interest expense
    
    
    (17,000
    )
    
    
    (34,000
    )Other income
    
    
    
    
    
    
    11,000Total other income and expenses
    
    
    (13,000
    )
    
    
    9,000Income before provision for income taxes
    
    
    438,000
    
    
    
    1,773,000Provision (benefit) for income taxes
    
    
    
    
    
    
    709,000Net income
    
    $
    438,000
    
    
    $
    1,064,000Net income per share:Basic income per common share
    
    $
    0.02
    
    
    $
    0.04Diluted income per common share
    
    $
    0.02
    
    
    $
    0.03Shares used in basic per share calculations
    
    
    22,299,939
    
    
    
    26,344,856Shares used in diluted per share calculations
    
    
    24,949,939
    
    
    
    30,465,215
  3




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Premier Exhibitions, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended May 31,2005
    
    2006(Restated)
    
    (Restated)Cash flows from operating activities:Net income
    
    $
    438,000
    
    
    $
    1,064,000Adjustments to reconcile net income to net cash
provided (used) by operating activities:Depreciation and amortization
    
    
    91,000
    
    
    
    347,000Issuance of compensatory stock options
    
    
    
    
    
    
    412,000(Increase) decrease in cost of artifacts
    
    
    (1,000
    )
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accounts receivable
    
    
    352,000
    
    
    
    (2,974,000
    )(Increase) decrease in deferred income taxes
    
    
    
    
    
    
    709,000(Increase) decrease in prepaid expenses and other current assets
    
    
    329,000
    
    
    
    (806,000
    )(Increase) decrease in other assets
    
    
    605,000
    
    
    
    21,000Increase (decrease) in deferred revenue
    
    
    (425,000
    )
    
    
    (300,000
    )Increase (decrease) in accounts payable and accrued liabilities
    
    
    (377,000
    )
    
    
    622,000Total adjustments
    
    
    574,000
    
    
    
    (1,969,000
    )Net cash provided (used) by operating activities
    
    
    1,012,000
    
    
    
    (905,000
    )Cash flows used by investing activities:Purchases of property and equipment
    
    
    (303,000
    )
    
    
    (1,070,000
    )Purchase of exhibition licenses
    
    
    (2,246,000
    )
    
    
    Net cash used by investing activities
    
    
    (2,549,000
    )
    
    
    (1,070,000
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    2,425,000
    
    
    
    342,000Principal payments on notes payable
    
    
    
    
    
    
    (333,000
    )Proceeds from option and warrant exercises
    
    
    64,000
    
    
    
    296,000Proceeds from sale of common stock
    
    
    500,000
    
    
    
    Net cash provided by financing activities
    
    
    2,989,000
    
    
    
    305,000Effects of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    6,000Net increase (decrease) in cash and cash equivalents
    
    
    1,452,000
    
    
    
    (1,664,000
    )Cash and cash equivalents at beginning of period
    
    
    1,258,000
    
    
    
    4,129,000Cash and cash equivalents at end of period
    
    $
    2,710,000
    
    
    $
    2,465,000Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    11,000
    
    
    $
    10,000
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PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
     2. Earnings Per Share Data
   5




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PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 Premier Exhibitions, Inc. and Subsidiaries
Computation of Net Income Per Share
 Three Months Ended May 31,2005
    
    2006(Restated)
    
    (Restated)Numerator:Net income
    
    $
    438,000
    
    
    $
    1,064,000Denominator:Basic weighted-average shares outstanding
    
    
    22,299,939
    
    
    
    26,344,856Effect of dilutive stock options & warrants
    
    
    2,650,000
    
    
    
    4,120,359Diluted weighted-average shares outstanding
    
    
    24,949,939
    
    
    
    30,465,215Net income per share:Basic
    
    $
    0.02
    
    
    $
    0.04Diluted
    
    $
    0.02
    
    
    $
    0.03
 3. Equity Transactions
    4. Legal Proceedings
  6




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PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Plastination Company v. Premier Exhibitions, Inc.
 Stefano Arts v. Exhibitions International, LLC, et. al.,
  RMS Titanic, Inc.
v. Georgette Alithinos, International
Advantage Inc. and Renaissance Entertainment, EPE
 5. Commitments
     6. Subsequent Events
   7




