U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED FEBRUARY 29, 2000

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

                       For the transition period from       to
                                                     -------   ------
                          Commission File No. 000-24452

                                RMS TITANIC, INC.
                                ----------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

                  401 Corbett Street, Clearwater, Florida 33756
                  ---------------------------------------------
                    (Address of principal executive offices)

     Issuer's telephone number, including area code: (727) 443-1912

     Securities registered pursuant to Section 12(b) of the Act: None

Securities  registered  pursuant to Section 12(g) of the Act: Common Stock,  par
value $.0001 per share

         Check whether the issuer (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
                     ---  ---

         Check  if  disclosure  of  delinquent  filers  pursuant  to Item 405 of
Regulation S-K is not contained herein,  and will not be contained,  to the best
of  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ].

         The aggregate  market value of the voting stock held by  non-affiliates
of the Registrant, as of June 1, 2000, was: $22,946,716.

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of June 1, 2000, were:

                                                     NUMBER OF SHARES
            TITLE OF EACH CLASS                        OUTSTANDING

            Common Stock, par value $.0001
            per share                                  16,187,128


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DOCUMENTS INCORPORATED BY REFERENCE: The registrant's definitive proxy statement
to be filed pursuant to Regulation 14A or definitive information statement to be
filed pursuant to Regulation 14C.

              SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE
                    SECURITIES LITIGATION REFORM ACT OF 1995

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 that involve certain risks and uncertainties.  The
Company's   actual  results  or  outcomes  may  differ   materially  from  those
anticipated.  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  the  Report  will  prove  to be
accurate.   In  light  of  the   significant   uncertainties   inherent  in  the
forward-looking  statements  included  herein,  such  information  should not be
regarded as a representation by the Company that the objectives and plans of the
Company will be achieved.

ITEM 1.  BUSINESS

         BACKGROUND

On May 4, 1993,  RMS Titanic,  Inc.  acquired all the assets and assumed all the
liabilities of Titanic  Ventures  Limited  Partnership  ("TVLP"),  a Connecticut
limited  partnership  (the  "Acquisition").  References to the "Company" in this
Report relate to TVLP prior to the Acquisition and the combined entities of TVLP
and RMS Titanic, Inc. after the Acquisition.

Pursuant  to a judgment  entered in the Federal  District  Court for the Eastern
District   of   Virginia   on  June  7,   1994,   the   Company   was   declared
salvor-in-possession  of the  vessel  RMS  Titanic  ("Titanic"),  the  sole  and
exclusive  owner of any  items  recovered  from the  Titanic  and so long as the
Company is 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. In March
1999,  the United  States Court of Appeals for the Fourth  Circuit  affirmed the
Company's status as  salvor-in-possession,  however,  it reversed the portion of
the 1996  decision that the Company could exclude other parties from viewing and
photographing  the Titanic  site.  The United States  Supreme Court  declined to
review the Company's appeal of this decision.

The  Company  was 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.  This  location  is
approximately 400 miles off the coast of Newfoundland.  The Company has obtained
oceanic  material and  scientific  data  available in various forms that include
still and moving photography and artifacts from the wreck site; and is utilizing
this data and artifacts for historical  verification,  scientific  education and
public awareness.  All these activities are directed toward producing income for
the company that include touring exhibitions,  television programs and the sales
of still photographs.

In August  1987,  the Company  contracted  with the  Institute of France for the
Research and Exploitation of the Sea  ("IFREMER"),  which is owned by the French
Government, to conduct an expedition and dive to the wreck of the Titanic. Using
state-of-the-art  technology  of  IFREMER,  the world's  largest,  oceanographic
institute,  approximately  sixty days of research and recovery  operations  were
performed  at the  Titanic  wreck  site in  1987  through  the  use of a  manned
submersible  NAUTILE.  Approximately  1,800  objects were  recovered  during the
course of the thirty-two dives in that expedition.

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The recovered  objects were  conserved and  preserved by  Electricite  de France
("EDF"),  the French  government-owned  utility.  In addition to the recovery of
historic objects, the Company's 1987 expedition also produced  approximately 140
hours of videotape  footage and an estimated  7,000 still  photographs  from the
wreck site.

In June 1993, the Company  successfully  completed its second  expedition to the
Titanic wreck site,  during which it recovered  approximately  800 artifacts and
produced  approximately  105 hours of  videotape  footage  during  the course of
fifteen  dives.  In July 1994,  the  Company  recovered  over 1,000  objects and
produced   approximately  125  hours  of  videotape  footage  during  its  third
expedition to the Titanic wreck site, In August 1996,  the Company  recovered 74
objects and produced  approximately  125 hours of videotape  footage  during its
fourth expedition to the Titanic wreck site.

With the Company's cooperation,  Discovery  Communications,  Inc. produced three
hours  of  television  programming  based  upon  the  Company's  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.
Although the Company raised the "Big l Piece" to within  approximately  200 feet
of the surface of the ocean,  efforts to recover it were unsuccessful because of
stormy weather conditions and severe ocean turbulence.

In August 1998, the Company recovered 70 objects and produced  approximately 350
hours of videotape  footage  during its fifth  expedition  to the Titanic  wreck
site.  This   expedition,   again   undertaken  in  cooperation  with  Discovery
Communications,  Inc.,  produced five hours of television  programming about the
expedition,  including the first-ever live broadcast from the Titanic wreck site
and a one 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.

The Company's 1993, 1994,  1996, and 1998 Titanic  expeditions were completed by
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  preservation  processes in preparation
for exhibition,  except for the "Big Piece", that is using on-going conservation
processes  while on exhibit as part of the  Company's  exhibition of its Titanic
artifacts in the United States.


         PLAN OF OPERATIONS

The Titanic  continues to captivate the thoughts and  imagination of millions of
people  throughout  the world since 1912,  when it struck an iceberg and sank in
the North  Atlantic,  causing  the loss of more than 1,500 of the 2,228 lives on
board.  The  depth  of this  international  interest  in the  Titanic  has  been
continuous since its sinking more than eighty-five  years ago. The December 1997
release of the highest  grossing motion picture of all time,  "Titanic," as well
as by a prodigious  volume of works that have been published about all facets of
its story,  the  production of other  feature  length movies and plays about its
tragic voyage, and the broadcast of television programs about its 1985 discovery
and scientific  examinations of the wreck  approximately  two and one-half miles
below the surface of the ocean attests to the public's continuing fascination in
the Titanic.  As the only enterprise that has recovered and conserved items from
the  Titanic,  the  Company is in a unique  position to present  exhibitions  of
Titanic artifacts for viewing by the public.  Management  intends to continue to
present exhibitions throughout the world as demand for these tours is warranted.

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Management  will also continue to conduct these  exhibitions in an  enlightening
and dignified manner that embodies respect for those who lost their lives in the
disaster.

The  principal  sources of revenues of the Company have been payment  guarantees
for  attendance,  ticket  sales  for  admission  to  exhibitions,  merchandising
revenues, licensing revenues and sponsorship revenues.

The Company intends to keep the artifacts recovered from the Titanic together as
a  "collection"  and make them  available for  exhibition to the public.  In its
charter  agreements with IFREMER,  the Company has agreed that its collection of
artifacts  would  not be  sold  by  the  Company  to an  individual  or  private
collector.  However,  if it becomes  necessary  to protect the  interests of the
Company, all of the artifacts, as a collection,  could be sold to an entity that
would make them  available for  exhibition to the public  providing  such a sale
complied with our agreements with IFREMER.  Within these  agreements,  artifacts
are defined as any object that was either a part of the Titanic or a  possession
of a person on board. Coins, coal, currency,  diamonds  (non-jewelry),  precious
metals,   and  gemstones  are  not  considered   artifacts  within  the  IFREMER
agreements.

         EXHIBITIONS

The Company has  presented  exhibitions  in  association  with third  parties in
cities in the United States, Europe, and Japan. The Company plans to continue to
present exhibition tours of Titanic artifacts in cities throughout the world.

Agreement with Subsidiary of SFX Entertainment, Inc.

In March 1999, we 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"),  in  which we  granted  SFX an
exclusive  worldwide license to exhibit our Titanic artifacts for the payment of
at least $8.5 million  annually.  This 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.  SFX has paid $6.5 million
at the present time with the last payment of $2,000,000  due June 14, 2000.  All
obligations of Magicworks Entertainment,  Inc. under this license agreement have
been guaranteed by SFX Entertainment, Inc.

Pursuant to the license agreement, we will receive sixty-five percent of ticket,
merchandise  and sponsorship  revenues,  after deduction of mutually agreed upon
project expenses. The $8.5 million annual guaranteed minimum payment is credited
against  our share of  revenues  from all  exhibitions  in excess of the project
expenses.  We have the  right  to  terminate  the  license  agreement  effective
September  14,  2001,  or annually  thereafter,  if there is a merger or sale of
majority control of the Company, or substantially all of its assets.

If we terminate this license agreement,  SFX will have the right to continue one
major exhibition,  containing no more than 200 Titanic artifacts and requires an
investment  by SFX of more than  $2,000,000,  until  September 14, 2004. We will
receive a minimum of $2,250,000 annually as consideration for this license. Upon
recoupment  of project  expenses,  we have the right to select and obtain  legal
title to 65% of the exhibitry built for all the  exhibitions  during the term of
this agreement.

In addition,  the license  agreement  provides  that the Company  shall  receive
twenty percent of the profits,  if any, from a current Titanic themed exhibition
in  Orlando,  Florida  presented  by SFX and third  parties.  An  officer of the
Company  who is a member of the Board of  Directors  is a related  party to this
exhibition. This exhibition predated his becoming an officer of the company.

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As  of  this  filing  date,  the  Company  was  in  negotiations  with  SFX  for
modification  of its existing  licensing  agreement for the next option  period.
Among the  modifications  being  discussed is a reduction in the minimum  annual
payment  required to be made by SFX and provide the Company with the opportunity
for a higher percentage of the net revenues from exhibitions.  To facilitate the
finalization of a modified agreement,  the Company has extended the notification
requirements  that SFX must  provide on its election of the next one year option
period.

From a period beginning in 1997 through the present time, exhibitions of objects
recovered from the Titanic were presented in association with the Company in the
following cities and countries: Norfolk, Virginia from November 1996 until March
1997;  Memphis,  Tennessee from April 1997 to September 1997;  Hamburg,  Germany
from May 1997 to  September  1998;  at the Queen Mary in Long Beach,  California
from May 1997 to March 1999;  in St.  Petersburg,  Florida from November 1997 to
May 1998;  in Boston,  Massachusetts  from July 1998 through  November  1998; in
Zurich,  Switzerland from November 1998 through May 1999; in St. Paul, Minnesota
from January 1999 through May 1999; a tour of several  cities in Japan from July
1998 through July 1999;  and in Atlantic City, New Jersey from May 1999 until It
concluded in September 1999.


Current Exhibitions

SFX presently has exhibits in Dallas, Texas; Chicago, Illinois; Orlando, Florida
and Las Vegas, Nevada.


Prior Exhibitions

         The Company's prior  exhibitions of its Titanic artifacts have included
the following:

         Prelude Exhibition at the National Maritime Museum

In October 1994, the Company and the National Maritime Museum opened
The Wreck of the  Titanic  exhibition  at the  National  Maritime  Museum.  This
exhibition,  which was presented as a prelude to the Company's planned worldwide
exhibition tour, concluded in October 1995. A record-breaking  number of people,
approximately  720,000,  visited the National Maritime Museum during the Prelude
Exhibition.

The Wreck of the Titanic  exhibition  featured the first major  presentation  of
artifacts  recovered from the debris field  surrounding  the Titanic wreck site.
Approximately 150 artifacts were exhibited in an area approximating 5,000 square
feet. This  exhibition,  which covered several themes,  including the history of
the Titanic,  searching for and discovering  the wreck,  the 1987, 1993 and 1994
recovery expeditions,  artifact conservation and preservation, and also included
a 4-meter model of the bow section of the wreck, a one-third  scale model of the
Nautile (the  high-technology  manned submersible used to explore the wreck site
and recover artifacts), and previously unseen footage of the wreck site.


         Memphis Exhibition

Following the Prelude Exhibition,  in 1996 the Company reached an agreement with
the City of Memphis,  Tennessee for the  presentation of a larger  exhibition of
Titanic artifacts in Memphis,  Tennessee from April 1997 through September 1997.
The Memphis  exhibition  displayed in themed  galleries more than 250 artifacts,
recovered  between  1987 and 1994 by the  Company,  in an area of  approximately
25,000 square feet,  including a bronze cherub, the ship's whistles, a steward's
jacket,  silver  dinnerware,  fine china,  gold coins,  jewelry,  delicate paper
objects such as a stock  certificate and personal  letters,  communications  and

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navigational gear, and a piece of one of Titanic's engines. This exhibition also
included an 18-foot  scale model of the Titanic,  replications  of a First Class
stateroom,  dining rooms,  Third Class and crew cabins and recreational areas of
the Titanic, the Marconi Room, and a model of the bow of the wreck.

Approximately  635,000  individuals  attended the Memphis  exhibition during the
six-month term of its presentation.

         Hamburg Exhibition

Pursuant to a agreement  with Cre-Co  Finanz GmbH ("CRE"),  a company  organized
under the laws of Germany,  an exhibition of approximately  300 of the Company's
Titanic  artifacts was held in  Speicherstadt,  the historic  maritime center of
Hamburg,  Germany,  from  May  1997  through  September  1998.  In  addition  to
displaying  objects  from  Titanic  and her  passengers  and crew,  the  Hamburg
exhibition  included  the first  opportunity  for the public to view the Titanic
bell, compass,  telegraph and safe together. The theme of the Hamburg exhibition
was an  interactive  presentation  of the  technological  advances  required  to
accomplish  the recovery and  conservation  of Titanic  artifacts,  and included
replicas of the First Class, Second Class and Third Class cabins, and a model of
the bow of the wreck. Approximately 1.1 million people attended this exhibition.

         St. Petersburg Exhibition

The objects  exhibited at the Memphis  exhibition and associated  exhibitry were
transported and installed in the Florida International Museum in St. Petersburg,
Florida  for  an   exhibition   presented   from  November  1997  to  May  1998.
Approximately 830,000 people attended this exhibition.

