##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K/A


Amendment
No. 1


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the Fiscal Year Ended February 28, 2006                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

COMMISSION FILE NO. 000-24452





PREMIER EXHIBITIONS, INC.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Florida                                                            |  | 20-1424922                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

3340 Peachtree Rd., NE, Suite 2250


Atlanta, GA 30326


(Address of principal executive offices)


Registrants telephone number, including area code:
404-842-2600





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


o þ


o þ


þ o


S-K 10-K 10-K. o


12b-2


o o þ


12b-2 o þ






10-K.










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##### 



EXPLANATORY
NOTE
       As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  February 28, 2005Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    685,000
    
    
    
    622,000
    
    
    
    (63,000
    )Accumulated deficit
    
    
    (12,665,000
    )
    
    
    (13,607,000
    )
    
    
    (942,000
    )Consolidated Statements of Operations  for the year ended February 28, 2005Depreciation and amortization(1)
    
    
    378,000
    
    
    
    441,000
    
    
    
    63,000Expedition costs(2)
    
    
    
    
    
    
    879,000
    
    
    
    879,000Net income
    
    
    (1,475,000
    )
    
    
    (2,417,000
    )
    
    
    (942,000
    )Basic income (loss) per common share
    
    
    (0.07
    )
    
    
    (0.12
    )
    
    
    (0.05
    )Diluted income (loss) per common share
    
    
    (0.07
    )
    
    
    (0.12
    )
    
    
    (0.05
    )Consolidated Statements of Cash Flows  for the year ended February 28, 2005Depreciation and amortization(1)
    
    
    378,000
    
    
    
    441,000
    
    
    
    63,000Increase (decrease) in prepaid expenses and other current assets(1)
    
    
    (1,264,000
    )
    
    
    (1,031,000
    )
    
    
    233,000Purchase of
exhibition licenses(1)
    
    
    
    
    
    
    (233,000
    )
    
    
    (233,000
    )Investment in salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Net cash provided (used) by operating activities
    
    
    595,000
    
    
    
    (51,000
    )
    
    
    (646,000
    )Net cash provided (used) by financing activities
    
    
    (1,613,000
    )
    
    
    (967,000
    )
    
    
    646,000Consolidated Statements of Stockholders Equity and Comprehensive Loss  for the year ended February 28, 2005Net loss
    
    
    (1,475,000
    )
    
    
    (2,417,000
    )
    
    
    (942,000
    )
 
     As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  February 28, 2006Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    3,607,000
    
    
    
    3,475,000
    
    
    
    (132,000
    )Deferred income taxes(3)
    
    
    2,100,000
    
    
    
    2,504,000
    
    
    
    404,000Accumulated deficit
    
    
    (7,717,000
    )
    
    
    (8,324,000
    )
    
    
    (607,000
    )Consolidated Statements of Operations  for the year ended February 28, 2006Depreciation and amortization(1)
    
    
    911,000
    
    
    
    980,000
    
    
    
    69,000Provision (benefit) for income taxes(3)
    
    
    (2,100,000
    )
    
    
    (2,504,000
    )
    
    
    (404,000
    )Net income
    
    
    4,948,000
    
    
    
    5,283,000
    
    
    
    335,000Basic income (loss) per common share
    
    
    0.21
    
    
    
    0.22
    
    
    
    0.01Diluted income (loss) per common share
    
    
    0.18
    
    
    
    0.19
    
    
    
    0.01Consolidated Statements of Cash Flows  for the year ended February 28, 2006Depreciation and amortization(1)
    
    
    911,000
    
    
    
    980,000
    
    
    
    69,000Increase (decrease) in deferred income taxes(3)
    
    
    (2,100,000
    )
    
    
    (2,504,000
    )
    
    
    (404,000
    )Consolidated Statements of Stockholders Equity and Comprehensive Income (loss)  for the year ended February 28, 2006Net Income
    
    
    4,948,000
    
    
    
    5,283,000
    
    
    
    335,000




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##### 



SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE
PRIVATE


SECURITIES LITIGATION REFORM ACT OF 1995


10-K


1



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##### 



ITEM 6.
    SELECTED FINANCIAL DATA 
 SELECTED FINANCIAL DATA
   Year ended February 28 (29),2002
    
    2003
    
    2004
    
    2005
    
    2006(In thousands, except per share and diluted weighted average shares)Statement of Operations Data:Revenue:Continuing operations
    
    $
    2,768
    
    
    $
    2,861
    
    
    $
    2,864
    
    
    $
    6,857
    
    
    $
    13,041Discontinued operations
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)Continuing operations
    
    
    (7,260
    )
    
    
    (827
    )
    
    
    (1,088
    )
    
    
    (2,417
    )
    
    
    5,283Discounted operations
    
    
    (168
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on sale
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) per share (basic):Continuing operations
    
    
    (0.38
    )
    
    
    (0.04
    )
    
    
    (0.06
    )
    
    
    (0.12
    )
    
    
    0.22Discontinued operations
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Income (loss) per share (diluted):Continuing operations
    
    
    (0.38
    )
    
    
    (0.04
    )
    
    
    (0.06
    )
    
    
    (0.12
    )
    
    
    0.19Discontinued operations
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Diluted weighted average number
of common shares outstanding
    
    
    18,058,573
    
    
    
    18,615,294
    
    
    
    18,960,047
    
    
    
    20,818,898
    
    
    
    28,230,491
 At February 28 (29),2002
    
    2003
    
    2004
    
    2005
    
    2006(In thousands)Balance Sheet Data:Total Assets
    
    $
    8,839
    
    
    $
    8,399
    
    
    $
    7,253
    
    
    $
    9,822
    
    
    $
    22,363Long Term Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Liabilities
    
    
    1,497
    
    
    
    1,849
    
    
    
    1,249
    
    
    
    3,085
    
    
    
    2,688Shareholders Equity
    
    
    7,342
    
    
    
    6,550
    
    
    
    6,004
    
    
    
    6,737
    
    
    
    19,675
 2




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##### 



Selected Quarterly Financial Information
 PeriodFiscal Year 2006
    
    ended
    
    
    5/31/05
    
    
    8/31/05
    
    
    11/30/05
    
    
    2/28/06Revenue
    
    
    
    
    
    $
    2,532
    
    
    $
    3,734
    
    
    $
    2,772
    
    
    $
    4,003Expenses
    
    
    
    
    
    
    1,996
    
    
    
    2,214
    
    
    