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PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Note 7. Restated Financial Statements
       As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  May 31, 2006Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    3,435,000
    
    
    
    3,286,000
    
    
    
    (149,000
    )Deferred income taxes(3)
    
    
    1,384,000
    
    
    
    1,795,000
    
    
    
    411,000Accumulated deficit
    
    
    (6,643,000
    )
    
    
    (7,260,000
    )
    
    
    (617,000
    )Consolidated Statements of Operations  for the year ended May 31, 2006Depreciation and amortization(1)
    
    
    330,000
    
    
    
    347,000
    
    
    
    17,000Provision (benefit) for income taxes(3)
    
    
    716,000
    
    
    
    709,000
    
    
    
    (7,000
    )Net income
    
    
    1,074,000
    
    
    
    1,064,000
    
    
    
    (10,000
    )Diluted income (loss) per common share
    
    
    0.04
    
    
    
    0.03
    
    
    
    (0.01
    )Consolidated Statements of Cash Flows  for the year ended May 31, 2006Depreciation and amortization(1)
    
    
    330,000
    
    
    
    347,000
    
    
    
    17,000Increase (decrease) in deferred income taxes(3)
    
    
    716,000
    
    
    
    709,000
    
    
    
    (7,000
    )
 
    8




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  9




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Introduction
  
    
    Overview of Our Business
    
    Key Exhibitions
    
    Results of Operations
    
    Liquidity and Capital Resources
    
    Off-Balance Sheet Arrangements
    
    Critical Accounting Policies
    
    Contractual Obligations
    
    Related Parties
    
    Recent Accounting Pronouncements
 Overview of Our Business
    10




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Key Exhibitions
 Titanic Exhibitions
   Bodies...The Exhibition and Bodies Revealed Exhibitions
    Co-Production Agreement
     11




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Results of Operations
 The Quarter Ended May 31, 2006 Compared to the Quarter Ended May 31, 2005
       12




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Liquidity and Capital Resources
      As of February 28 (29),
    
    
    May 31,(in thousands)
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006Working Capital
    
    $
    13
    
    
    $
    857
    
    
    $
    7,054
    
    
    $
    8,798Current Ratio
    
    
    1.01
    
    
    
    1.28
    
    
    
    3.62
    
    
    
    3.92
  14




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Off-Balance Sheet Arrangements
  Critical Accounting Policies
   
    
    Revenue recognition;
    
    Accounts receivables;
    
    Accounting for income taxes;
    
    Legal contingencies;
    
    Property and equipment;
    
    Impairment of long-lived and intangible assets; and
    
    Capitalizing exhibition license costs.
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Revenue Recognition
 Exhibition Revenue
 
    
    persuasive evidence of an exhibition arrangement with a customer exists;
    
    the exhibit is complete and, in accordance with the terms of the arrangement, has been delivered;
    
    the exhibition period of the arrangement has begun and/or the customer can begin its
exploitation, exhibition or sale;
    
    the arrangement fee is fixed or determinable; and
    
    collection of the arrangement fee is reasonably assured.
    Audio Tour Revenue
 Merchandise Revenue
 Sponsorship Revenue
 Licensing Revenue
 19




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Accounts Receivable
  Accounting for Income Taxes
   Legal Contingencies
  Property and Equipment
  Impairment of Long-Lived Assets and Other Intangibles
   20




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Accounting Policy for Capitalizing Exhibition
License Costs
     Recent Accounting Pronouncements
      21




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SIGNATURES
  PREMIER EXHIBITIONS, INC.Dated:
October 2, 2006
    
    By:
    
    /s/ Arnie GellerArnie Geller, Presidentand Chief Executive OfficerDated:
October 2, 2006
    
    By:
    
    /s/ Stephen CoutureStephen Couture, Vice Presidentand Chief Financial Officer
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INDEX TO EXHIBITS
 Exhibit
    
    
    
    Location31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
Officer
    
    Filed herewith31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Vice President
And Chief Financial Officer
    
    Filed herewith32.1
    
    Section 1350 Certifications.
    
    Filed herewith
 24