         Queen Mary Exhibition

The Company entered into an agreement with the RMS  Foundation,  Inc. to exhibit
artifacts,  expedition  equipment,  photographs  and film  footage from the 1996
Titanic  expedition  aboard the Queen Mary in Long Beach,  California  from June
1997 through March 1999 in an exhibition  entitled  "Titanic:  The  Expedition."
Approximately  thirty un-restored  artifacts recovered during the summer of 1996
expedition  (including  one of Titanic'  whistles,  a large  silver soup tureen,
binoculars in a leather case, and a porthole) and fourteen  conserved  artifacts
from  prior  expeditions  were  displayed  at the Queen  Mary,  together  with a
life-size  rendition  of the 20 ton section of the Titanic hull that the Company
sought to raise from the debris field  surrounding the Titanic wreck site during
the  1996  Expedition,  a  two-ton  flotation  bag  used  in  artifact  recovery
operations,  and a full-size replica of a three-ton light tower that the Company
utilized  to  illuminate  portions  of  the  wreck  during  the  Company's  1996
expedition to the Titanic.  The theme of this exhibition was the exploration and
recovery of objects from the Titanic wreck.

The "Titanic:  The Expedition" was presented in an area of  approximately  6,000
square  feet,  as  compared  to  the  Memphis,   Hamburg,   and  St.  Petersburg
exhibitions,  which  occupied  between  30,000  square  feet to more than 40,000
square  feet.  The  Queen  Mary  exhibition  was  substantially  the same as the
"Titanic:  The Expedition " which was presented at the National  Maritime Center
in Norfolk,  Virginia from  November 27, 1996 through March 31, 1997.  The Queen
Mary exhibition  closed on March 21, 1999, with  approximately  264,000 visitors
having attended.

      Boston Exhibition

The Company  entered into an agreement  with Resource Plus and Event  Management
International, a division of the World Trade Center Boston, for the presentation

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of more than 175  artifacts  in  Boston,  Massachusetts  from July 1998  through
November  1998.  This  exhibition   included  the  Company's  Titanic  artifacts
presented in the Memphis and St. Petersburg exhibitions.  This exhibition closed
in November 1998, with attendance of approximately 250,000 visitors. The objects
exhibited at the Boston exhibition and associated exhibitry were transported and
installed in a venue in St. Paul, Minnesota.

         St. Paul Exhibition

The Company entered into an agreement with Media Rare, Inc. for the presentation
of the objects and exhibitry  contained in the Company's Boston exhibition for a
period of four months commencing in January 1999 and ended in May 1999.

         Atlantic City Exhibition

The  Company  presented  an  exhibition  of  approximately  200 of  its  Titanic
artifacts  in Atlantic  City at the  Tropicana  Hotel.  This  exhibition,  which
includes the Big Piece recovered during the 1998 Titanic  expedition,  commenced
in May 1999 and concluded in September 1999.

         Japan Exhibition

The Company  entered into an agreement with Titanic Exhibition Japan
Inc. ("TEJI") for the exhibition of approximately 200 Titanic artifacts in seven
venues in Japan  commencing  on July 24,  1998 and ended on August 1, 1999.  The
Japanese  exhibition  was  presented in the cities of Tokyo,  Yokohama,  Joetsu,
Osaka;  Hiroshima,  Fukuoka,  and Sapporo.  Approximately 63,200 people attended
this exhibition.


         MERCHANDISING

The merchandising efforts in connection with the Memphis,  Hamburg,  Queen Mary,
and St.  Petersburg  exhibitions  were  undertaken by the parties with which the
Company presented these exhibitions. The Company did not have responsibility for
procurement of any merchandise or the operation of the merchandise  shops at the
venues.

The Company has entered  into an  agreement  with an  unaffiliated  third party,
Events  Merchandise  Inc.  ("EMI"),  to operate  and manage  retail  merchandise
operations  at the  Company's  exhibitions  in the United  States until June 30,
2000. In this agreement,  EMI is responsible  for all costs  associated with the
retail  operations,  including  but not  limited  to  build-out,  inventory  and
operational  costs and has agreed to pay to the Company and the co-presenters of
the  exhibition,  such as Events  Management  Inc.  with  respect  to the Boston
exhibition, thirty percent of gross revenues from retail sales at the exhibition
site.  EMI has also agreed to pay us an amount equal to ten percent of its gross
revenue  received  from  sales to third  parties,  and an  amount  equal to five
percent  of  the  suggested   retail  price  bearing  the  Company's   logos  or
incorporating  our  proprietary  rights,  whether sold at exhibitions or through
retail  outlets,  other  than  the  exhibitions.   Presently,   the  Company  is
negotiating with EMI for a new agreement.

The Company  intends to  manufacture  replicas of selected  artifacts or to sell
licenses to third parties for  replication of artifacts that have been recovered
from the  Titanic.  It is  contemplated  that the Company will receive a royalty
from  the  sales  of the  artifact  replicas  for  granting  such  licenses.  No
assurances can be given that such licensing  arrangements  will be  successfully
consummated,  or if  consummated,  will  result  in  the  Company's  receipt  of
significant revenues. The Company also intends to pursue the direct marketing of
merchandise through its web site  (http://www.rmstitanic.net)  and through third
parties.

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         EXPEDITIONS TO THE TITANIC

With the depth of the Titanic wreck  approximately  two and one-half miles below
the surface of the ocean in the North  Atlantic,  the Company is dependent  upon
chartering  vessels  outfitted with highly advanced deep sea technology in order
to conduct  expeditions  to the site. In its 1987,  1993,  1994,  1996, and 1998
expeditions,  the Company entered into charter agreements with IFREMER, pursuant
to which IFREMER  supplied the crew and equipment  necessary to conduct research
and recovery  efforts.  In addition to utilization of the research vessel NADIR,
recovery efforts were undertaken through the manned submersible NAUTILE.  Small,
hard-to-reach areas necessary for visual reconnaissance efforts were accessed by
a small robot, known as ROBIN,  controlled by crewmen on board the NAUTILE.  The
dive team had the  capability of retrieving  heavy  objects,  such as a lifeboat
davit weighing  approximately  4,000 lbs., to fragile objects weighing but a few
ounces. Because of the immense pressure of approximately 6,000 pounds per square
inch at the wreck site,  it is  impossible  for a dive team to reach such depths
and explore  the wreck site  through  any means  other than a  submersible.  The
NAUTILE and ROBIN were each  equipped with video and still cameras that recorded
all recovery and exploration  efforts.  In connection with its 1987, 1993, 1994,
1996,  and 1998  expeditions  to the wreck site,  the Company  engaged  maritime
scientists and other  professional  experts,  to assist in the  exploration  and
recovery efforts.  Management intends to engage experts from such fields for its
future expeditions to the Titanic, one of which is planned for this summer.

During the Company's 1998  expedition to the Titanic,  in addition to recovering
the largest  artifact to date -- a 26 foot by 20 foot outer  section of the hull
of Titanic  weighing  approximately  20 tons,  known as the "Big  Piece",  other
objects recovered during this expedition  included a port-side gangway door from
D-Deck,  found on the sea bed with its latch mechanism open; a golden chandelier
from one of the ship's first class public rooms;  a stateroom coat hook; a light
switch  control  panel from the galley  area;  a skylight  from the first  class
elevator  shaft; a small 60-second  hourglass used for navigation;  a round dial
with spindle and spring  mechanism that may be an electronic wall clock from the
Marconi radio room.  During the 1998 expedition,  a new area of the debris field
apparently  containing large amounts of passenger baggage was discovered,  which
the Company  intends to explore and to focus  attention upon in future  recovery
operations.

Additionally, by using ultra-high resolution digital underwater technology, more
than 3,000  individual  digital  photographs  were captured of the Titanic site.
These   photographs   have  been  compiled  and  processed   utilizing   special
computerized software into the world's first high-resolution photo-mosaic of the
wreck site,  including the  first-ever  composition  of the entire mangled stern
section as well as portions of the debris field surrounding the wreck.

The Company's  ability to conduct  expeditions  to the Titanic is subject to the
availability  of  necessary  research  and recovery  vessels and  equipment  for
chartering by the Company during the months between June and September, which is
the "weather  window" for such  activities in the North  Atlantic.  Research and
recovery  efforts  with  a  manned  submersible  are  presently  limited  to the
availability of the NAUTILE through charter  arrangements  with IFREMER and MIRI
and MIRII using charter arrangements with P.P. Shirshov Institute of Oceanology.
To the Company's knowledge, no other submersible with the capability of reaching
the depth of the Titanic is presently  commercially  available or  acceptable to
the  Company for such  chartering.  The Company  could also  conduct  operations
through the use of unmanned, surface-controlled, remote operated vehicles, which
may be available for chartering on suitable terms from other sources.

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         RESTORATION AND CONSERVATION

Upon  recovery  from  the  wreck  site,  artifacts  are  in  varying  states  of
deterioration  and  fragility.  Having been submerged in the depths of the ocean
for more than 85 years,  objects have been subjected to the corrosive effects of
chlorides  present in sea water. The restoration of many of the metal,  leather,
and paper artifacts  requires the application of sophisticated  electrolysis and
other electrochemical  techniques.  Artifacts recovered from the 1987 expedition
were restored and conserved by the  laboratories  of Electricite de France,  the
French  government-owned  utility.  Except for  un-restored  artifacts  that are
currently being exhibited, all artifacts recovered from the 1993, 1994, 1996 and
1998 expeditions are either undergoing or have undergone  conservation processes
at LP3, a privately-owned conservation laboratory in Semur-en-Auxois, France.

         SALVAGE RIGHTS

Pursuant to the judgment  entered in the Federal  District Court for the Eastern
District   of   Virginia   on  June  7,   1994,   the   Company   was   declared
salvor-in-possession  of the wreck and wreck site of the  Titanic,  the sole and
exclusive  owner of any items  recovered  from the  Titanic  and, so long as the
Company  is  salvor-in-possession,  the sole and  exclusive  owner of all  items
recovered from the Titanic in the future. The Court's judgment includes, without
limitation,  the contents,  cargo, hull, machinery,  engine, tackle, apparel and
appurtenances  of the Titanic,  and provides  that all  potential  claimants are
barred  and   precluded   from   filing   claims  so  long  as  the  Company  is
salvor-in-possession. No other entity has the right to salvage the Titanic while
the Company is salvor-in-possession.  To maintain  salvor-in-possession  status,
the Company, among other things must maintain a reasonable presence at the wreck
through  periodic  expeditions and continue salvage efforts and the preservation
of artifacts during the period between salvage expeditions.

In February  1996, a  third-party  instituted  a motion in the Federal  District
Court for the Eastern  District of Virginia  seeking  rescission  of the June 7,
1994 order  awarding  salvor-in-possession  status to the  Company.  By an order
dated May 10, 1996, the motion was denied. The court also modified its June 1994
order to require the Company to file more frequent reports about its activities.
In August 1996, the Court amended the May 1996 order to include the award to the
Company  of  exclusive  rights to  photograph  the  Titanic  within the award of
salvor-in-possession  status, and enjoined third parties from entering the wreck
site for purposes of obtaining photography or for other purposes.

An  unrelated  entity  announced  the  intention of  conducting  a  photographic
expedition,  known as Operation Titanic, to the Titanic wreck site during August
1998,  when the Company  intended to conduct  its 1998  expedition.  The Company
commenced  legal  proceedings  and  obtained  an  injunction   prohibiting  such
photographic  expedition  during August 1998 or at any other time so long as the
Company  is  salvor-in-possession  of the wreck and wreck  site of the  Titanic.
Notwithstanding such injunction,  the Operation Titanic photographic  expedition
occurred in September 1998. In March 1999, the District  Court's  granting of an
injunction  prohibiting the  photographic  expedition was reversed by the Fourth
Circuit of the United States.  The Company appealed the reversal of the District
Court's  determination  to the United States  Supreme  Court.  The Supreme Court
declined  to review  this matter in October  1999.  As a result,  the Company no
longer has exclusive photographic rights to the Titanic.

Future   photographic   expeditions  to  the  Titanic  have  been  announced  by
third-parties.  In the event that such  photographic  expeditions are undertaken
while the Company is conducting its  expedition,  safety  hazards  regarding the
deployment of submersibles chartered by the Company while other submersibles are
deployed could interfere with the Company conducting its expeditions.

                                       9
<PAGE>


Entities within the United States, United Kingdom, France and Canada are working
together to implement an  international  agreement that could diminish or divest
the Company of its  salvor-in-possession  rights. See Item 3- Legal Proceedings.
Management  believes that all requirements to maintain its  salvor-in-possession
status have been  satisfied by the Company and will  continue to be satisfied in
the foreseeable future. Should the Company not maintain its salvor-in-possession
status,  other entities could conduct salvage  operations and recover items from
the Titanic wreck site.  Management  believes  that salvage  operations by other
entities,  if  successful,  would not have a material  adverse  affect  upon the
Company's exhibition activities.

The loss of  exclusive  photographic  rights  could have a  materially  adverse
affect  upon  the  Company's   ability  to  generate   revenues  from  ancillary
activities,  such as television  productions,  or passenger cruises accompanying
research and recovery expeditions. See Legal Proceeding, Item 3


         MARKETING

         Several  organizations  in  association  with  which  the  Company  are
presenting  exhibitions  are  responsible  for  undertaking  and  paying for the
marketing and promotion of the exhibitions.


         COMPETITION

The entertainment and exhibition industries are intensely competitive. There can
be no assurances given the Company's limited capital resources,  that we will be
able to compete  effectively.  Many  enterprises  with which the Company will be
competing have substantially  greater resources than the Company.  Additionally,
following the success of the motion picture "Titanic" in December 1997, a number
of entities have undertaken,  or announced an intention to offer, exhibitions or
events  with the  theme of  Titanic  or  involving  memorabilia  related  to its
sinking.  Although  the  Company  is the only  entity  that  exhibits  artifacts
recovered  from the wreck site of the Titanic,  competition  may be  encountered
from these  exhibitions or events for the consumer's  interest in Titanic or the
Company's Titanic exhibitions. Management intends to compete with other entities
based  upon  the  mass  appeal  of  its  planned   exhibits  to   consumers   of
entertainment,  museum, scientific and educational offerings and the quality and
value of the entertainment experience. The Company will emphasize the unique and
distinctive   perspective   of  the  Titanic  into  its  exhibits  as  Titanic's
salvor-in-possession  and as the  only  entity  that has the  right  to  objects
recovered from the Titanic.