    2,869
    
    
    
    3,305Loss on sale of fixed assets
    
    
    
    
    
    
    84
    (2)
    
    
    
    
    
    
    
    
    
    
    Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168
    (3)
    
    
    Net income (loss)
    
    
    
    
    
    
    438
    
    
    
    1,486
    
    
    
    90
    
    
    
    3,269Net income (loss) per shareBasic
    
    
    
    
    
    
    0.02
    
    
    
    0.06
    
    
    
    0.00
    
    
    
    0.14Diluted
    
    
    
    
    
    
    0.02
    
    
    
    0.06
    
    
    
    0.00
    
    
    
    0.11
 PeriodFiscal Year 2005
    
    ended
    
    
    5/31/04
    
    
    8/31/04
    
    
    11/30/04
    
    
    2/28/05Revenue
    
    
    
    
    
    $
    391
    
    
    $
    2,381
    
    
    $
    2,432
    
    
    $
    1,653Expenses
    
    
    
    
    
    
    1,275
    
    
    
    2,670
    
    
    
    2,521
    
    
    
    2,764Expedition
costs
    
    
    
    
    
    
    
    
    
    
    421
    (5)
    
    
    326
    (5)
    
    
    132
    (5)Loss on sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356
    (4)Net income (loss)
    
    
    
    
    
    
    (887
    )
    
    
    (304
    )
    
    
    (103
    )
    
    
    1,123Net income (loss) per shareBasic
    
    
    
    
    
    
    (.05
    )
    
    
    (.02
    )
    
    
    .00
    
    
    
    (.05
    )Diluted
    
    
    
    
    
    
    (.05
    )
    
    
    (.02
    )
    
    
    .00
    
    
    
    (.05
    )
 
 (1)
    
    During the year ended February 28, 2005, we sold the SV Explorer, a 178 foot- 1050 ton ship
that was to be used in the expedition to the Titanic for $167,000 to Formaes ApS.
Skelgaardsvej 10, DK-9340 Asss, a Danish company. This sale resulted in a total loss on the
sale of fixed assets of $440,000. $84,000 of this loss was recorded during the quarter ended
May 31, 2005.
 (2)
    
    On November 30, 2005, we sold a 3% ownership interest in the RMS Carpathia to Legal Access
Technologies, Inc. for $500,000. In addition, we sold Legal Access Technologies a 25-year
license to conduct joint expeditions with us to the wreck of the Carpathia for the purpose of
exploring and salvaging the Carpathia for $200,000. Under the terms of this agreement, Legal
Access Technologies was obligated to make a $100,000 payment to us on December 12, 2005 and to
pay us the balance of $400,000 on February 15, 2006. In the event of default, we had the
option to terminate this agreement. We reflected this transaction as a gain on the sale of
the Carpathia interest of $459,000 during the quarter ended November 30, 2005. The payment
obligations of Legal Access Technologies were secured by 1,400,000 shares of Legal Access
Technologies common stock. Legal Access Technologies failed to make the second scheduled
payment and, on April 3, 2006, we terminated our agreement with the Legal Access Technologies.
In accordance with the agreement, we retained the Legal Access Technologies common stock
securing the payment obligations of Legal Access Technologies. As a result of this default
and our subsequent termination of the agreement, we reversed a gain of $459,000 net of the
gain from the retention of the marketable securities of $168,000 that was previously
recognized during our quarter ended November 30, 2005.
 (3)
    
    During the year ended February 28, 2005, we sold the SV Explorer, a 178 foot- 1050 ton ship
that was to be used in the expedition to the Titanic for $167,000 to Formaes ApS.
Skelgaardsvej 10, DK-9340 Asss, a Danish company. This sale resulted in a total loss on the
sale of fixed assets of $440,000. $84,000 of this loss was recorded during the quarter ended
May 31, 2005. The balance of $356,000 was recorded by us during the quarter ended February
28, 2005. See footnote 2 above.
 (4)
    
    During the year ended February 28, 2005, we incurred
expedition costs related to our seventh expedition to the Titanic and
Titanic wrecksite. The costs aggregated $879,000, of which $421,000
was recorded during the quarter ended August 31, 2004, $326,000
was recorded during the quarter ended November 30, 2004, and
$132,000 was recorded during the quarter ended February 28, 2005.
  3




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##### 



ITEM 7.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 
 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The discussion and analysis below should be read together with our financial statements and
the notes related to those financial statements, as well as the other financial information
included in this report.
 Introduction
  
    
    Overview of Our Business
    
    Key Exhibitions
    
    Results of Operations
    
    Liquidity and Capital Resources
    
    Off-Balance Sheet Arrangements
    
    Critical Accounting Policies
    
    Contractual Obligations
    
    Related Parties
    
    Recent Accounting Pronouncements
 Overview of Our Business
    4




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##### 



Key Exhibitions
 Titanic Exhibitions
   Bodies...The Exhibition and Bodies Revealed Exhibitions
    Co-Production Agreement
  5




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##### 



Results of Operations
 Year Ended February 28, 2006 as Compared to Year Ended February 28, 2005
          6




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##### 



Year Ended February 28, 2005 as Compared To Year Ended February 29, 2004
    7




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##### 



8




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##### 



Liquidity and Capital Resources
     As of February 28 (29),(in thousands)
    
    2004
    
    
    2005
    
    
    2006Working Capital
    
    $
    13
    
    
    $
    857
    
    
    $
    7,054Current Ratio
    
    
    1.01
    
    
    
    1.28
    
    
    
    3.62
 9




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##### 



10




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##### 



11




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##### 



12




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##### 



Contractual Obligations
     Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    1 year
    
    1-3 years
    
    3-5 years
    
    5 yearsSpecimen fixed rentals
    
    $
    23,000,000
    
    
    $
    4,000,000
    
    
    $
    10,000,000
    
    
    $
    9,000,000
    
    
    
    Real estate operating lease
    
    
    881,000
    
    
    
    306,000
    
    
    
    575,000
    
    
    
    
    
    
    
    Contractual commitment  Clear
Channel Entertainment, Inc.
    