The success of the Company's  merchandising efforts will depend largely upon the
consumer  appeal  of  its  merchandise  and  the  success  of  its  exhibitions.
Management  believes that its merchandise will compete primarily on the basis of
its unique character and quality.


         EMPLOYEES

As of June 1, 2000, the Company had seven employees.  The Company is not a party
to any collective bargaining agreement.


         ENVIRONMENTAL MATTERS

The Company will be subject to  environmental  laws and  regulation  by federal,
state  and  local   authorities  in  connection  with  its  planned   exhibition
activities.  The Company does not anticipate  that the costs to comply with such
laws and  regulations  will have any material  effect on the  Company's  capital
expenditures, earnings, or competitive position.

                                       10
<PAGE>


ITEM 2.  DESCRIPTION OF PROPERTY

The Company had its principal executive offices located in New York, New
York which  consisted  of  approximately  3,500  square  feet which were  leased
pursuant to a lease commencing in June 1999. The Company has decided to sublease
that space as it decided to relocate its  administrative  offices to Clearwater,
Florida.  The market value of other similar rentals at the New York location are
higher than the Company's present lease rate.

The Company maintains office space at 401 Corbett Street,  Clearwater,  Florida.
Approximately 2,760 square feet of space houses the Company's administrative and
marketing activities. The lease is for a five-year term ending May 30, 2005 with
annual lease payments of $36,570.

The Company also  maintains a satellite  office at Tower Place,  3340  Peachtree
Road N.E.,  Suite 1225,  Atlanta,  Georgia.  Approximately  2,759 square feet of
space  is  used  by the  Company's  president  from  which  he  administers  his
management  responsibilities  on behalf of the Company.  The lease  commenced on
April 18, 2000 and is for a five year term and requires  base lease  payments of
$64,836 annually.


ITEM 3.  LEGAL PROCEEDINGS

Legal Action by Former Officers and Directors

On  November  26,  1999,  two of the  six  members  of the  Company's  Board  of
Directors,  Messrs.  Geller  and  Harris,  and  others;  acting via an action by
written  consent of the holders of a majority of voting  rights of the Company's
common  stock,  in lieu of a  meeting;  removed  Messrs.  Tulloch  and Carlin as
Officers and  Directors of the Company and the  remaining  Directors  other than
themselves.

Subsequently, the removed Officers and Directors brought an action in the United
States  District Court for  Connecticut  against  Messrs.  Geller and Harris and
others  seeking to obtain a  judicial  reversal  of their  removal  from  power.
Because of the uncertainty as to the  individuals who could conduct  business on
behalf of the Company  during the time from November 26, 1999 to the  resolution
of the dispute,  the Company's bank stopped  honoring checks and froze all funds
on deposit.  In  addition,  a creditor  notified  the company  that it would not
tender a $2,000,000  payment  otherwise  due and payable until the dispute among
current and former directors is resolved or settled.

The legal action was  resolved on January 21, 2000 with a  Settlement  Agreement
whereby the Company agreed,  among other things, to: (a) pay to Messrs.  Tulloch
and Carlin an aggregate  amount of $2,500,000 in three equal  installments to be
completed  within six months of the date of the  settlement;  (b) allow  Messrs.
Tulloch and Carlin to submit documented requests for reimbursement of previously
un-reimbursed  business  expenses;  (c)  review  /  revise  payment  information
submitted  to the  Internal  Revenue  Service  with  respect  to the  nature  of
previously made payments to Mr. Carlin; (d) the authority of Messrs. Tulloch and
Carlin to  exercise  previously  issued  options  to  acquire  an  aggregate  of
1,000,000  shares of the Company's common stock and to cause the company to file
a Registration  Statement  with respect to the options and underlying  shares of
common stock; (e) indemnify the former Officers and Directors who participate in
the Settlement  Agreement to the full extent of applicable law and to the extent
of Officers and Directors  Liability under the existing Company policy;  and (f)
reimburse  Messrs.  Tulloch and Carlin for the costs of health  insurance  for a
period of 18 months.

                                       11
<PAGE>


Messrs.  Tulloch  and Carlin  agreed,  among  other  things,  to: (a) accept the
$2,500,000  as full monetary  payment  (with the  exception of previously  noted
un-reimbursed  business  expenses) for any claims  against the Company,  Messrs.
Geller  and  Harris  and  others in  connection  with this  action  and  amounts
otherwise due them in  connection  with their roles as Officers and Directors of
the  Company;   (b)  send   appropriate   letters  to  the  Company's  bank  and
aforementioned  creditor to "unfreeze"  corporate funds and to allow operational
cash flow to resume; (c) an eighteen month standstill  agreement which precludes
them from  interfering in Company  management  without the prior approval of the
Board of Directors and  shareholders;  (d) discontinue their efforts to have the
Titanic  determined  to be a monument  and to restrict  the removal of materials
from the Titanic  wreck  site;  (e) return all the  Company's  property in their
possession,  including records and files, and provide a complete list of Company
Artifacts  which are located  anywhere in the world;  (f)  provide,  for a three
month period,  cooperation in effecting a professional  management transfer; (g)
return all monies held in Mr.  Carlin's  attorney  trust  account  along with an
accounting of such; and (g)  discontinue  access to the Company's  internet site
and to sell back to the company,  at cost,  another web site  utilizing the name
"Titanic".

At February 29, 2000 accounts payable and accrued liabilities includes a balance
of  $1,608,000  payable to  Messrs.  Tulloch  and Carlin  under the terms of the
Settlement  Agreement.  During the year ended February 29, 2000,  $1,672,000 was
charged to operations in connection with this Settlement Agreement.

The Company has  indemnified  all  defendants in the legal action brought by the
removed  Officers and Directors from all legal fees and expenses and other costs
associated with the action.

Other Legal Proceedings

The Company was a party to certain  litigations  that have been resolved  during
the year ended  February 29, 2000  resulting in  settlements  of $391,000  being
charged to operations for such year.  The $391,000  consists of cash and 100,000
shares of the Company's common stock.

The United States  Department of State and the National  Oceanic and Atmospheric
Administration  of the United  States  Department  of Commerce  (the "NOAA") are
working together to implement an International  Agreement (the "Agreement") with
entities in the United  Kingdom,  France and Canada that would  diminish  and/or
divest the Company of its  salvor-in-possession  rights to the Titanic which had
been awarded by the Federal  District Court for the Eastern District of Virginia
(the "District Court"). The Company has raised numerous objections to the United
States  Department  of State  regarding  the  actions  of the  United  States to
participate in efforts to reach an agreement governing salvage activities of the
Titanic.  The Agreement,  as drafted,  does not recognize the existing rights of
the Company in the Titanic,  that has been re-affirmed in the District Court and
affirmed by the Court of Appeals of the Fourth  Circuit,  and provides  that the
Agreement becomes effective when any two of the party states sign it. The United
States  Department of Justice has represented that the United States believed it
had  complied  with  the RMS  Titanic  Memorial  Act in the  development  of the
international  guidelines to implement the Agreement, but would solicit comments
from the public at large  regarding the draft  international  guidelines and the
NOAA will  consider  the  comments,  and then  publish  the final  international
guidelines. On April 3, 2000 the Company filed a motion for declaratory judgment
asking that the District Court declare  unconstitutional  and  inappropriate the
efforts of the United States to reach an international  agreement with the other
parties and that it be precluded  from seeking to implement  such an  agreement.
The Company expects,  that whatever the outcome of this matter, there will be no
impact on artifacts  its already  owns.  The Company is awaiting the response of
the United  States to its  complaint for  declaratory  judgment.  The Company is
unable to predict the possible outcome of this matter.

                                       12
<PAGE>


The Company is a named  defendant  in an action  brought by Suarez  Corporation
Industries ("SCI") in the United States District Court for the Southern District
of New York.  Between  October 1995 and March 1997,  the Company and SCI entered
into various  agreements  providing for the  exploitation of artifacts and other
merchandise  and  arranging  for a cruise and  ancillary  events  including  the
financing and sharing of the division of  contractual  defined  profits all with
respect to the 1996  Research  and  Recovery  Expedition  of the  Titanic by the
Company. SCI has brought various claims against the Company: (a) The first claim
is for  declaratory  judgment  claiming that SCI has co-salvor  status.  (b) The
second  claim is for  breach of  contract  for which SCI is  seeking  $8,000,000
because  it  incurred  expenses  in  preparation  of  the  1996  expedition  and
participated in and performed  substantial  duties at sea on a salvage vessel in
furtherance of the 1996  expedition.  (c) The third claim is for damages because
it was represented that the Company had the financial  capacity to fund the 1996
expedition or had contracted with third parties to ensure the salvage operation.
SCI  alleges it  suffered  damages to the extent of  $8,000,000.  (d) The fourth
claim is for  conversion  and alleges that the Company took  possession of light
towers,  having a value of $800,000,  owned by SCI.  The claim is for  sustained
damages of $800,000 and punitive damages in the sum of $1,000,000. (e) The fifth
claim is for quantum  meruit and SCI claims it is entitled to $8,000,000 for the
fair value of actions  performed by SCI and the Company.  (f) The sixth claim is
for breach of contract and as a result of such breach, defendant is obligated to
pay  $8,000,000.  (g) The  seventh  claim is for fraud and SCI claims that it is
entitled to  $8,000,000.  (h) The eighth claim is for an  additional  conversion
which SCI claims it suffered  damages in the sum of  $8,000,000.  The Company is
vigorously  defending SCI's claims and believes it has  meritorious  defenses to
such claims.



ITEM 4.  SUBMISSION OF MATTERS OF VOTE OF SECURITY HOLDERS

During the fourth  quarter of this fiscal year ended  February 29,  2000,a proxy
was submitted to the vote of the Company's security holders.

                                     PART II

ITEM 5.  PRICE RANGE OF SECURITIES

         (a) MARKET  INFORMATION.  The  Company's  Common Stock is traded on the
over-the-counter  market on a limited and sporadic  basis.  The following  table
sets  forth the range of high and low bid  quotations  of the  Company's  Common
Stock for the periods set forth  below,  as  reported by OTC  Bulletin  Board of
Nasdaq  Trading  &  Market  Services.  Such  quotations  represent  inter-dealer
quotations, without adjustment for retail markets, markdowns or commissions, and
do not necessarily represent actual transactions.

FISCAL PERIOD
                                             COMMON STOCK

                                 HIGH                       LOW
                                 BID                        BID

    2000
1st Quarter                     2.875                       1.375
2nd Quarter                     2.56                        1.72
3rd Quarter                     4.375                       1.66
4th Quarter                     3.8125                      2.4375


                                       13
<PAGE>


    1999
1st Quarter                    2.0625                       .875
2nd Quarter                    1.9375                       .78125
3rd Quarter                    1.6563                       .78125
4th Quarter                    2.75                        1.1875

     (a) HOLDERS.  The approximate  number of holders of record of the Company's
Common Stock as of June 1, 2000 was 693.

     (c) DIVIDENDS.  The Company has not paid or declared any dividends upon its
Common Stock since its inception,  and intends to re-invest earnings, if any, in
the  Company  to  accelerate  its  growth.  Accordingly,  the  Company  does not
contemplate  or  anticipate  paying any  dividends  upon its Common Stock in the
foreseeable future.

Effective April 1, 2000, the Company relocated its principal office and place of
business from New York to  Clearwater,  Florida.  By virtue of such  relocation,
legal  counsel has advised  the Company  that it is subject to Section  607.0902
Florida Statutes, the Control Share Statute. Although the application of certain
provisions of the Control  Share  Statute is subject to varying  interpretation,
the Company believes that those  shareholders who own, or have voting power with
respect to, shares constituting 20% or more of the Company's  outstanding shares
of  common  stock  hold  "control   shares"  that  are  subject  to  the  voting
restrictions of the Control Share Statute.

In general, "control shares" have no voting rights. Voting rights may be granted
to such shares only pursuant to a resolution  adopted by shareholders.  Any such
resolution  must be adopted  by a majority  of all  shares,  excluding  "control
shares".  The  Board  of  Directors  has no  current  plans to  submit  any such
resolution to a vote of shareholders.


ITEM 6.  SELECTED FINANCIAL INFORMATION

The selected  financial  data set forth below is qualified by reference  to, and
should be read in conjunction  with, the Financial  Statements and Notes thereto
and Management's  Discussion and Analysis of Financial  Condition and Results of
Operations  included  elsewhere in this Form 10-K.  The selected  financial data
have been  derived  from the  Company's  Financial  Statements  which  have been
audited by independent certified public accountants. The financial statements as
of February  29, 2000 and  February  28, 1999 and for each of the three years in
the period ended February 29, 2000 is included elsewhere in this Form 10-K.


<TABLE>
<CAPTION>

YEAR ENDED FEBRUARY 28(29)
                              1996          1997            1998              1999         2000

Statement of Operations Data:

<S>                          <C>          <C>             <C>              <C>         <C>
   Revenue                    $  725,000   1,247,000       4,658,000        9,857,000   6,433,000
   Net income (loss)          $ (150,000)    158,000       3,367,000        4,063,000     (21,000)
   Income (loss)
      per share (1)           $     (.01)        .01             .21              .25          -0-

   Weighted average number of
    common shares
    outstanding               15,834,644  16,141,950      16,181,868       16,187,128  16,187,128

</TABLE>

                                       14
<PAGE>

<TABLE>
<CAPTION>
FEBRUARY 28(29),             1996           1997          1998          1999          2000

Balance Sheet Data:
<S>                        <C>          <C>         <C>            <C>            <C>
   Total Assets             $ 6,060,000   8,005,000   10,079,000    13,910,000     15,372,000
   Long Term Obligations             --          --           --            --             --
Total Liabilities           $  2,195,000  3,942,000    2,642,000     2,410,000      3,569,000
   Shareholders' Equity     $  3,866,000  4,063,000    7,437,000    11,500,000     11,803,000

</TABLE>

     The Company has declared no cash dividends.