    
    500,000
    
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    Note payable
 SAM Tour (USA), Inc.(1)
    
    
    500,000
    
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    Note payable
 shareholder(2)
    
    
    350,000
    
    
    
    350,000
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    25,231,000
    
    
    $
    5,656,000
    
    
    $
    10,575,000
    
    
    $
    9,000,000
    
    
    
    
 
 (1)
    
    Repaid in full during the quarter ended August 31, 2006.(2)
    
    Repaid in full during the quarter
ended May 31, 2006.  13




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##### 



Off-Balance Sheet Arrangements
  Critical Accounting Policies
   
    
    Revenue recognition;
    
    Accounts receivables;
    
    Accounting for income taxes;
    
    Legal contingencies;
    
    Property and equipment;
    
    Impairment of long-lived and intangible assets; and
    
    Capitalizing exhibition license costs.
 14




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##### 



Revenue Recognition
 Exhibition Revenue
 
    
    persuasive evidence of an exhibition arrangement with a customer exists;
    
    the exhibit is complete and, in accordance with the terms of the arrangement, has been delivered;
    
    the exhibition period of the arrangement has begun and/or the customer can begin its
exploitation, exhibition or sale;
    
    the arrangement fee is fixed or determinable; and
    
    collection of the arrangement fee is reasonably assured.
    Audio Tour Revenue
 Merchandise Revenue
 Sponsorship Revenue
 Licensing Revenue
 15




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##### 



Accounts Receivable
  Accounting for Income Taxes
   Legal Contingencies
  Property and Equipment
  Impairment of Long-Lived Assets and Other Intangibles
   16




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##### 



Accounting Policy for Capitalizing Exhibition
License Costs
     Recent Accounting Pronouncements
      17




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##### 



18




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##### 



ITEM 8.
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
  Report of Independent Registered Public Accounting Firm
    
    20Consolidated Financial Statements:Consolidated Balance Sheets at February 28, 2005 and 2006 (Restated)
    
    21Consolidated Statements of Operations for the
Years Ended February 29, 2004, February 28, 2005 (Restated) and February 28, 2006 (Restated)
    
    22Consolidated Statements of Stockholders Equity for the Years Ended
February 29, 2004, February 28, 2005 (Restated) and February 28, 2006 (Restated)
    
    23Consolidated Statements of Cash Flows for the Years Ended
February 29, 2004 (Restated), February 28, 2005 (Restated) and February 28,
2006 (Restated)
    
    24Notes to Consolidated Financial Statements
    

25
- 46
 19




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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
  20




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##### 



Premier Exhibitions, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 February 28,
    
    
    February 28,2005
    
    
    2006(Restated)
    
    
    (Restated)AssetsCurrent assets:Cash and cash equivalents (Note 3)
    
    $
    1,258,000
    
    
    $
    4,129,000Marketable securities (Note 3)
    
    
    
    
    
    
    570,000Accounts receivable
    
    
    1,057,000
    
    
    
    1,585,000Prepaid and refundable taxes
    
    
    222,000
    
    
    
    Prepaid expenses and other current assets (Note 3)
    
    
    1,405,000
    
    
    
    3,458,000Total current assets
    
    
    3,942,000
    
    
    
    9,742,000Artifacts owned, at cost (Note 2)
    
    
    4,476,000
    
    
    
    4,476,000Salvors lien (Note 2)
    
    
    1,000
    
    
    
    1,000Property and equipment, net (Note 3)
    
    
    738,000
    
    
    
    2,033,000Exhibition licenses, net (Note 3)
    
    
    622,000
    
    
    
    3,475,000Deferred income taxes (Note 4)
    
    
    
    
    
    
    2,504,000Other assets
    
    
    43,000
    
    
    
    132,000$
    9,822,000
    
    
    $
    22,363,000Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued liabilities (Note 3)
    
    
    1,660,000
    
    
    
    1,038,000Deferred revenue
    
    
    1,000,000
    
    
    
    300,000Notes payable
    
    
    425,000
    
    
    
    1,350,000Total current liabilities
    
    
    3,085,000
    
    
    
    2,688,000Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock; $.0001 par value; authorized 40,000,000 shares;
issued and outstanding 22,299,939 and 26,062,089 shares
at February 28, 2005 and 2006, respectively
    
    
    2,000
    
    
    
    3,000Common stock payable
    
    
    
    
    
    
    920,000Additional paid-in capital
    
    
    20,316,000
    
    
    
    27,178,000Accumulated deficit
    
    
    (13,607,000
    )
    
    
    (8,324,000
    )Accumulated other comprehensive income (loss)
    
    
    26,000
    
    
    
    (102,000
    )Total stockholders equity
    
    
    6,737,000
    
    
    
    19,675,000$
    9,822,000
    
    
    $
    22,363,000
  21




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##### 



Premier Exhibitions, Inc. and Subsidiaries
Consolidated Statements of Operations
 Year Ended
    
    
    Year Ended
    
    
    Year EndedFebruary 29,
    
    
    February 28,
    
    
    February 28,2004
    
    
    2005
    
    
    2006(Restated)
    
    
    (Restated)Revenue:Exhibition revenues
    
    $
    2,677,000
    
    
    $
    6,320,000
    
    
    $
    12,217,000Merchandise and other
    
    
    119,000
    
    
    
    507,000
    
    
    
    722,000Sale of coal
    
    
    68,000
    
    
    
    30,000
    
    
    
    102,000Total revenue
    
    
    2,864,000
    
    
    
    6,857,000
    
    
    
    13,041,000Cost of revenue:Exhibition costs
    
    
    
    
    
    
    2,891,000
    
    
    
    2,672,000Cost of merchandise sold
    
    
    110,000
    
    
    
    257,000
    
    
    
    102,000Cost of coal sold
    
    
    21,000
    
    
    
    9,000
    
    
    
    10,000Total cost of revenue (exclusive of depreciation and amortization
shown separately below)
    
    
    131,000
    
    
    
    3,157,000
    
    
    
    2,784,000Gross profit
    
    
    2,733,000
    
    
    
    3,700,000
    
    
    
    10,257,000Operating expenses:General and administrative
    
    
    3,402,000
    
    
    
    4,397,000
    
    
    
    6,620,000Depreciation and amortization
    
    
    253,000
    
    
    
    441,000
    
    
    
    980,000Litigation settlement
    
    
    175,000
    
    
    
    
    
    
    
    Loss on sale of fixed assets
    
    
    
    
    
    
    356,000
    
    
    
    84,000Expedition costs
    
    
    
    
    
    
    879,000
    
    
    
    Total operating expenses
    
    
    3,830,000
    
    
    
    6,073,000
    
    
    
    7,684,000Income (loss) from operations
    
    
    (1,097,000
    )
    
    
    (2,373,000
    )
    
    
    2,573,000Other income and expenses:Interest income
    
    
    9,000
    
    
    
    2,000
    
    
    
    85,000Interest expense
    
    
    
    
    
    
    (46,000
    )
    
    
    (47,000
    )Other income
    
    
    
    
    
    
    
    
    
    
    168,000Total other income and expenses
    
    
    9,000
    
    
    
    (44,000
    )
    
    
    206,000Income (loss) before provision for income taxes
    
    
    (1,088,000
    )
    
    
    (2,417,000
    )
    
    
    2,779,000Provision (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    (2,504,000
    )Net income (loss)
    
    $
    (1,088,000
    )
    
    $
    (2,417,000
    )
    
    $
    5,283,000Net income (loss) per share:Basic income (loss) per common share
    
    $
    (0.06
    )
    
    $
    (0.12
    )
    
    $
    0.22Diluted income (loss) per common share
    
    $
    (0.06
    )
    
    $
    (0.12
    )
    
    $
    0.19Shares used in basic per share calculations
    
    
    18,960,047
    
    
    
    20,818,898
    
    
    
    24,081,186Shares used in diluted per share calculations
    
    
    18,960,047
    
    
    
    20,818,898
    
    
    
    28,230,491
  22




---



##### 



Premier Exhibitions, Inc. and Subsidiaries
 
 Consolidated Statements of Stockholders Equity and Comprehensive Loss
 Years
ended February, 29, 2004, February 28, 2005 (Restated), and
February 28, 2006 (Restated)
 AccumulatedCommon Stock
    
    
    Common
    
    
    Additional
    
    
    
    
    
    
    OtherNumber of
    
    
    
    
    
    
    Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Payable
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    EquityBalance, February 28, 2003
    
    
    18,675,047
    
    
    $
    2,000
    
    
    $
    
    
    
    $
    16,650,000
    
    
    $
    (10,102,000
    )
    
    $
    
    
    
    $
    6,550,000Common stock issued for services
    
    
    450,000
    
    
    
    
    
    
    
    
    
    
    
    108,000
    
    
    
    
    
    
    
    
    
    
    
    108,000Issuance of compensatory stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    434,000
    
    
    
    
    
    
    
    
    
    
    
    434,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,088,000
    )
    
    
    
    
    
    
    (1,088,000
    )Balance, February 29, 2004
    
    
    19,125,047
    
    
    $
    2,000
    
    
    $
    
    
    
    $
    17,192,000
    
    
    $
    (11,190,000
    )
    
    $
    
    
    
    $
    6,004,000Common stock issued for services
    
    
    805,000
    
    
    
    
    
    
    
    
    
    
    
    277,000
    
    
    
    
    
    
    
    
    
    
    
    277,000Issuance of common stock in exchange for options
    
    
    900,000
    
    
    
    
    
    
    
    
    
    
    
    1,569,000
    
    
    
    
    
    
    
    
    
    
    
    1,569,000Issuance of common stock in equity raise
    
    
    1,469,892
    
    
    
    
    
    
    
    
    
    
    
    1,278,000
    
    
    
    
    
    
    
    
    
    
    
    1,278,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,417,000
    )
    
    
    
    
    
    
    (2,417,000
    )Foreign currency translation gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,000
    
    
    
    26,000Balance,
February 28, 2005 (Restated)
    
    
    22,299,939
    
    
    $
    2,000
    
    
    $
    
    
    
    $
    20,316,000
    
    
    $
    (13,607,000
    )
    
    $
    26,000
    
    
    $
    6,737,000Common stock issued for exercise of warrants and options
    
    
    87,014
    
    
    
    
    
    
    
    97,000
    
    
    
    69,000
    
    
    
    
    
    
    
    
    
    
    
    166,000Common stock issued for equity investment
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    
    
    
    
    
    
    
    
    500,000Common stock and warrants issued for acquisition
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    608,000
    
    
    
    
    
    
    
    
    
    
    
    608,000Common Stock issued in exchange for surrender of warrants
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common Stock and warrants issued for private placement
    
    
    2,975,136
    
    
    
    
    
    
    
    
    
    
    
    4,968,000
    
    
    
    
    
    
    
    
    
    
    
    4,968,000Issuance of employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    256,000
    
    
    
    
    
    
    
    
    
    
    
    256,000Issuance of consulting warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    462,000
    
    
    
    
    
    
    
    
    
    
    
    462,000Issuance of consulting stock for services
    
    
    
    
    
    
    
    
    
    
    823,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    823,000Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,283,000
    
    
    
    
    
    
    
    5,283,000Other comprehensive loss:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized loss on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,000
    )
    
    
    (98,000
    )Foreign currency translation loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,000
    )
    
    
    (30,000
    )Total other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128,000
    )
    
    
    (128,000
    )Balance,
February 28, 2006 (Restated)
    
    
    26,062,089
    
    
    $
    3,000
    
    
    $
    920,000
    
    
    $
    27,179,000
    
    
    $
    (8,324,000
    )
    
    $
    (102,000
    )
    
    $
    19,675,000
  23




---



##### 



Premier Exhibitions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
 Year Ended
    
    
    Year Ended
    
    
    Year EndedFebruary 29,
    
    
    February 28,
    
    
    February 28,2004
    
    
    2005
    
    
    2006(Restated)
    
    
    (Restated)
    
    
    (Restated)Cash flows from operating activities:Net income (loss)
    
    $
    (1,088,000
    )
    
    $
    (2,417,000
    )
    
    $
    5,283,000Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:Depreciation and amortization
    
    
    253,000
    
    
    
    441,000
    
    
    
    980,000Issuance of common stock for interest expense
    
    
    
    
    
    
    6,000
    
    
    
    Issuance of common stock in exchange for options
    
    
    
    
    
    
    1,569,000
    
    
    
    Issuance of common stock and warrants for services
    
    
    108,000
    
    
    
    277,000
    
    
    
    1,285,000Issuance of compensatory stock options
    
    
    434,000
    
    
    
    
    
    
    
    256,000(Increase) decrease in cost of artifacts
    
    
    
    
    
    
    3,000
    
    
    
    (1,000
    )Loss on disposal of fixed assets
    
    
    
    
    
    
    356,000
    
    
    
    84,000Other income from default on sale of Carpathia
    
    
    
    
    
    
    
    
    
    
    (168,000
    )Changes in operating assets and liabilities:(Increase) decrease in accounts receivable
    
    
    (225,000
    )
    
    
    (704,000
    )
    