     Basic  income  (loss) per common  share  ("EPS") is  computed as net income
(loss) divided by the weighted  average number of common shares  outstanding for
the period.  Diluted EPS is not presented  since there was no dilutive effect of
potential common shares or their inclusion would be anti-dilutive.

ITEM 7. 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

YEAR ENDED FEBRUARY 29, 2000 AS COMPARED TO YEAR ENDED FEBRUARY 28, 1999

During its fiscal year ended  February  29, 2000 (the "2000 fiscal  year"),  the
Company's  revenues  decreased to  $6,433,000  as compared to  $9,857,000 in the
fiscal year ended February 28, 1999 (the "1999 fiscal  year").  This decrease of
$3,424,000,  or 35%,  primarily  reflects lower licensing fee income in the 2000
fiscal  year.  In the  1999  year,  licensing  fee  income  benefited  from  the
production  and  exploitation  of audio and visual  recordings for the Company's
expedition  to the Titanic wreck site during the summer of 1998 in the amount of
approximately $3.300,000.

Exhibition and  merchandising  revenue was $6,136,000 in the 2000 fiscal year as
compared to $5,460,000  in the 1999 fiscal year for an increase of $676,000,  or
12%. This increase in revenues was principally  attributable to the presentation
of major exhibitions in Atlantic City, St. Paul and Japan, as well as the income
received  from  Magicworks,  a subsidiary of SFX for their  licensing  agreement
executed during the year.

The  Company's  merchandise  and  other  revenues,  that  included  the  sale of
merchandise,  books and royalty payments, decreased to $221,000 from $680,000 in
the prior  fiscal  year.  This  decrease of $459,000,  or 67% is  attributed  to
substantially lower sales in each category for the current fiscal year. The sale
of coal  recovered  from the  Titanic  was  $59,000 in the  current  fiscal year
compared  to  $222,000 in the prior year.  This  decrease is  attributed  to the
curtailing of marketing  efforts during the recent year as compared to the prior
years marketing emphasis.

General and administrative  expenses were $6,154,050 for the 2000 fiscal year as
compared to $1,733,000 in the 1999 fiscal year. This increase of $4,421,000,  or
255%,  is attributed to  $2,230,000  incurred for the  settlement  with previous
management that was charged to operations  including the related legal expenses,
additional  legal  expenses of $272,000  which were  primarily the result of the
legal  matters  surrounding  the change in  management,  the  settlement  of two
litigations  for  $694,000  including  legal  expenses,  a bad debt  expense  of
$250,000, and higher exhibition expenses.

                                       15
<PAGE>


Depreciation  and  amortization  expense during was $303,000 for the 2000 fiscal
year as compared to $246,000 in the 1999 fiscal year.  This increase of $57,000,
or 23%, is attributed to the impact of  depreciation  charges for a full year as
depreciation  of certain  exhibitry in the prior year was only for a part of the
full year.

Expenses  for  expedition  costs were only  $11,000  for the 2000 fiscal year as
compared to $1,845,000 in the 1999 fiscal year.  During the 1999 fiscal year the
Company undertook the "Summer of 1998  Expedition".  There was not an expedition
conducted during the 2000 fiscal year.

Loss from operations was $134,000 for the 2000 fiscal year as compared to income
from  operations of $5,818,000 in 1999 fiscal year.  The decrease in income from
operations  is  attributed  to the lower  revenue for fiscal year 2000 while the
Company incurred higher expenses as detailed above.

During the 2000 fiscal year, the Company earned  interest  income of $113,000 as
compared  to $52,000 in the prior  year.  The  Company  maintained  higher  cash
balances during the 2000 fiscal year.

Loss before  provision  for income taxes was $21,000 for the 2000 fiscal year as
compared  to  $5,875,000  in the 1999 fiscal  year.  The Company had net loss of
$21,000  for income of the  current  fiscal  year as  compared  to net income of
$4,063,000 in the prior year.  Basic and diluted  earnings per common share were
$-0- and $0.25 for the 2000 and 1999 fiscal  years,  respectively.  The weighted
average  common shares  outstanding  were  16,187,128 for both the 2000 and 1999
fiscal years.


YEAR ENDED FEBRUARY 28, 1999 AS COMPARED TO YEAR ENDED FEBRUARY 28, 1998

During its fiscal year ended  February 28, 1999,  Company's  revenues  increased
approximately  112% as compared to its fiscal year ended  February 28, 1998 (the
"1998  fiscal  year"),  primarily  as a result of an increase  of  approximately
2,947% in the Company's  licensing  fees during its 1999 fiscal year as compared
to its 1998 fiscal year, and an increase of  approximately  32% in the Company's
exhibition  and  related  merchandise  revenues  during its 1999  fiscal year as
compared to its 1998 fiscal year.  These changes were  primarily a result of the
Company having earned  licensing fees of $3,345,000  during the 1999 fiscal year
related to the production and  exploitation of audio and visual  recordings with
respect to the Company's  expedition to the Titanic wreck site during the summer
of 1998  (the  "Summer  of 1998  Expedition"),  and the  scope of the  Company's
exhibition activities during the 1999 fiscal year as compared to the 1998 fiscal
year.

Revenue from merchandise, book and other activities increased approximately 178%
during the 1999 fiscal year as  compared  to the 1998 fiscal  year.  This change
resulted primarily from revenue derived during the 1999 fiscal year derived from
a book published in conjunction with unrelated third parties and revenue derived
from the sale of  merchandise  through the  Company's  web site.  The  Company's
revenue from the sale of coal increased approximately 51% during the 1999 fiscal
year as compared to the 998 fiscal  year,  primarily as a result of increases in
the amount of coal sold through the Company's web site, in the merchandise shops
of the Company's United States  exhibitions,  and through other direct marketing
activities.

The  Company's  cost of coal sold  increased  approximately  36% during the 1999
fiscal  year as  compared  to the 1998 fiscal year as a result of an increase in
the  volume of coal  sales  during  these  corresponding  periods.  General  and
administrative  expenses of the Company  increased  approximately 47% during the
1999 fiscal as compared to the 1998  fiscal  year,  primarily  as a result of an

                                       16
<PAGE>

increase in professional  fees and expenses of $150,000 incurred during the 1999
fiscal year related to the  reinstallation  and  transportation  of the Hamburg,
Germany exhibition to Zurich, Switzerland.

The Company's  depreciation and amortization  expenses  increased  approximately
961% during the 1999 fiscal year as compared to the 1998. During the 1999 fiscal
year, the Company  incurred  $1,845,000 of costs related to vessel and equipment
chartering related to the Company's audio-visual licensee's requirements for the
"Summer of 1998 Expedition",  as compared to zero costs  attributable to license
fees  during the 1998 fiscal  year.  During the 1999  fiscal  year,  the Company
recorded an  impairment  loss of $150,000  attributable  to exhibitry  equipment
related to the  Company's  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 November 1998.

The Company's income before  provision for income taxes increased  approximately
67% during  the 1999  fiscal  year as  compared  to the 1998  fiscal  year.  The
Company's provision for income taxes increased  approximately  1,108% during the
1999 fiscal year as compared to the 1998 fiscal year.  After  application of the
available  portion of its net operating loss  carryforward for the 1998 and 1999
fiscal years,  the Company's net income increased  approximately  21% during the
1999 fiscal year as compared to the 1998 fiscal year.


LIQUIDITY AND CAPITAL RESOURCES

Net Cash  provided by operating  activities  was  $2,381,000  for the year ended
February 29, 2000 as compared to $1,344,000 in the prior 1999 fiscal year.  This
increase  in cash  provided  by  operating  activities  for this  fiscal year is
primarily  attributed  to the  reduction in accounts  receivables  of $1,274,000
during the year and an increase  of  $976,000  in  accounts  payable and accrued
liabilities, despite the lower net income.

For the year ended  February 29, 2000,  cash used in  investing  activities  was
$36,000 for the purchase of property and equipment.  There was no cash financing
activities during the year ended February 29, 2000.

The Company's net working capital and  stockholders'  equity were $1,080,000 and
$11,803,000  respectively,  at February  29,  2000 as  compared to $563,000  and
$11,500,000  respectively at February 28, 1999. The Company's  current ratio was
1.3 at February 29, 2000 as compared to 1.2 at February 28, 1999.

Management  plans to continue  with the  exploration  of the Titanic and recover
additional  artifacts for  presentation  to the public through  exhibitions.  An
expedition  is planned for this summer to recover  artifacts  for future  tours.
With this  business  strategy,  management  believes  it is  focusing on the key
elements necessary for the Company to be both profitable and successful over the
long-term.

Management is currently  negotiating a television agreement as well as exploring
other media  opportunities with third parties.  These endeavors,  if consummated
could provide the Company with additional sources of revenues.

Management expects that it will be able to arrange for the financial  resources,
including  licensing  arrangements,  to  properly  execute its  strategic  plan,
although  no  assurances  can be  given  that  it  will  be  successful  in such
endeavors.

                                       17
<PAGE>


The Company has  sufficient  working  capital to meet its planned  needs for the
next twelve months without any additional funding. The exhibition tour agreement
with a subsidiary of SFX Entertainment, Inc., requires 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 additional one year periods in  consideration  of
additional  minimum annual  payments to the Company of $8.5 million.  As of this
filing date, the Company was in  negotiations  with SFX for  modification of its
existing  licensing  agreement for the next option period. A modification  being
discussed is reducing the minimum  annual payment and providing the Company with
the  opportunity  for a  higher  percentage  of the  net  revenues  from  future
exhibitions.  To  facilitate  the  finalization  of a modified  agreement  , the
Company has extended the notification  requirements that SFX must provide on its
election  of the next one option  year  period.  Should SFX and the  Company not
reach further  agreement and if SFX should decline to exercise its next one year
option then the Company is  prepared to conduct  exhibitions  on its own or with
other third parties.


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 plans to conduct a dive
this summer.  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.

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 fiscal year ended February 29, 2000, 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 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.


YEAR 2000

To  the  best  of  management's  knowledge  and  belief,  the  Company  has  not
experienced any significant disruption in data processing on financial reporting
and operational systems or malfunction in equipment  containing  microprocessors
or  significant  delays in  receiving  goods or  services  from key  vendors and
service  providers or  delinquency  in the receipt of payments from  significant
customers  for  services  provided  by the  Company as a result of the year 2000
issue.  Management cannot be sure that some condition  relating to the year 2000
exists, but has not been identified.

                                       18
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS
                                                                           Page

Independent Auditor's Report                                                F-1

Balance Sheet at February 28, 1999 and  February 29,2000                    F-2

Statement of Operations for the years ended
     February 28 (29), 1998, 1999 and 2000                                  F-3

Statement of Stockholders' Equity for the years ended
     February 28(29), 1998, 1999 and 2000                                   F-4

Statement of Cash Flows for the years ended
     February 28(29), 1998, 1999 and 2000                                   F-5


Notes to Financial Statements                                        F-6 - F-18




ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10.  MANAGEMENT

OFFICERS AND DIRECTORS

The directors, executive officers and significant employees of the Company are:

Name                   Age                    Position
----                   ---                    --------

Arnie Geller            59   President, Chief Executive Officer, Director

G. Michael Harris       35   Vice President, Chief Operating Officer, Director

Gerald Couture          54   Vice President, Director and
                              Chief Financial Officer

Nick N. Cretan          65   Director


Arnie  Geller  serves as  President  and as a director of the  Company  from his
reappointment  in  November  1999 as an officer of the  Company.  Previously  he
served as President  from May 1993 to May 1995,  and has served as a director of
the Company since May 26,1999.  Prior to 1993, Mr. Geller had  principally  been
engaged in various executive capacities in the record industry for approximately
27 years.  Mr.  Geller was a  self-employed  corporate  consultant  prior to his
recent appointment as President of the Company.

                                       19
<PAGE>


G. Michael Harris serves as Executive Vice President and Chief Operating Officer
of the Company since  November  1999.  Previously he was a promoter and agent of
entertainment  programs and events, and is the principal of Worldwide  Licensing
and Merchandising, Inc, a privately-held company involved in the presentation of
an exhibition  having a Titanic  theme in Orlando,  Florida with a subsidiary of
SFX Entertainment and a third-party.  Mr. Harris has served as a director of the
Company since May 26, 1999.

Gerald Couture serves as Vice President-  Finance,  Chief Financial  Officer and
director  of the  Company  since  April  2000.  Mr.  Couture  is a  partner  and
principal,  in Couture & Company, Inc., a private corporate financial consulting
firm formed in 1973,  that  specializes  in the  financial  development  of high
potential  technology-driven public and private companies within several diverse
industries.  Over the last  twenty-five  years,  Mr.  Couture  has,  through his
consulting firm, been involved in public  offerings,  mergers and  acquisitions,
venture capital investing, crisis management,  reorganizations and the financial
management  a number of growth  enterprises.  Mr.  Couture has a MBA from Temple
University, Philadelphia, and a B.S. in Chemical Engineering from the University
of Massachusetts.

Nick Cretan serves as a Director of the Company since April 2000. Mr. Cretan has
more than thirty years of management  experience  including his present position
as Chief Operating Officer of the non-profit Maritime Association of the Port of
New York and New Jersey. He also serves as President of Friends of the Statue of
Liberty, Ellis Island Foundation, President of Friends of Gateway National Parks
Foundation and as Executive  Director of the American  Merchant  Marine Memorial
Foundation.  Previously he served as Deputy Director of the San Francisco Marine
Exchange and staff assistant at the National Federation of Independent Business.


No family  relationship  exists between or among any of the members of the board
of directors and executive  officers of the Company.  Except as disclosed above,
none of the nominees are directors of any other company having a class of equity
securities registered under or required to file periodic reports pursuant to the
Securities  Exchange Act of 1934,  as amended,  or any company  registered as an
investment company under the Investment Company Act of 1940, as amended.

The Board of Directors held three meetings during the fiscal year ended February
29, 2000, At the present time, the Company has no nominating,  executive,  audit
or compensation committees.

                                       20
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

         The  following  table  sets  forth a summary  of  compensation  paid or
accrued to the  executive  officers of the  Company  for the fiscal  years ended
February 28, 1998, February 28, 1999 and February 29, 2000.