    
    (528,000
    )(Increase) decrease in deferred income taxes
    
    
    
    
    
    
    
    
    
    
    (2,504,000
    )(Increase) decrease in prepaid and
refundable taxes
    
    
    290,000
    
    
    
    (1,000
    )
    
    
    222,000(Increase) decrease in prepaid expenses and
other current assets
    
    
    618,000
    
    
    
    (1,031,000
    )
    
    
    (2,053,000
    )(Increase) decrease in other assets
    
    
    (715,000
    )
    
    
    39,000
    
    
    
    596,000Increase (decrease) in deferred revenue
    
    
    (735,000
    )
    
    
    1,000,000
    
    
    
    (700,000
    )Increase (decrease) in accounts payable and
accrued liabilities
    
    
    135,000
    
    
    
    411,000
    
    
    
    (622,000
    )Total adjustments
    
    
    163,000
    
    
    
    2,366,000
    
    
    
    (3,153,000
    )Net cash provided by operating activities
    
    
    (925,000
    )
    
    
    (51,000
    )
    
    
    2,130,000Cash flows used by investing activities:Purchases of property and equipment
    
    
    (21,000
    )
    
    
    (964,000
    )
    
    
    (1,774,000
    )Purchase of exhibition licenses
    
    
    (452,000
    )
    
    
    (233,000
    )
    
    
    (2,082,000
    )Proceeds from sale of fixed assets
    
    
    
    
    
    
    230,000
    
    
    
    Purchase of certificate of deposit
    
    
    
    
    
    
    
    
    
    
    (500,000
    )Net cash used by investing activities
    
    
    (473,000
    )
    
    
    (967,000
    )
    
    
    (4,356,000
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    
    
    
    
    500,000
    
    
    
    2,425,000Principal payments on notes payable
    
    
    
    
    
    
    (75,000
    )
    
    
    (2,932,000
    )Proceeds from option and warrant exercises
    
    
    
    
    
    
    
    
    
    
    166,000Proceeds from sale of common stock
    
    
    
    
    
    
    1,278,000
    
    
    
    5,468,000Net cash provided by financing activities
    
    
    
    
    
    
    1,703,000
    
    
    
    5,127,000Effects of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    26,000
    
    
    
    (30,000
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,398,000
    )
    
    
    711,000
    
    
    
    2,871,000Cash and cash equivalents at beginning of year
    
    
    1,945,000
    
    
    
    547,000
    
    
    
    1,258,000Cash and cash equivalents at end of year
    
    $
    547,000
    
    
    $
    1,258,000
    
    
    $
    4,129,000Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    
    
    
    $
    40,000
    
    
    $
    39,000




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Business, Summary of Significant Accounting Policies and Recent Accounting Pronouncements
         25




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 R.M.S.
Titanic, Inc. v. The Wrecked and Abandoned Vessel...
 The Blackwall, 77. U.S. (10 Wall.) 1,14 (1869)
   26




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 27




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
    
    persuasive evidence of an exhibition arrangement with a customer exists;
    
    the exhibit is complete and, in accordance with the terms of the arrangement, has been delivered;
    
    the exhibition period of the arrangement has begun and/or the customer can begin its
exploitation, exhibition or sale;
    
    the arrangement fee is fixed or determinable; and
    
    collection of the arrangement fee is reasonably assured.
    Exhibitry equipment
    
    5   yearsMarine equipment
    
    10 yearsOffice equipment
    
    5   yearsFurniture and fixtures
    
    5   years
    Recent Accounting Pronouncements
  28




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       29




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Note 2. Artifacts
   February 28, 2005
    
    February 28, 2006Artifacts recovered, Titanic
    
    $
    3,102,000
    
    
    $
    3,102,000Artifacts, Carpathia
    
    
    1,374,000
    
    
    
    1,374,000$
    4,476,000
    
    
    $
    4,476,000
  The Blackwall, 77. U.S. (10 Wall.) 1,14
(1869)
 30




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    31




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3. Balance Sheet Details
  February 28, 2005
    
    February 28, 2006Cash
    
    $
    1,258,000
    
    
    $
    729,000Money market mutual funds
    
    
    
    
    
    
    3,400,000Total
    
    $
    1,258,000
    
    
    $
    4,129,000Certificate of deposit
    
    
    
    
    
    
    500,000Securities
    
    
    
    
    
    
    70,000Total
    
    $
    
    
    
    $
    570,000
  February 28, 2005
    
    February 28, 2006Deposits
    
    $
    5,000
    
    
    $
    6,000Prepaid insurance
    
    
    118,000
    
    
    
    38,000Prepaid commissions
    
    
    60,000
    
    
    
    60,000Reimbursable expenses  exhibitions (1)
    
    
    109,000
    
    
    
    1,165,000Prepaid
lease payments
    
    
    
    
    
    
    921,000Prepaid services
    
    
    1,079,000
    
    
    
    1,242,000Deferred financing costs
    
    
    34,000
    
    
    
    26,000Total
    
    $
    1,405,000
    
    
    $
    3,458,000
  February 28, 2005
    
    February 28, 2006Exhibitry equipment
    
    $
    2,323,000
    
    
    $
    3,955,000Office equipment
    
    
    227,000
    
    
    
    276,000Furniture and fixtures
    
    
    164,000
    
    
    
    173,0002,714,000
    
    
    
    4,404,000Less accumulated depreciation
    
    
    1,976,000
    
    
    
    2,371,000Total
    
    $
    738,000
    
    
    $
    2,033,000
 
 (1)
    
    Reimbursable expenses  exhibitions are primarily costs incurred by the Company for the
installation of exhibitions that are reimbursed from either a museum or a co-production
partner. The nature of these installation costs include travel related expenses for the
installation crew, labor, materials, artifact and specimen freight costs and other costs
related to opening an exhibition. These costs are normally reimbursed within 45 to 60 days of
opening of an exhibition.
 32




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   February 28, 2005
    
    February 28, 2006Exhibition License (April 2004)
    
    $
    685,000
    
    
    $
    685,000Exhibition License (May 2005)
    
    
    
    
    
    
    3,438,000685,000
    
    
    
    4,123,000Less accumulated amortization
    
    
    63,000
    
    
    
    648,000Total
    
    $
    622,000
    
    
    $
    3,475,000
      February 28, 2005
    
    February 28, 2006Professional and consulting fees payable
    
    $
    1,231,000
    
    
    $
    280,000Settlement accruals
    
    
    107,000
    
    
    
    599,000Other
    
    
    322,000
    
    
    
    159,000$
    1,660,000
    
    
    $
    1,038,000
 33




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Income Taxes
  Year Ended February 28 (29),2004
    
    2005
    
    2006Current:Statutory federal income tax rate
    
    
    (34.0
    )%
    
    
    (34.0
    )%
    
    
    34.0
    %State and local net of federal deferred
    
    
    (6.0
    )%
    
    
    (6.0
    )%
    
    
    6.0
    %Net operating loss carry-forward
    
    
    40.0
    %
    
    
    40.0
    %
    
    
    (40.0
    )%Reverse of valuation allowance
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (74.0
    )%Effective income tax rate
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (74.0
    %)
  Year Ended February 28,2005
    
    2006Net operating loss carry-forward
    
    $
    2,800,000
    
    
    $
    2,504,000Deferred tax asset  expenses not currently deductible
    
    
    
    
    
    
    Valuation allowance for doubtful tax assets
    
    
    (2,800,000
    )
    
    
    $
    
    
    
    $
    2,504,000
   34




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5. Stockholders Equity
 Income (Loss) Per Share
    Year Ended February 28 (29),2004
    
    2005
    
    2006(Restated)
    
    (Restated)Numerator:Net income (loss)
    
    $
    (1,088,000
    )
    
    $
    (2,417,000
    )
    
    $
    5,283,000Denominator:Basic weighted-average shares outstanding
    
    
    18,960,047
    
    
    
    20,818,898
    
    
    
    24,081,186Effect of dilutive stock options & warrants
    
    
    
    
    
    
    
    
    
    
    4,149,305Diluted weighted-average shares outstanding
    
    
    18,960,047
    
    
    
    20,818,898
    
    
    
    28,230,491Net income (loss) per share:Basic
    
    $
    (0.06
    )
    
    $
    (0.12
    )
    
    $
    0.22Diluted
    
    $
    (0.06
    )
    
    $
    (0.12
    )
    
    $
    0.19
 Other Comprehensive (Loss) Income
  February 28, 2005
    
    February 28, 2006Foreign currency translation adjustments
    
    $
    26,000
    
    
    $
    (30,000
    )Unrealized loss on marketable securities
    
    
    
    
    
    
    (98,000
    )$
    26,000
    
    
    $
    (128,000
    )
 Common Stock Issuances
  35




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         Note 6. Stock Options
  36




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   February 29,
    
    February 28,
    
    February 28,2004
    
    2005
    
    2006Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedNumber of
    
    Average
    
    Number of
    
    Average
    
    Number of
    
    AverageUnexercised
    
    Exercise
    
    Unexercised
    
    Exercise
    
    Unexercised
    
    ExerciseOptions
    
    Price
    
    Options
    
    Price
    
    Options
    
    PriceOutstanding at
beginning of year
    
    
    3,750,000
    
    
    $
    1.24
    
    
    
    4,450,000
    
    
    $
    0.89
    
    
    
    2,350,000
    
    
    $
    0.36Granted
    
    
    950,000
    
    
    
    0.31
    
    
    
    700,000
    
    
    
    1.64
    
    
    
    1,503,846
    
    
    
    2.04Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (224,174
    )
    
    
    0.73Cancelled
    
    
    (250,000
    )
    
    
    4.00
    
    
    
    (2,800,000
    )
    
    
    1.90
    
    
    
    (83,000
    )
    
    
    0.32Outstanding at end
of year
    
    
    4,450,000
    
    
    $
    0.89
    
    
    
    2,350,000
    
    
    $
    0.36
    
    
    
    3,546,672
    
    
    $
    1.05
      37




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     Options Outstanding
    
    Options ExercisableWeightedOptions
    
    Average
    
    
    
    
    
    OptionsOutstanding
    
    Remaining
    
    Weighted-
    
    Exercisable
    
    Weighted-at
    
    Contractual
    
    Average
    
    at
    
    AverageFebruary 28,
    
    Life
    
    Exercise
    
    February 28,
    
    ExerciseRange of Exercise Prices
    
    2006
    
    (Years)
    
    Price
    
    2006
    
    Price$.28 to $.32
    
    
    825,000
    
    
    
    7.78
    
    
    $
    0.31
    
    
    
    825,000
    
    
    $
    0.31$.40 to $.65
    
    
    1,410,000
    
    
    
    4.93
    
    
    $
    0.40
    
    
    
    1,410,000
    
    
    $
    0.40$.85 to $3.65
    
    
    1,311,672
    
    
    
    9.43
    
    
    $
    2.20
    
    
    
    240,396
    
    
    $
    1.023,546,672
    
    
    
    
    
    
    
    
    
    
    
    2,475,396
    2004
    
    
    2005
    
    
    2006Dividend yield:
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility:
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %Risk-free interest rate:
    
    
    4.75
    %
    
    
    4.75
    %
    
    
    4.75
    %Expected lives:
    
    
    7.07
    
    
    
    6.07
    
    
    
    8.00
       38




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##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7. Litigation and Other Legal Matters
 Status of International Treaty Concerning the Titanic Wreck
    Status of Salvor-in-Possession and Interim Salvage Award Proceedings
   39




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Other Ongoing Litigation
   Stefano Arts
v. Exhibitions International, LLC, et al,
 RMS Titanic, Inc. v
Georgette Allthinos, International Advantage Inc. and Renaissance
Entertainment, EPE
 Settled Litigation and Other Concluded Matters
 Plastination Company v. Premier Exhibitions, Inc.
 Lawrence DAddario v. Arnie Geller, Gerald
Couture, Joe Marsh and R.M.S. Titanic, Inc
 Dave Shuttle and Barbara Shuttle v. Arnie
Geller, G. Michael Harris, Gerald Couture, and R.M.S. Titanic, Inc DAddario
 DAddario Shuttle
 
    
    The Companys board of directors must be comprised of a majority of independent
directors.
    
    The Company must have an audit committee of the board of directors, comprised
exclusively of independent directors, which, among other things, has oversight
responsibility for the Companys internal control and corporate compliance.
    
    The Company must have a corporate governance committee of the board of
directors, comprised of a majority of independent directors, which, among other
things, oversees the Companys
 40




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 implementation of the corporate governance plan, reviews all contracts between the
Company and its officers, pre-screens director nominees, and reviews the
compensation of its five most highly paid officers.
    