<TABLE>
<CAPTION>

                                                                            Long-Term
                                                                            Compensation
                                                                            ------------

Name                                                                                              Common
and                                                                         Other                 Shares
Subject to                          Year                                    Annual                Subject to
Principal                           Ended February                          Compen-               Options
Position                            28th(29th)             Salary           sation                Granted
----------------------              ---------------        ------           -------------         ----------
Former Officers:

<S>                                <C>                    <C>             <C>                  <C>
George Tulloch(1)
Former President and Chief
Financial Officer                       2000               $210,000             -0-               500,000
                                        1999               $120,000             -0-                   -0-
                                        1998               $120,000             -0-                   -0-

Allan Carlin(1)
Former Secretary and General
Counsel
                                        2000               $220,000             -0-                   -0-
                                        1999               $215,000             -0-               500,000
                                        1998                    -0-             -0-                   -0-

Current Officers:

Arnie Geller(2) (3)
President and Chief
Executive Officer
                                        2000                $79,200             -0-                   -0-
                                        1999                    -0-             -0-                   -0-
                                        1998                    -0-             -0-                   -0-

G. Michael Harris (2)
Vice President and Chief
Operating Officer
                                        2000                $79,200             -0-                   -0-
                                        1999                    -0-             -0-                   -0-
                                        1998                    -0-             -0-                   -0-


Gerald Couture(4)                       2000                    -0-             -0-                   -0-
Vice President Finance                  1999                    -0-             -0-                   -0-
  Chief Financial Officer               1998                    -0-             -0-                   -0-

</TABLE>


(1)  Messrs  Tulloch and Carlin  served as directors and officers of the Company
     until November 26, 1999. See "LEGAL PROCEEDINGS."

                                       21
<PAGE>

(2)  Messrs Geller and Harris were elected  directors and appointed  officers of
     the Company on November 26, 1999.

(3)  In Fiscal  Year 2000,  the Company  paid  accrued  salary to Mr.  Geller of
     $500,000 for the period May 1993 to May 1995,  during which time Mr. Geller
     served as President.

(4)  On April 25, 2000, the Company  engaged Mr. Couture as its Chief  Financial
     Officer.  The  Employment  Agreement  between the  Company and Mr.  Couture
     provides for an annual base salary of $120,000. At Mr. Couture's option, he
     may elect to receive his  compensation  in shares of the  Company's  common
     stock.  For this  purpose,  the  common  stock will be valued at 50% of its
     closing bid price as of the date of the election. Mr. Couture has also been
     granted a stock option to purchase  300,000 shares of the Company's  common
     stock at a price of $1.625 per share,  which was the  closing  price of the
     stock on April 24, 2000. The options expire in ten years.


Stock options  granted to Mr.  Tulloch during the fiscal year ended February 29,
2000 consist of options to purchase 500,000 shares of the Company's common stock
at an exercise price of $2.00 with an expiration of May 26, 2004.

The above table excludes settlement payments made to Messrs. Tulloch and Carlin.
See Legal Proceedings- Legal Action by Former Officers and Directors.

         Option Exercises and Holdings

         No executive  officer of the Company exercised any stock options during
the fiscal year ended February 29, 2000.

         Compensation of Directors

         The Company does not have any arrangements for compensating directors
for  services  rendered  as a  director.  No  compensation  has been paid to any
individual for services rendered as a director.


ITEM. 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


        The following table enumerates,  as of June 1, 2000, the name,  address,
and ownership,  both by numerical  holding and percentage of interest,  of, each
beneficial  owner or more than five  percent (5%) of the  Company's  outstanding
Common Stock, the directors of the Company,  individually, and its directors and
executive  officers as a group. This table excludes security ownership of Messrs
Tulloch,  Carlin, Hothorn, and Nargeolet because these individuals are no longer
directors of the Company.


                                       22
<PAGE>

<TABLE>
<CAPTION>


                                                                     Amount
Name and Address of                                               Beneficially       Common Stock
Beneficial Owner                                Class                Owned            Percentage
----------------                                -----                -----            ----------

<S>                                            <C>             <C>                   <C>
Titanic Ventures Limited Partnership (1)(2)     Common             2,210,184             13.7
204 Old Post Road
Southport, CT 06490

G. Michael Harris (3)(6)                        Common               125,000              0.8
16 Winston Drive
Belleair, FL 34616

Arnie Geller                                    Common             1,450,000              9.0
3340 Peachtree Road, N.E, Suite 1225.
Atlanta, GA 30326

Nick Cretan                                     Common                    --               --
Suite 913
17 Battery Place
New York, NY 10004

Joe Marsh (4)(6)                                Common             1,740,979             10.8
c/o RMS Titanic, Inc.
401 Corbett St
Clearwater, FL 33756

TAG Acquisition, LLC (5)(6)                     Common             1,634,384             10.1
c/o G. Michael Harris
16 Winston Drive
Belleair, FL 34616

Stephen Sybesma (5)(6)                          Common               900,000              5.6
401 Corbett St
Clearwater, FL 33756

Gerald Couture (7)                              Common               432,415              2.7
901 Chestnut Street, Suite A
Clearwater, FL 33767

All Officers and Directors as a Group           Common             3,641,799             22.5
   (4 persons)

</TABLE>



(1) George Tulloch, a former director of the Company, is the president and sole
shareholder of Oceanic  Research and  Exploration  Limited  ("ORE"),  a Delaware
corporation,  which serves as the general  partner of Titanic  Ventures  Limited
Partnership ("TVLP").

(2)  Represents  shares over which TVLP and Mr.  Tulloch,  as  President of ORE,
exercise  voting  control,  and excludes  1,052,112  shares that TVLP previously
distributed  to  certain  limited   partners  and  2,602,490  shares  that  TVLP
distributed to its limited partners in May 2000,

(3) Mr. Harris owns 125,000 of his shares in a tenants by the entireties account
with his wife.

(4) Mr. Marsh acquired  approximately 883,950 shares in open market purchases as
reported in his  Schedule  13D filed on or about  October 21,  1999.  Since that
date,   Mr.  Marsh  has  acquired   approximately   827,029  shares  in  private
transactions.  In addition,  Mr. Marsh has the  beneficial  ownership  rights to
1,534,384 shares of Common Stock acquired by TAG  Acquisition,  LLC ("TAG") from


                                       23
<PAGE>


William S. Gasparrini,  et al when such shares are distributed by TAG. Mr. Marsh
is also the holder of a voting proxy for 30,000 shares from J. P. Utsick.

(5) TAG Acquisition,  LLC ("TAG") acquired 1,634,384 shares of Common Stock from
William S.  Gasparrini,  et al on November 16, 1999. TAG is managed and owned by
Mr. Harris.

(6) On November  16, 1999,  TAG  acquired a total of 1,634,384  shares of Common
Stock  from  William  S.  Gasparrini,  individually  and on  behalf  of  certain
affiliated  entities,  for $3.00 a share.  These shares were subject to a voting
proxy granted to Jon Thompson,  which expired  December 25, 1999.  Joe Marsh and
Steven Sybesma provided the funds for the purchase of these shares by TAG. There
is an oral understanding that Mr. Harris will cause TAG to distribute  1,534,384
shares to Mr.  Marsh and  100,000  shares  to Mr.  Sybesma  such that all of the
Gasparrini  shares acquired by TAG will ultimately be owned by Mr. Marsh and Mr.
Sybesma.

(7) Mr.  Couture has an option to purchase  300,000  shares at a price of $1.625
per share.  Additionally,  under his  Employment  Agreement with the Company Mr.
Couture  has the option to be paid with  shares of common  stock in lieu of cash
compensation.  Based upon the  closing  price of  $1.8125  on June 1, 2000,  Mr.
Couture would have been entitled to receive a maximum of 132,414  shares in lieu
of cash compensation had he elected to take his entire basic annual pay in stock
on that date.

        Other  than as set forth  above,  the  Company is not aware of any other
stockholders who beneficially own, individually or as a group, 5% or more of the
outstanding shares of Common Stock.

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors and executive  officers,  and persons who own more than ten percent of
the Company's  outstanding  shares of Common Stock,  to file with the Securities
and Exchange  Commission (the "SEC") initial reports of ownership and reports of
changes  in  ownership  of  Common  Stock.  Such  persons  are  required  by SEC
regulation  to furnish the Company  with  copies of all such  reports  that they
file. To the Company's knowledge based solely upon a review of Forms 3, 4 and 5,
and any  amendments  furnished  to the  Company  during  the  fiscal  year ended
February 29, 2000, the Company is unaware of any officer, director or beneficial
owner of more than 10% of the Company's  Common Stock who failed to file reports
required by Section 16 of the Securities Exchange Act of 1934.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the fiscal year ended  February  29, 2000,  the Company  entered
into an agreement  with a subsidiary  of SFX  Entertainment,  Inc.,  pursuant to
which,  among other things,  the Company licensed to SFX the worldwide rights to
exhibit the Company's  Titanic  artifacts for a minimum of one year,  commencing
September 14, 1999 (the "License  Agreement").  The agreement  with SFX provides
that the Company shall have the right to receive  twenty of the net profits from
a Titanic themed  exhibition in Orlando,  Florida,  which SFX is presenting with
third parties.  G. Michael Harris, a director of the Company,  is a principal of
one of the third parties  involved in such Orlando  exhibition.  Pursuant to the
Company's  agreement  with  SFX,  a  limited  number  of the  Company's  Titanic
artifacts were incorporated into this Orlando exhibition..

         The Company loaned George  Tulloch,  its former  President,  the sum of
$72,367,  as  evidenced  by a  promissory  note dated  January 5, 1999,  bearing
interest at the rate of 8% per annum and payable in full no later than  February
29, 2000.  This loan was secured by accruals for past salary owed by the Company

                                       24
<PAGE>

to Mr. Tulloch amounting to approximately $700,000 as of February 28, 1999. This
loan was discharged  within the settlement with Mr. Tulloch as described in Item
3, Legal Proceedings.


         PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON FORM 8-K

The following documents are filed as part of this Report on Form 10-K:

(a) Financial Statements.  The following financial statements of the Company are
included in this Annual Report:

Independent Auditor's Report                                              F-1

Balance Sheet at February 28, 1999
     and February 29,2000                                                 F-2

Statement of Operations for the years ended
     February 28(29), 1998, 1999 and 2000                                 F-3

Statement of Stockholders' Equity for the years ended
     February 28(29), 1998, 1999 and 2000                                 F-4

Statement of Cash Flows for the years ended
     February 28(29), 1998, 1999 and 2000                                 F-5


Notes to Financial Statements                                      F-6 - F-18

(b)Reports on Form 8-K

i. Form 8-K filed February 17, 2000 containing  settlement agreement with former
officers and directors.


                                   SIGNATURES

         Pursuant to the  requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the Registrant had duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            RMS TITANIC, INC.

June 13, 2000                               By: /s/ Arnie Geller
                                            -----------------------------------
                                            Arnie Geller, President and Chief
                                            Executive Officer

                                   SIGNATURES

Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities  and
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the date indicated:

/s/ Arnie Geller                                     June 13, 2000
-----------------------------
Arnie Geller, President.
Chief Executive Officer, Director

/s/ G. Michael Harris                                June 13, 2000
-----------------------------
G. Michael Harris, Executive
Vice President, Chief Operating Officer
Director

/s/ Gerald Couture                                   June 13, 2000
-----------------------------
Gerald Couture, Vice President, Chief
Financial Officer, Director

/s/ Nick. Cretan                                     June 13, 2000
-----------------------------
Nick. Cretan, Director

                                       25
<PAGE>


                                    EXHIBITS


                                RMS TITANIC, INC.

                                    FORM 10-K

                   FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1999


3.1      Articles of Incorporation, as amended.

4.1      First Amendment to By-Laws of the Registrant.

4.2      Amendment to By-Laws adopted January 18, 2000.

9.1      Voting Trust Agreement among Titanic Ventures Limited Partnership,
         George Tulloch, Allan H. Carlin, Arnie Geller, G. Michael Harris, Kurt
         Hothorn, Cheryl Hothorn, Westgate Entertainment Corp., Anne A. Hill,
         Diane Carlin, Shirley A. Hill, James A. Hill, and D. Michael Harris.

10.1     Lease Agreement between the Company and 17 Battery Place North
         Associates.

10.2     Agreement dated April 15, 1996 between the Company and CRE-CO Finanz
         GmbH.

10.3     Pledge Agreement dated April 15, 1996 between the Company and CRE-CO
         Finanz GmbH

10.4     Bailment Agreement dated April 15, 1996 between the Company and CRE-CO
         Finanz GmbH.(

10.5     1996 Charter Agreement with IFREMER.

10.6     Agreement dated August 8, 1996 between the Company and the City of
         Memphis.

10.7     Agreement dated July 22, 1996 between Discovery  Communications,  Inc.,
         Ellipse  Programme  and the Company  (omitted and filed  separately  as
         confidential information).

10.8     Agreement dated May 23, 1997 between the Company and RMS Foundation,
         Inc.

10.9     Amendment to Agreement dated April 15, 1996 between the Company and
         CRE-CO Finanz GmbH.


10.10    Agreement between the registrant and Resource Plus and Event Management
         International None dated April 24, 1998.

10.11    Agreement  between the  registrant  and Titanic  Exhibition  Japan Inc.
         dated May 17, 1998.

                                       26
<PAGE>


10.12    Agreement  between the  registrant  and CRE-CO  Finanz  dated April 15,
         1998.

10.13    1998 Charter Agreement with IFREMER.

10.14    1998 Charter Agreement with Oceaneering International, Inc.

10.15    Agreement dated July 15, 1998 between Discovery  Communications and the
         Company.

10.16    1998 Charter Agreement with Aqua Plus.

10.17    1998 Charter Agreement with Les Abeilles International, Travocean
         and the Company.

10.18    Amendment to Agreement dated August 4, 1998 between the Company and
         CRE-CO Finanz GmbH.

10.19    Agreement dated September 25, 1998 between the Company and Media Rare,
         Inc..

10.20    Promissory Note dated January 5, 1999 executed by George Tulloch in
         favor of the registrant.

10.21    Pledge  Agreement dated January 5, 1999 between George Tulloch and the
         registrant.

10.22    Exhibition  Tour  Agreement  dated March 31, 1999  between the Company
         and Magicworks  Entertainment Inc. is incorporated by reference to the
         Company's  report on Form 10-Q for the  fiscal  quarter  ended May 31,
         1999.