    The Companys independent directors must meet at least twice each calendar year
and have the authority to retain counsel, accountants, or other experts.
    
    The Companys directors must review the compensation paid to them by the Company
and make any appropriate changes.
    
    All persons nominated to become a director must satisfy certain requirements and
possess core competencies.
    
    Once a year over the five-year period for which the corporate governance plan is
applicable, the Companys board of directors must submit a written report to
counsel representing the former plaintiff confirming our compliance with the
corporate governance plan.
  DAddario Shuttle DAddario Shuttle
 Note 8. Notes Payable and Long-Term Debt
     Exhibition Location
    
    Amount Paid
    
    

Repayment DateTampa:
    
    $
    425,000
    
    
    August 18, 2005New York:
    
    $
    500,000
    
    
    November 19, 2005Atlanta:
    
    $
    500,000
    
    
    February 28, 2006Mexico City,
Mexico
    
    $
    500,000
    
    
    February 28, 2006Total:
    
    $
    1,925,000
   41




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Note 9. Commitments and Contingencies
       Lease Arrangements
   42




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Year Ended February 28 (29),2004
    
    2005
    
    2006Real estate fixed rentals
    
    $
    94,000
    
    
    $
    124,000
    
    
    $
    207,000Specimen fixed rentals
    
    
    
    
    
    
    
    
    
    
    1,250,000$
    94,000
    
    
    $
    124,000
    
    
    $
    1,457,000
  Fiscal Year2007
    
    $
    4,306,0002008
    
    
    5,320,0002009
    
    
    5,255,0002010
    
    
    5,000,0002011
    
    
    4,000,000Thereafter
    
    
    $
    23,881,000
 Note 10. Related Party Transactions
    43




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 11. Acquisitions
   Expected life of options:
    
    2 yearsRisk-free interest rate:
    
    
    4.75
    %Expected volatility:
    
    
    100.0
    %Expected dividend yield:
    
    $
    -0-
  Note 12. Employee Savings Plans
  44




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 13. Quarterly Financial Data (Unaudited)
 Quarter EndedAs Originally
    
    
    
    As Originally
    
    
    
    As Originally
    
    
    
    As OriginallyReported
    
    As Restated
    
    Reported
    
    As Restated
    
    Reported
    
    As Restated
    
    Reported
    
    As RestatedMay 31,
    
    May 31,
    
    August 31,
    
    August 31,
    
    November 30,
    
    November 30,
    
    February 28,
    
    February 28,Fiscal 2006
    
    2005
    
    2005
    
    2005
    
    2005
    
    2005
    
    2005
    
    2006
    
    2006Revenues
    
    $
    2,532,000
    
    
    $
    2,532,000
    
    
    $
    3,734,000
    
    
    $
    3,734,000
    
    
    $
    2,772,000
    
    
    $
    2,772,000
    
    
    $
    4,003,000
    
    
    $
    4,003,000Expenses
    
    
    2,064,000
    
    
    
    1,996,000
    (1)
    
    2,197,000
    
    
    
    2,214,000
    (1)
    
    2,852,000
    
    
    2,869,000
    (1)(4)
    
    3,287,000
    
    
    
    3,305,000
    (1)Net income
    
    
    455,000
    
    
    
    438,000
    (1)
    
    1,503,000
    
    
    
    1,486,000
    (1)
    
    423,000
    
    
    90,000
    (1)(4)
    
    2,883,000
    
    
    
    3,269,000
    (1)Basic income per common share
    
    
    0.02
    
    
    
    0.02
    
    
    
    0.07
    
    
    
    0.06
    (1)
    
    0.02
    
    
    0.00
    (1)(4)
    
    0.11
    
    
    
    0.14
    (1)(3)Diluted income per common share
    
    
    0.02
    
    
    
    0.02
    
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.02
    
    
    0.00
    (1)(4)
    
    0.10
    
    
    
    0.11
    (1)(3)Quarter EndedAs Originally
    
    
    
    As Originally
    
    
    
    As Originally
    
    
    
    As OriginallyReported
    
    As Restated
    
    Reported
    
    As Restated
    
    Reported
    
    As Restated
    
    Reported
    
    As RestatedMay 31,
    
    May 31,
    
    August 31,
    
    August 31,
    
    November 30,
    
    November 30,
    
    February 28,
    
    February 28,Fiscal 2005
    
    2004
    
    2004
    
    2004
    
    2004
    
    2004
    
    2004
    
    2005
    
    2005Revenues
    
    $
    391,000
    
    
    $
    391,000
    
    
    $
    2,381,000
    
    
    $
    2,381,000
    
    
    $
    2,432,000
    
    
    $
    2,432,000
    
    
    $
    1,653,000
    
    
    $
    1,653,000Expenses
    
    
    1,263,000
    
    
    
    1,275,000
    (1)
    
    2,232,000
    
    
    
    2,670,000
    (1)(2)
    
    2,178,000
    
    
    2,521,000
    (1)(2)
    
    2,263,000
    
    
    
    2,764,000
    (1)(2)Net income
(loss)
    
    
    (875,000
    )
    
    
    (887,000
    )(1)
    
    134,000
    
    
    
    (304,000
    )(1)(2)
    
    240,000
    
    
    (103,000
    )(1)(2)
    
    (974,000
    )
    
    
    (1,123,000
    )(1)(2)Basic income
(loss)
per common share
    
    
    (0.05
    )
    
    
    (0.05
    )
    
    
    0.01
    
    
    
    (0.02
    )(1)(2)
    
    0.01
    
    
    0.00
    (1)(2)
    
    (0.04
    )
    
    
    (0.05
    )(1)(2)Diluted
income (loss) per common share
    
    
    (0.05
    )
    
    
    (0.05
    )
    
    
    0.01
    
    
    
    (0.02
    )(1)(2)
    
    
    0.01
    
    
    0.00
    (1)(2)
    
    (0.04
    )
    