10.23    Agreement dated April 18, 2000 by and among Whitestar  Marine Recover,
         Ltd. Argosy International, ltd. Graham Jessop and the Company.

10.24    Agreement  dated  April  18,  2000 by and among  the  Company,  Argosy
         International, Inc. and Graham Jessop.

10.25    Lease dated March 27, 2000 for offices in Atlanta, Georgia.

10.26    Investor - Public Relations Agreement dated March 27, 2000 between the
         Company and Roelandt Dominic.

10.27    Employment  Agreement  dated  April 25,  2000  between the Company and
         Gerald Couture.

10.28    Stock  Option  Agreement  dated April 25, 2000 between the Company and
         Gerald Couture.

10.29    The Company's 2000 Stock Option Plan.

10.30    Exhibition  Agreement  dated  April 5, 1999  between  the  Company and
         Adamar New Jersey,  Inc. is incorporated by reference to the Company's
         report on Form 10-Q for the fiscal quarter ended May 31, 1999.


                                       27
<PAGE>




                               RMS TITANIC, INC.

                              FINANCIAL STATEMENTS

                               FEBRUARY 29, 2000


<PAGE>






                                                               RMS TITANIC, INC.


                                                   INDEX TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------



Independent Auditor's Report                                                F-1


Financial Statements:

   Balance Sheet at February 28, 1999 and February 29, 2000                 F-2

   Statement of Operations for the Years Ended February 28, 1998,
    1999 and February 29, 2000                                              F-3

   Statement of Stockholders' Equity for the Years Ended February 28, 1998,
    1999 and February 29, 2000                                              F-4

   Statement of Cash Flows for the Years Ended February 28, 1998,
    1999 and February 29, 2000                                              F-5

   Notes to Financial Statements                                     F-6 - F-18



<PAGE>


INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
RMS Titanic, Inc.


We have  audited the  accompanying  balance  sheets of RMS  Titanic,  Inc. as of
February  28,  1999  and  February  29,  2000,  and the  related  statements  of
operations,  stockholders' equity, and cash flows for each of the three years in
the  period  ended  February  29,  2000.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of RMS  Titanic,  Inc. as of
February 28, 1999 and February 29, 2000,  and the results of its  operations and
its cash flows for each of the three  years in the  period  ended  February  29,
2000, in conformity with generally accepted accounting principles.




GOLDSTEIN GOLUB KESSLER LLP
New York, New York

May 26, 2000

                                                                             F-1
<PAGE>

<TABLE>
<CAPTION>





                                                                                                     RMS TITANIC, INC.


                                                                                                         BALANCE SHEET
----------------------------------------------------------------------------------------------------------------------

                                                                                      February 28,         February 29,
                                                                                             1999                 2000
----------------------------------------------------------------------------------------------------------------------

ASSETS

<S>                                                                             <C>                  <C>
Current Assets:
  Cash and cash equivalents                                                         $     720,000         $  3,065,000
  Accounts receivable                                                                   1,645,000              371,000
  Prepaid and refundable taxes                                                            429,000            1,163,000
  Prepaid expenses and other current assets                                               179,000               50,000
----------------------------------------------------------------------------------------------------------------------

      Total current assets                                                              2,973,000            4,649,000

Artifacts Recovered, at cost                                                            9,181,000            9,175,000

Deferred Income Tax Asset                                                                 509,000              634,000

Property and Equipment, net of accumulated depreciation
 of $319,000 and $622,000, respectively                                                 1,208,000              866,000

Other Assets                                                                               39,000               48,000

----------------------------------------------------------------------------------------------------------------------
      Total Assets                                                                    $13,910,000          $15,372,000
======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued liabilities                                           $  1,910,000         $  2,886,000
  Deferred income tax liability                                                                 -               79,000
  Deferred revenue                                                                        500,000              604,000

----------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                         2,410,000            3,569,000
----------------------------------------------------------------------------------------------------------------------

Commitments and Contingencies

Stockholders' Equity:
  Common stock - $.0001 par value; authorized 30,000,000 shares,
   issued and outstanding 16,187,128 shares                                                 2,000                2,000
  Additional paid-in capital                                                           13,916,000           14,240,000
  Accumulated deficit                                                                  (2,418,000)          (2,439,000)
----------------------------------------------------------------------------------------------------------------------
      Stockholders' equity                                                             11,500,000           11,803,000
----------------------------------------------------------------------------------------------------------------------
      Total Liabilities and Stockholders' Equity                                      $13,910,000          $15,372,000
======================================================================================================================
</TABLE>


                                               See Notes to Financial Statements

                                                                             F-2


<PAGE>

<TABLE>
<CAPTION>


                                                                                                          STATEMENT OF OPERATIONS
----------------------------------------------------------------------------------------------------------------------------------

                                                                                              February 28,             February 29,
Year ended                                                                               1998               1999              2000
----------------------------------------------------------------------------------------------------------------------------------

<S>                                                                             <C>               <C>               <C>
Revenue:
  Exhibitions and related merchandise sales                                      $  4,152,000       $  5,460,000       $ 6,136,000
  Licensing fees                                                                      115,000          3,495,000            17,000
  Merchandise and other                                                               244,000            680,000           221,000
  Sale of coal                                                                        147,000            222,000            59,000
----------------------------------------------------------------------------------------------------------------------------------
Total revenue                                                                       4,658,000          9,857,000         6,433,000
----------------------------------------------------------------------------------------------------------------------------------

Expenses:
  General and administrative                                                        1,176,000          1,733,000         6,154,000
  Depreciation and amortization                                                        23,000            246,000           303,000
  Expedition costs attributable to licensing fees                                           -          1,845,000            11,000
  Cost of merchandise sold                                                                  -             46,000            18,000
  Cost of coal sold                                                                    14,000             19,000             6,000
  Impairment loss on exhibitry equipment                                                    -            150,000            75,000
----------------------------------------------------------------------------------------------------------------------------------
Total expenses                                                                      1,213,000          4,039,000         6,567,000
----------------------------------------------------------------------------------------------------------------------------------

Income (loss) from operations                                                       3,445,000          5,818,000          (134,000)

Other income (expense):
  Interest income                                                                      11,000             52,000           113,000
  Interest expense and financing costs                                                 (6,000)                 -                 -
  Other income                                                                         67,000              5,000                 -
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before provision for income taxes                                     3,517,000          5,875,000           (21,000)

Provision for income taxes                                                            150,000          1,812,000               -0-
----------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                               $   3,367,000      $   4,063,000   $       (21,000)
==================================================================================================================================
Earnings per common share, basic and diluted                                    $         .21      $         .25   $             -
==================================================================================================================================

Weighted-average number of common shares outstanding                               16,181,868         16,187,128        16,187,128
==================================================================================================================================

</TABLE>

                                               See Notes to Financial Statements

                                                                             F-3
<PAGE>


<TABLE>
<CAPTION>

                                                                                                                  RMS TITANIC, INC.

-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                 STATEMENT OF STOCKHOLDERS' EQUITY

Years ended February 28, 1998, 1999 and February 29, 2000
-----------------------------------------------------------------------------------------------------------------------------------

                                                     Common Stock                Additional
                                                Number of                          Paid-in          Accumulated        Stockholders'
                                                  Shares          Amount           Capital            Deficit             Equity
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                          <C>               <C>            <C>                 <C>                 <C>
Balance as of March 1, 1997                    16,177,128        $2,000         $13,910,000         $(9,848,000)       $  4,064,000

Issuance of common stock                           10,000             -               6,000                  -                6,000

Net income                                              -             -                   -           3,367,000           3,367,000
------------------------------------------------------------------------------------------------------------------------------------

Balance as of February 28, 1998                16,187,128         2,000          13,916,000          (6,481,000)          7,437,000

Net income                                              -             -                   -           4,063,000           4,063,000
------------------------------------------------------------------------------------------------------------------------------------

Balance as of February 28, 1999                16,187,128         2,000          13,916,000          (2,418,000)         11,500,000

Issuance of compensatory stock options                  -             -             133,000                   -             133,000

Common stock to be issued in settlement of
 litigation                                             -             -             191,000                   -             191,000

Net loss                                                -             -                   -             (21,000)            (21,000)

------------------------------------------------------------------------------------------------------------------------------------
Balance as of February 29, 2000                16,187,128        $2,000         $14,240,000         $(2,439,000)        $11,803,000
====================================================================================================================================
</TABLE>

                                               See Notes to Financial Statements

                                                                             F-4
<PAGE>

<TABLE>
<CAPTION>


                                                                                                                  RMS TITANIC, INC.

                                                                                                           STATEMENT OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             February 28,              February 29,
Year ended                                                                              1998               1999                2000
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                             <C>                <C>                 <C>
Cash flows from operating activities:
  Net income (loss)                                                              $ 3,367,000        $ 4,063,000        $    (21,000)
------------------------------------------------------------------------------------------------------------------------------------
  Adjustments  to  reconcile  net  income (loss) to net
   cash  provided  by  operating activities:
    Depreciation and amortization                                                     23,000            246,000             303,000
    Impairment loss on exhibitry equipment                                                 -            150,000              75,000
    Rights granted in satisfaction of accrued liability                              (60,000)                 -                   -
    Amortization of deferred revenue                                              (1,465,000)           (15,000)            104,000
    Noncash settlements                                                             (559,000)                 -             191,000
    Noncash exhibition revenue                                                             -           (750,000)                  -
    Issuance of compensatory stock options                                                 -                  -             133,000
    Net deferred income tax benefit                                                        -           (509,000)            (46,000)
    Other                                                                            (69,000)           (57,000)             (3,000)
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                                    (606,000)        (1,005,000)          1,274,000
      (Increase) decrease in prepaid and refundable taxes                             42,000           (383,000)           (734,000)
      Decrease (increase) in prepaid expenses and other current assets                 5,000           (179,000)            129,000
      Increase (decrease) in income taxes payable                                    144,000           (144,000)                  -
      Increase in deferred revenue                                                   805,000            500,000                   -
      Increase (decrease) in accounts payable and accrued liabilities               (595,000)          (573,000)            976,000
------------------------------------------------------------------------------------------------------------------------------------
        Total adjustments                                                         (2,335,000)        (2,719,000)          2,402,000
------------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                                  1,032,000          1,344,000           2,381,000
------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Artifact recovery costs                                                                  -         (1,500,000)                  -
  Purchases of property and equipment                                                 (9,000)          (124,000)            (36,000)
------------------------------------------------------------------------------------------------------------------------------------
        Cash used in investing activities                                             (9,000)        (1,624,000)            (36,000)
------------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activity - repayment of notes payable                     (129,000)                 -                   -
------------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                                 894,000           (280,000)          2,345,000

Cash and cash equivalents at beginning of year                                       106,000          1,000,000             720,000
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                         $ 1,000,000       $    720,000          $3,065,000
====================================================================================================================================

Supplemental disclosure of cash flow information:
  Cash paid during the year for income taxes                                  $        6,000        $ 2,355,000          $1,207,000
====================================================================================================================================

Supplemental schedule of noncash financing and
 investing activities:
  Property and equipment acquired in settlement of certain
   exhibition obligations                                                      $     559,000       $    750,000         $     - 0 -
====================================================================================================================================
  Noncash purchases of property and equipment                                  $      88,000       $     77,000         $     - 0 -
====================================================================================================================================
  Issuance of compensatory stock options                                       $       - 0 -       $      - 0 -         $   133,000
====================================================================================================================================
  Common stock to be issued in settlement litigation                           $       - 0 -       $      - 0 -         $   191,000
====================================================================================================================================

</TABLE>
                                               See Notes to Financial Statements

                                                                             F-5

<PAGE>




                                                              RMS  TITANIC, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:


     RMS Titanic,  Inc. initially conducted business as Titanic Ventures Limited
     Partnership  ("TVLP").  In 1993, RMS Titanic,  Inc.  acquired all of TVLP's
     assets and assumed all of TVLP's liabilities. The transaction was accounted
     for as a "reverse acquisition" with TVLP deemed to be the acquiring entity.
     RMS Titanic,  Inc. and TVLP are referred to as the "Company" as the context
     dictates.

     The Company was formed in 1987 for the purposes of exploring  the wreck and
     surrounding  oceanic  area of the vessel the RMS Titanic  (the  "Titanic");
     obtaining  oceanic  material and  scientific  data  available  therefrom in
     various  forms,  including  still  and  moving  photography  and  artifacts
     ("Artifacts") from the wreck site; and utilizing such data and Artifacts in
     revenue-producing  activities  such  as  touring  exhibitions,   television
     programs and the sale of still photography.  The Company also earns revenue
     from the sale of coal and Titanic-related products.

     The Company was declared  salvor-in-possession of the Titanic, the sole and
     exclusive owner of any items recovered from the Titanic and, so long as the
     Company  is  salvor-in-possession,  the sole and  exclusive  owner of items
     recovered from the Titanic in the future, pursuant to a judgment entered in
     the Federal District Court for the Eastern District of Virginia.

     Since August 1987, the Company has completed five  expeditions and dives to
     the wreck of the Titanic and has recovered over 3,700 artifacts,  a section
     of the Titanic's hull and coal used on the Titanic.

     Prior to May 31, 1997, the Company was in the development stage.

     Artifacts  recovered  from the  Titanic are carried at the lower of cost of
     recovery or net  realizable  value  ("NRV").  The costs of recovery are the
     direct  costs of  chartering  of vessels  and related  crews and  equipment
     required to complete the dive  operations.  Costs associated with the care,
     management  and  preservation  of  recovered   Artifacts  are  expensed  as
     incurred.  A majority  of the  Artifacts  are  located  outside  the United
     States.

     To ascertain  that the aggregate  NRV of the  Artifacts  exceeds the direct
     costs  of  recovery  of  such  Artifacts,  the  Company  evaluates  various
     evidential  matter.  Such evidential  matter includes  documented sales and
     offerings  of  Titanic-related  memorabilia  by auction  houses and private
     dealers, an appraisal of certain Artifacts,  insurance coverage obtained in
     connection with the potential  theft,  damage or destruction of all or part
     of the Artifacts and other evidential  matter regarding the public interest
     in the Titanic.