    
    (0.05
    )(1)(2)
 (1)
    Restated to record additional amortization for exhibition
licenses acquired by the Company in April 2004.(2)
    Restated to record internally developed salvor-in-possession
rights as an expense when incurred.(3)
    Restated to adjust the deferred tax asset relating to the
companys realization of net operating loss carry forward for
the increased tax benefit.(4)
    On November 30, 2005, the Company sold a 3% ownership interest in the RMS Carpathia to Legal
Access Technologies, Inc. for $500,000. In addition, the Company sold it a twenty-five year
license to conduct joint expeditions with the Company to the Carpathia for the purpose of exploring
and salvaging the Carpathia for $200,000. Under the terms of this agreement, Legal Access
Technologies, Inc. was obligated to make payments
under a payment schedule of $100,000 on December 12, 2005 and the balance of $400,000 on
February 15, 2006. In the event of default, the Company had the option to terminate this
agreement. The Company reflected this transaction as a gain on the sale of the Carpathia interest
of $459,000 during the quarter ended November 30, 2005. Pursuant to the terms of the agreement,
Legal Access Technologies, Inc. was obligated to make the following scheduled payments to the
Company: (i) $100,000 on December 12, 2005; and (ii) $400,000 on February 15, 2006. The $100,000
payment was collateralized with 1,400,000 shares of Legal Access Technologies, Inc.s common stock,
which satisfied its obligation to make the first payment. Legal Access Technologies, Inc. failed
to make the second scheduled payment and, on April 3, 2006, the Company terminated its agreement
with the Legal Access Technologies, Inc. In accordance with the agreement, the Company retained
the collateral in the form of Legal Access Technologies, Inc.s common stock. As a result of this
default and the Companys subsequent termination of the agreement, the Company reversed the gain of
$459,000 net of the gain from the retention of the marketable securities of $168,000 that was
recognized during our quarter ended November 30, 2005.
 Note 14. Subsequent Events
    Plastination Company v. Premier Exhibitions, Inc.
   45




---



##### 



PREMIER EXHIBITIONS, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note
15. Restated Financial Statements
       As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  February 28, 2005Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    685,000
    
    
    
    622,000
    
    
    
    (63,000
    )Accumulated deficit
    
    
    (12,665,000
    )
    
    
    (13,607,000
    )
    
    
    (942,000
    )Consolidated Statements of Operations  for the year ended February 28, 2005Depreciation and amortization(1)
    
    
    378,000
    
    
    
    441,000
    
    
    
    63,000Expedition costs(2)
    
    
    
    
    
    
    879,000
    
    
    
    879,000Net income
    
    
    (1,475,000
    )
    
    
    (2,417,000
    )
    
    
    (942,000
    )Basic income (loss) per common share
    
    
    (0.07
    )
    
    
    (0.12
    )
    
    
    (0.05
    )Diluted income (loss) per common share
    
    
    (0.07
    )
    
    
    (0.12
    )
    
    
    (0.05
    )Consolidated Statements of Cash Flows  for the year ended February 28, 2005Depreciation and amortization(1)
    
    
    378,000
    
    
    
    441,000
    
    
    
    63,000Increase (decrease) in prepaid expenses and other current assets(1)
    
    
    (1,264,000
    )
    
    
    (1,031,000
    )
    
    
    233,000Purchase of
exhibition licenses(1)
    
    
    
    
    
    
    (233,000
    )
    
    
    (233,000
    )Investment in salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Net cash provided (used) by operating activities
    
    
    595,000
    
    
    
    (51,000
    )
    
    
    (646,000
    )Net cash provided (used) by financing activities
    
    
    (1,613,000
    )
    
    
    (967,000
    )
    
    
    646,000Consolidated Statements of Stockholders Equity and Comprehensive Loss  for the year ended February 28, 2005Net loss
    
    
    (1,475,000
    )
    
    
    (2,417,000
    )
    
    
    (942,000
    )
 
     As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Restated
    
    
    RestatementConsolidated Balance Sheet  February 28, 2006Salvor-in-possession rights(2)
    
    
    879,000
    
    
    
    
    
    
    
    (879,000
    )Exhibition licenses(1)
    
    
    3,607,000
    
    
    
    3,475,000
    
    
    
    (132,000
    )Deferred income taxes(3)
    
    
    2,100,000
    
    
    
    2,504,000
    
    
    
    404,000Accumulated deficit
    
    
    (7,717,000
    )
    
    
    (8,324,000
    )
    
    
    (607,000
    )Consolidated Statements of Operations  for the year ended February 28, 2006Depreciation and amortization(1)
    
    
    911,000
    
    
    
    980,000
    
    
    
    69,000Provision (benefit) for income taxes(3)
    
    
    (2,100,000
    )
    
    
    (2,504,000
    )
    
    
    (404,000
    )Net income
    
    
    4,948,000
    
    
    
    5,283,000
    
    
    
    335,000Basic income (loss) per common share
    
    
    0.21
    
    
    
    0.22
    
    
    
    0.01Diluted income (loss) per common share
    
    
    0.18
    
    
    
    0.19
    
    
    
    0.01Consolidated Statements of Cash Flows  for the year ended February 28, 2006Depreciation and amortization(1)
    
    
    911,000
    
    
    
    980,000
    
    
    
    69,000Increase (decrease) in deferred income taxes(3)
    
    
    (2,100,000
    )
    
    
    (2,504,000
    )
    
    
    (404,000
    )Consolidated Statements of Stockholders Equity and Comprehensive Income (loss)  for the year ended February 28, 2006Net Income
    
    
    4,948,000
    
    
    
    5,283,000
    
    
    
    335,000
 
    46
      PART IV
  ITEM 15.
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES  (a) Financial Statements.
  Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets at February 29, 2005 and
    February 28, 2006 (Restated)Consolidated Statements of Operations for the years ended
    February 28(29), 2004, 2005 (Restated) and 2006 (Restated)Consolidated Statements of Stockholders Equity for the
    years ended February 28(29), 2004, 2005 (Restated) and 2006 (Restated)Consolidated Statements of Cash Flows for the years ended
    February 28(29), 2004 (Restated) , 2005 (Restated) and 2006 (Restated)Notes to Consolidated Financial Statements 47      SIGNATURES
   Premier Exhibitions, Inc. By: /s/ Arnie GellerArnie
    Geller,
    President and Chief Executive Officer
    
    October 2, 2006  /s/ Arnie GellerArnie
    Geller, President,
    Chief Executive Officer,
    Chairman of the Board
    (Principal Executive Officer)
    
    October 2, 2006/s/ Stephen CoutureStephen
    Couture, Vice President and
    Chief Financial Officer, Director
    (Principal Financial Officer and
    Principal Accounting Officer)
    
    October 2, 2006/s/ N. Nick CretanN.
    Nick Cretan, Director
    
    October 2, 2006/s/ Doug BankerDoug
    Banker, Director
    
    October 2, 2006/s/ Alan ReedAlan
    Reed, Director
    
    October 2, 2006 48