     Under an  agreement  with the  Institute  of France  for the  Research  and
     Exploitation of the Sea ("IFREMER"), which served as the general contractor
     for  certain of the salvage  operations,  the  Company is  restricted  from
     selling certain Artifacts except to an entity that will make them available
     for exhibition to the public, as defined.

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly  liquid  investments  with a maturity of three  months or less to be
     cash equivalents.

     The Company  maintains cash in bank accounts  which,  at times,  may exceed
     federally  insured  limits.  The Company has not  experienced any losses on
     these accounts.

                                                                             F-6

<PAGE>

                                                              RMS  TITANIC, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
     Revenue from the licensing of the production and  exploitation of audio and
     visual recordings by third parties, related to the Company's expeditions is
     recognized at the time that the expedition and dive take place.

     Revenue from the licensing of still  photographs  is recognized at the time
     the rights are granted to the licensee.

     Revenue  from  exhibitions  is recorded  in the period that the  exhibition
     takes place. The amount recorded  represents the Company's share of the net
     revenue from the exhibition.

     Revenue from the granting of  sponsorship  rights  related to the Company's
     expeditions and dives is recognized at the completion of the expedition.

     Revenue sharing from the sale of Titanic-related  products by third parties
     is recognized when the item is sold.

     Coal  recovered  from the Titanic is being offered for sale by the Company.
     Revenue  from sales of such coal is  recognized  at the date of shipment to
     customers.   Recovery  costs  attributable  to  the  coal  are  charged  to
     operations as revenue from coal sales are recognized.

     Income tax expense  includes  income taxes  currently  payable and deferred
     taxes arising from temporary  differences  between financial  reporting and
     income tax bases of assets and  liabilities.  They are  measured  using the
     enacted tax rates and laws that will be in effect when the  differences are
     expected to reverse.

     Depreciation of property and equipment is provided for by the straight-line
     method over the estimated lives of the related assets.

     Statement of Financial  Accounting  Standards ("SFAS") No. 123,  Accounting
     for Stock-Based Compensation encourages, but does not require, companies to
     record  compensation cost for stock-based  employee  compensation  plans at
     fair  value.  The  Company  has  elected  to  account  for its  stock-based
     compensation   plans  using  the  intrinsic  value  method   prescribed  by
     Accounting Procedures Bulletin ("APB") Opinion No. 25, Accounting for Stock
     Issued to Employees, and to present pro forma earnings (loss) and per share
     information  as though it had adopted SFAS No. 123. Under the provisions of
     APB Opinion No. 25,  compensation cost for stock options is measured as the
     excess, if any, of the quoted market price of the Company's common stock at
     the date of the grant over the amount an  employee  must pay to acquire the
     stock.

     Basic earnings per common share ("EPS") is computed as net earnings divided
     by the weighted-average number of common shares outstanding for the period.
     Diluted EPS,  representing  the  potential  dilution  that would occur from
     common shares issuable through  stock-based  compensation,  including stock
     options,  restricted stock awards, warrants and other, is not presented for
     the years ended  February 28, 1998,  1999 and February 29, 2000 since there
     was no dilutive effect of potential  common shares or their inclusion would
     be anti-dilutive.

     The  Company  does  not  believe  that  any  recently  issued,  but not yet
     effective,  accounting  standards  will  have  a  material  effect  on  the
     Company's financial position, results of operations or cash flows.


                                                                             F-7
<PAGE>

                                                              RMS  TITANIC, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that  affect  reported  amounts in the  financial  statements.
     Actual results could differ from those estimates.

2. CORPORATE GOVERNANCE, DIRECTORS, OFFICERS AND OTHER MATTERS:

     On November  26,  1999,  two of the six members of the  Company's  board of
     directors,  Messrs.  Geller and Harris, and others, acting via an action by
     written  consent  of the  holders  of a  majority  of voting  rights of the
     Company's common stock, in lieu of a meeting,  removed Messrs.  Tulloch and
     Carlin as officers and directors of the Company and the remaining directors
     other than themselves.

     Subsequently,  the removed officers and directors  brought an action in the
     United States  District Court for Connecticut  against  Messrs.  Geller and
     Harris and others  seeking to obtain a judicial  reversal of their  removal
     from office.  Because of the  uncertainty as to the  individuals  who could
     conduct business on behalf of the Company during the time from November 26,
     1999 to the resolution of the dispute,  the Company's bank stopped honoring
     checks and froze all funds on deposit. In addition, a creditor notified the
     Company that it would not tender a  $2,000,000  payment  otherwise  due and
     payable until the dispute among current and former directors is resolved or
     settled.

     The  legal  action  was  resolved  on or  about  January  21,  2000  with a
     Settlement  Agreement whereby the Company agreed,  among other things,  to:
     (a) pay to Messrs.  Tulloch and Carlin an aggregate amount of $2,500,000 in
     three equal  installments to be completed  within six months of the date of
     the settlement;  (b) allow Messrs.  Tulloch and Carlin to submit documented
     requests for reimbursement of previously  unreimbursed  business  expenses;
     (c)  review/revise  payment  information  submitted to the Internal Revenue
     Service  with  respect to the  nature of  payments  previously  made to Mr.
     Carlin;  (d) the  authority  of  Messrs.  Tulloch  and  Carlin to  exercise
     previously  issued  options to acquire an aggregate of 1,000,000  shares of
     the Company's  common stock and to cause the Company to file a Registration
     Statement  with  respect to the  options  and  underlying  shares of common
     stock;  (e) indemnify the former  officers and directors who participate in
     the  Settlement  Agreement to the full extent of applicable  law and to the
     extent of officers' and  directors'  liability  under the existing  Company
     policy;  and (f)  reimburse  Messrs.  Tulloch  and  Carlin for the costs of
     health insurance for a period of 18 months.


                                                                             F-8
<PAGE>
                                                              RMS  TITANIC, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Messrs.  Tulloch and Carlin agreed,  among other things, to: (a) accept the
     $2,500,000 as full monetary payment (with the exception of previously noted
     unreimbursed business expenses) for any claims against the Company, Messrs.
     Geller and Harris and others in  connection  with this  action and  amounts
     otherwise due them in connection with their roles as officers and directors
     of the Company;  (b) send  appropriate  letters to the  Company's  bank and
     aforementioned   creditor  to  "unfreeze"  corporate  funds  and  to  allow
     operational cash flow to resume; (c) an 18 month standstill agreement which
     precludes  them from  interfering in Company  management  without the prior
     approval of the board of directors and shareholders;  (d) discontinue their
     efforts to have the Titanic determined to be a monument and to restrict the
     removal  of  materials  from the  Titanic  wreck  site;  (e) return all the
     Company's  property in their  possession,  including records and files, and
     provide a complete list of Company  Artifacts which are located anywhere in
     the world; (f) provide, for a three-month period,  cooperation in effecting
     a  professional  management  transfer;  (g) return  all monies  held in Mr.
     Carlin's  attorney  trust account along with an accounting of such; and (g)
     discontinue  access to the Company's  internet site and to sell back to the
     Company, at cost, another web site utilizing the name "Titanic".

     At February 29, 2000,  accounts payable and accrued  liabilities  include a
     balance of $1,608,000 payable to Messrs. Tulloch and Carlin under the terms
     of the  Settlement  Agreement.  During the year ended  February  29,  2000,
     $1,672,000  was charged to operations in  connection  with this  Settlement
     Agreement.

     The Company has  indemnified  all defendants in the legal action brought by
     the removed  officers  and  directors  from all legal fees and expenses and
     other costs associated with the action.

     The Company has not properly  filed fully  executed  Form 10-Ks for each of
     the years ended  February 28, 1997 and 1998.  As a result of the  Company's
     principal  accounting  officer  and a  majority  of the board of  directors
     declining to execute the  Company's  Form 10-K for the year ended  February
     28,  1997,  the Company  filed,  as an exhibit to its Form 8-K, the form of
     Form 10-K that had been approved for filing by Mr.  Tulloch,  the Company's
     principal  executive  officer  and a  director.  It is  believed  that  the
     Company's principal accounting officer and certain of its directors refused
     to execute the Form 10-K because they were uncertain as to whether the Form
     10-K reflected all necessary disclosures or contained disclosures that were
     materially inaccurate or misleading or otherwise inappropriate.  Similarly,
     for the year ended February 28, 1998,  the Company filed,  as an exhibit to
     its Form 8-K,  the form of Form 10-K that had been  approved  for filing by
     Mr.  Tulloch.  It is the  intention of the current  board of directors  and
     management to ascertain the effect of these actions and to take appropriate
     steps.

3. PROPERTY AND EQUIPMENT:

Property  and equipment,  at cost, consists of the
following:

<TABLE>
<CAPTION>

                                             February 28,         February 29,       Estimated
                                                 1999                2000           Useful Life
-------------------------------------------------------------------------------------------------

<S>                                          <C>                 <C>                  <C>
     Exhibitry equipment                     $1,436,000          $1,385,000           5 years
     Office equipment                            46,000              58,000           5 years
     Furniture and fixtures                      45,000              45,000           5 years
-------------------------------------------------------------------------------------------------
                                              1,527,000           1,488,000
     Less accumulated depreciation              319,000             622,000
-------------------------------------------------------------------------------------------------

                                             $1,208,000         $   866,000
=================================================================================================
</TABLE>


                                                                             F-9
<PAGE>

                                                             RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:


     Accounts payable and accrued liabilities consist of the following:

                                               February 28,         February 29,
                                                   1999                2000
                          ------------------------------------------------------
     Accrued compensation                        $1,196,000         $      -
     Accrued amounts under Settlement Agreement           -        1,608,000
     Amounts payable for professional and
      consulting fees                               366,000          694,000
     Other miscellaneous liabilities                348,000          584,000
--------------------------------------------------------------------------------
                                                 $1,910,000       $2,886,000
================================================================================


5. INCOME TAXES:

     The provision for income taxes consists of the following components:

                     February 28,            February 28,          February 29,
     Year ended          1998                   1999                  2000
-------------------------------------------------------------------------------

     Current:
      Federal          $  76,000             $1,761,000            $       -
      State and local     74,000                560,000               46,000
--------------------------------------------------------------------------------
                         150,000              2,321,000               46,000
--------------------------------------------------------------------------------
     Deferred:
      Federal                  -               (386,000)             (86,000)
      State and local          -               (123,000)              40,000
--------------------------------------------------------------------------------
                               -               (509,000)             (46,000)
--------------------------------------------------------------------------------
                        $150,000             $1,812,000            $     -0-
================================================================================


     The total  provision  for income taxes differs from that amount which would
     be computed by applying the U.S.  federal  income tax rate to income before
     provision  for income  taxes.  The  reasons  for these  differences  are as
     follows:

<TABLE>
<CAPTION>

                                               February 28,         February 28,      February 29,
     Year ended                                    1998                1999              2000
----------------------------------------------------------------------------------------------------

<S>                                                <C>                  <C>            <C>
     Statutory federal income tax rate             34.0  %              34.0 %          (34.0) %
     Effect of federal graduated tax rates
      and federal tax over accrual                    -                    -            (293.6)
     State income taxes, net of federal
      benefit                                       2.1                  9.5             327.6
     Use of net operating loss
      carryforwards                               (31.6)                 -                -
     Valuation allowance of temporary
      differences                                   -                   (8.7)             -
     Foreign tax credits                            -                   (2.0)             -
     Other, net                                     (.2)                (2.0)             -

----------------------------------------------------------------------------------------------------
           Effective income tax rate                4.3 %               30.8 %           -0- %
====================================================================================================

</TABLE>

                                                                            F-10
<PAGE>

                                                             RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

                              The  deferred  income  tax asset  consists  of the
following:

                                          February 28,             February 29,
                                              1999                    2000
--------------------------------------------------------------------------------

Deferred tax asset - expenses not currently
 deductible                                  $509,000                $634,000
Deferred tax liability - depreciation               -                 (79,000)

--------------------------------------------------------------------------------
    Net deferred tax asset                   $509,000                $555,000
================================================================================


     A valuation  allowance  of 100% of the  deferred  income tax asset had been
     provided at February 28, 1998 due to the uncertainty of future  realization
     of net operating  loss  carryforwards.  During the year ended  February 28,
     1999,  the entire  valuation  allowance  was reversed due to the  increased
     earnings  of the  Company.  Based on  management's  assessment,  it is more
     likely  than not that all the net  deferred  tax  assets  will be  realized
     through future taxable earnings.


6. STOCKHOLDERS' EQUITY:

     Prior to the  acquisition  of  TVLP's  assets,  the  Company  initiated  an
     exchange  agreement  with the holders of certain  Class B warrants in which
     the holders would receive shares of the Company's  common stock in exchange
     for certain  Class B warrants.  As of February  29,  2000,  the Company had
     received  20,700  Class B warrants  to be  exchanged  for 20,700  shares of
     common  stock of the  Company,  of which  16,500  shares still remain to be
     issued. There are 5,556 warrants outstanding as of February 29, 2000.

     During the year ended  February 28, 1998,  the Company issued 10,000 shares
     of common stock to a third party as settlement of certain litigation.

     At February 29, 2000,  100,000 shares of common stock have been recorded as
     issuable in connection with the settlement of a claim by a third party.



                                                                            F-11
<PAGE>
                                                            RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7. STOCK OPTIONS:     Transactions relating to stock options are as follows:

                                                         Weighted-
                                   Number of              Average
                                  Shares and             Exercise
                                   Options                Price
                                  Exercisable            per Share
--------------------------------------------------------------------------------

    Balance at March 1, 1997         580,000                $1.47
    Granted                          250,000                $1.00
--------------------------------------------------------------------------------
      Balance at February 28, 1998   830,000                $1.33

    Canceled                        (500,000)               $1.25
    Granted                          500,000                $1.25
--------------------------------------------------------------------------------
      Balance at February 28, 1999   830,000                $1.33

    Expired                         (330,000)               $1.46
    Granted                          500,000                $2.00
--------------------------------------------------------------------------------
      Balance at February 29, 2000 1,000,000                $1.63
================================================================================


     In January 1999,  the Company  extended the  expiration  date from April 6,
     1999 to April 6, 2004 of an  immediately  exercisable  option  to  purchase
     500,000 shares of the Company's common stock at a price of $1.25 per share.
     For  financial  reporting  purposes,  this has been treated as a new option
     grant and the cancellation of an existing option.

     In July 1999,  the  Company  granted to its  president  options to purchase
     500,000  shares of common stock.  The options are  exercisable at $2.00 per
     share through May 26, 2004. Compensation expense of $133,000 was charged to
     operations in connection with these options.

     The  following  table  summarizes  the  information   about  stock  options
     outstanding at February 29, 2000:

                                        Options Outstanding and Exercisable
                                        -----------------------------------
                                              Weighted-
                                               Average           Weighted-
                                              Remaining           Average
     Range of             Number             Contractual         Exercise
     Exercise Price     Outstanding         Life (Years)           Price
--------------------------------------------------------------------------------

        $1.25             500,000               4.10                $1.25

        $2.00             500,000               4.24                $2.00
--------------------------------------------------------------------------------

   $1.25 - $2.00        1,000,000                                   $1.63
================================================================================


                                                                            F-12
<PAGE>
                                                            RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     The Company has elected, in accordance with the provisions of SFAS No. 123,
     to apply the current  accounting rules under APB Opinion No. 25 and related
     interpretations  in  accounting  for stock  options and,  accordingly,  has
     presented the  disclosure-only  information as required by SFAS No. 123. If
     the Company had elected to  recognize  compensation  cost based on the fair
     value of the options  granted at the grant date as  prescribed  by SFAS No.
     123, the Company's net income (loss) and income (loss) per common share for
     the years ended February 28, 1999 and 2000 would  approximate the pro forma
     amounts shown in the table below.

                             February 28,        February 28,       February 29,
Year ended                      1998               1999                2000
--------------------------------------------------------------------------------
Reported net income (loss)   $3,367,000          $4,063,000       $     (21,000)
================================================================================
Pro forma net income (loss)  $3,367,000          $4,018,000         $(1,261,000)
================================================================================
Reported net income (loss)
 per common share            $      .21          $      .25       $       - 0 -
================================================================================
Pro forma net income (loss)
 per common share            $      .21          $      .25       $        (.08)
================================================================================

     The fair value of options  granted  (which is amortized to expense over the
     option vesting period in determining  the pro forma impact) is estimated on
     the date of grant  using the  Black-Scholes  option-pricing  model with the
     following weighted-average assumptions:

                             February 28,        February 28,       February 29,
Year ended                      1998               1999                2000
--------------------------------------------------------------------------------
Expected life of options       2 years             5 years            5 years
================================================================================
Risk-free interest rate           6.45%              4.60%              5.75%
================================================================================
Expected volatility of RMS
 Titanic, Inc.                   117.5%             113.3%             113.0%
================================================================================
Expected dividend yield on
 RMS Titanic, Inc.              $ - 0 -            $ - 0 -            $ - 0 -
================================================================================

     The  weighted-average  fair value of options granted during the years is as
     follows:

                             February 28,        February 28,       February 29,
Year ended                      1998               1999                2000
--------------------------------------------------------------------------------

Fair value of each
 option granted             $     .245          $        .90         $     1.87

Total number of
 options granted               250,000               500,000            500,000
--------------------------------------------------------------------------------
  Total fair value of all
  options granted           $   61,250          $    450,000         $  937,500
================================================================================


                                                                            F-13
<PAGE>

     In accordance with SFAS No. 123, the  weighted-average  fair value of stock
     options  granted  is based on a  theoretical  statistical  model  using the
     preceding Black-Scholes  assumptions.  In actuality,  because the Company's
     stock options do not trade on a secondary  exchange,  employees can receive
     no value or derive any  benefit  from  holding  stock  options  under these
     arrangements  without an increase in the market price of the Company.  Such
     an increase in stock price would benefit all stockholders commensurately.


8. LITIGATION:

     The  Company  was a party to certain  litigations  that have been  resolved
     during the year  ended  February  29,  2000  resulting  in  settlements  of
     $391,000 being charged to operations  for such year. The $391,000  consists
     of cash and 100,000 shares of the Company's  common stock that are issuable
     as of February 29, 2000.

     The  United  States  Department  of  State  and the  National  Oceanic  and
     Atmospheric Administration of the United States Department of Commerce (the
     "NOAA") are working together to implement an  International  Agreement (the
     "Agreement")  with entities in the United  Kingdom,  France and Canada that
     would diminish and/or divest the Company of its salvor-in-possession rights
     to the Titanic which had been awarded by the Federal District Court for the
     Eastern District of Virginia (the "District Court"). The Company has raised
     numerous  objections to the United States Department of State regarding the
     actions  of the  United  States  to  participate  in  efforts  to  reach an
     agreement  governing salvage activities of the Titanic.  The Agreement,  as
     drafted,  does not  recognize  the  existing  rights of the  Company in the
     Titanic that have been reaffirmed in the District Court and affirmed by the
     Court of Appeals of the Fourth  Circuit  and  provides  that the  Agreement
     enters  into  force  when any two of the party  states  sign it. The United
     States  Department  of Justice  has  represented  that,  the United  States
     believed  it  had  complied  with  the  RMS  Titanic  Memorial  Act  in the
     development of the international guidelines to implement the Agreement, but
     would  solicit  comments  from the  public  at large  regarding  the  draft
     international  guidelines and the NOAA will consider the comments, and then
     publish the final  international  guidelines.  On April 3, 2000 the Company
     filed a motion for  declaratory  judgment  asking that the  District  Court
     declare unconstitutional and inappropriate the efforts of the United States
     to reach an  international  agreement with the other parties and that it be
     precluded  from  seeking to  implement  such an  agreement.  The Company is
     awaiting the response of the United States to its complaint for declaratory
     judgment. The Company is unable to predict the outcome of this matter.

     The Company is a named defendant in an action brought by Suarez Corporation
     Industries  ("SCI") in the United  States  District  Court for the Southern
     District of New York.  Between October 1995 and March 1997, the Company and
     SCI entered into  various  agreements  providing  for the  exploitation  of
     artifacts  and other  merchandise  and arranging for a cruise and ancillary
     events,  including the financing and sharing of the division of contractual
     defined  profits,  all with  respect  to the  1996  research  and  recovery
     expedition of the Titanic by the Company.  SCI has brought  various  claims
     against  the  Company:  (a) The  first  claim is for  declaratory  judgment
     claiming that SCI is a co-salvor status. (b) The second claim is for breach
     of  contract  for which  SCI is  seeking  $8,000,000  because  it  incurred
     expenses in preparation  of the 1996  expedition  and  participated  in and
     performed  substantial  duties at sea on a salvage vessel in furtherance of
     the 1996  expedition.  (c) The third  claim is for  damages  because it was


                                                                            F-14
<PAGE>
                                                            RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     represented  that the Company had the  financial  capacity to fund the 1996
     expedition  or had  contracted  with third  parties  to ensure the  salvage
     operation. SCI alleges it suffered damages to the extent of $8,000,000. (d)
     The fourth  claim is for  conversion  and  alleges  that the  Company  took
     possession of light towers,  having a value of $800,000,  owned by SCI. The
     claim is for sustained  damages of $800,000 and punitive damages in the sum
     of $1,000,000.  (e) The fifth claim is for quantum meruit and SCI claims it
     is entitled to  $8,000,000  for the fair value of actions  performed by SCI
     and the  Company.  (f) The sixth claim is for breach of  contract  and as a
     result of such breach,  defendant is obligated to pay  $8,000,000.  (g) The
     seventh  claim  is  for  fraud  and  SCI  claims  that  it is  entitled  to
     $8,000,000.  (h) The eighth claim is for an additional conversion which SCI
     claims  it  suffered  damages  in the sum of  $8,000,000.  The  Company  is
     vigorously  defending SCI's claims and believes it has meritorious defenses
     to such claims.

     The Company is involved in various  claims and other legal actions  arising
     in the ordinary  course of business.  Management is of the opinion that the
     ultimate  outcome of these matters would not have a material adverse impact
     on the financial position of the Company or the results of its operations.


9. COMMITMENTS AND CONTINGENCIES:

          Compensation  amounting to $120,000 was charged to  operations  during
          each of the  years  ended  February  28,  1998 and 1999,  pursuant  to
          certain  employment-related  arrangements  with the former chairman of
          the board of directors  and  $430,000 for the year ended  February 29,
          2000 for that former  chairman of the board of directors  and a former
          director.  Additionally,  accounts  payable  and  accrued  liabilities
          include amounts payable to these  individuals in the aggregate  amount
          of  $1,196,000   at  February  28,  1999  in  connection   with  these
          arrangements.

          The Company has  noncancelable  operating leases for office space. The
          leases are subject to  escalation  for the Company's pro rata share of
          increases in real estate taxes and operating costs.

          Subsequent  to February  29,  2000,  the Company  entered into another
          noncancelable  operating lease for office space and vacated one of its
          previously used offices.

          Future  minimum lease payments for leases in effect as of February 29,
          2000 and entered into subsequent to that date are as follows:

          Year ending February 28(29),

                   2001                                         $170,000
                   2002                                          187,000
                   2003                                          187,000
                   2004                                          187,000
                   2005                                          137,000
                Thereafter                                        18,000
------------------------------------------------------------------------
                                                                $886,000
========================================================================

                                                                            F-15
<PAGE>

                                                           RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Rent expense charged to operations amounted to $75,000, $88,000 and $84,000
     for the  years  ended  February  28,  1998,  1999 and  February  29,  2000,
     respectively.


10. OTHER RELATED PARTY TRANSACTIONS:

     A limited partner of TVLP, Taurus  International  ("Taurus"),  has provided
     services  to  TVLP as an  agent  of TVLP in  France.  These  services  have
     included  securing  legal  representation,   insurance  coverage,   storage
     facilities and other relationships required to maintain the Artifacts while
     preservation  work has been  performed in France by  Electricite de France.
     During the year ended  February  28, 1998,  $38,000 of accounts  payable to
     Taurus  was  forgiven  and is  included  in other  income in the  Company's
     statement of income for that year.


     Included in prepaid  expenses and other current assets at February 28, 1999
     were loans to the Company's  president in the aggregate  amount of $73,000.
     Such  amount  was  discharged  as a  result  of  the  Settlement  Agreement
     discussed in Note 2.

     Included in accounts  payable and accrued  liabilities at February 28, 1999
     and February 29, 2000 is $45,000 and $25,000,  respectively, due to certain
     partners of TVLP.

11. EXHIBITIONS:

     During the  three-year  period ended  February  29,  2000,  the Company has
     presented  through  licensing  arrangements,  the following  exhibitions of
     Titanic's Artifacts and other Titanic memorabilia.

     Location                             Dates
     --------                             -----
     Norfolk, Virginia                    November 1996 - March 1997
     United States

     Memphis, Tennessee                   April 1997 - September 1997
     United States

     Hamburg, Germany                     May 1997 - September 1998

     St. Petersburg, Florida              November 1997 - May 1998
     United States

     Long Beach, California               May 1997 - March 1999
     United States

     Boston, Massachusetts                July 1998 - November 1998
     United States

     Japan (various cities)               July 1998 - July 1999

     Zurich, Switzerland                  November 1998 - May 1999

     St. Paul, Minnesota                  January 1999 - May 1999
     United States

     Atlantic City, New Jersey            May 1999 - September 1999
     United States


                                                                            F-16
<PAGE>

                                                           RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

     Included in exhibition  revenue for the year ended  February 28, 1998 is an
     amount  attributable to the transfer of ownership to the Company of certain
     exhibitry equipment aggregating $559,000 in satisfaction of amounts due the
     Company for its share of exhibition revenue earned.

     During the year ended  February 28, 1999,  the Company  received  ownership
     interest  in  certain  exhibitry  and  equipment  aggregating  $750,000  in
     satisfaction of exhibition fees due to the Company.

     In March 1999, the Company entered into an agreement  pursuant to which the
     Company granted the licensee 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 the licensee having
     the option to extend the term for up to four additional  one-year  periods.
     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,  the licensee 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 the licensee 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,  certain 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 a
     portion of the profits, if any, from a current Titanic-themed exhibition in
     Orlando,  Florida,  presented by the licensee and third parties. An officer
     and member of the board of directors is a related party to this exhibition.

12.   SUBSEQUENT EVENTS:


     Subsequent  to  February  29,  2000,  the  Company  entered  into a charter
     agreement to conduct an expedition  to the wreck of the Titanic  during the
     "open weather window" of the year 2000.

     Subsequent to February 29, 2000, the Company, through a newly formed wholly
     owned foreign subsidiary,  entered into an agreement for the services of an
     individual to January 3, 2003 for an annual  compensation of $125,000.  The
     Company  granted to the  individual  options,  expiring  March 31, 2003, to
     acquire:  (a) 83,333  shares of the  Company's  common stock at an exercise
     price of $3.00 per share;  (b) 83,333 shares of the Company's  common stock
     at an  exercise  price of $4.00 per  share;  and (c)  83,334  shares of the
     Company's common stock at an exercise price of $5.00 per share.

     In April 2000, the Company acquired certain  intangible  assets in exchange
     for 600,000 newly issued shares of its common stock valued at $1,069,000.



                                                                            F-17
<PAGE>

                                                           RMS  TITANIC, INC.
                                                  NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


     In April 2000 the  Company  adopted an  incentive  stock  option  plan (the
     "Plan")  under which options to  purchase 3,000,000 shares  of common stock
     may be granted to certain key  employees,  directors  or  consultants.  The
     exercise  price will be based on the fair  market  value of such  shares as
     determined  by the  Board of  Directors  at the  date of the  grant of such
     options.

     In April 2000,  the Company  entered into an employment  agreement  with an
     officer/director  which provides for an annual base salary of $120,000.  At
     the individual's option, he may elect to receive his compensation in shares
     of the Company's common stock.  For this purpose,  the common stock will be
     valued at 50% of its closing bid price as of the date of the election. A
     stock option to purchase  300,000 shares of the Company's common stock at a
     price of $1.625 per share,  which was the market  value of the stock at the
     time of grant, was also issued to the officer/director  under the Plan. The
     options expire in 10 years.

                                                                            F-18