We are in the business of developing and touring museum quality exhibitions. We generate income from our exhibitions primarily through ticket sales, third-party licensing, sponsorships and merchandise sales.
We first became known for our Titanic exhibitions, which we conduct through our wholly-owned subsidiary R.M.S. Titanic, Inc., and which honor the ill-fated ocean liner. The Titanic has captivated the imaginations of millions of people throughout the world since 1912 when she struck an iceberg and sank in the North Atlantic on her maiden voyage. More than 1,500 of the 2,228 lives on board the Titanic were lost.
Since 1994, we have maintained our Salvor-in-Possession status of the Titanic wreck and wreck site as awarded by a federal district court. As such, we have the exclusive right to recover objects from the Titanic wreck site. Through our explorations, we have obtained and are in possession of the largest collection of data, information, images and cultural materials associated with the Titanic shipwreck. We believe that our Salvor-in-Possession status puts us in the best position to provide for the archaeological survey, scientific interpretation, public awareness, historical conservation and stewardship of the Titanic shipwreck.
In August 2008, we entered into an agreement with Georgia Aquarium to present “Titanic: Aquatic.” At this time, we also partnered with Country Financial to become our exclusive presenting sponsor for “Titanic: Treasures from the Deep.”
We currently have the ability to operate eight concurrent Titanic exhibitions, six of which are known as “Titanic: The Artifact Exhibition,” one of which is known as “Titanic Aquatic” and one known as “Titanic: Treasures from the Deep.” We intend to continue presenting Titanic exhibitions throughout the world in an enlightening and dignified manner that embodies respect for all of those who sailed with her.
In 2004, we diversified our exhibitions beyond the Titanic and into human anatomy. We currently have the ability to present sixteen concurrent human anatomy exhibitions, which are known as “Bodies...The Exhibition,” “Bodies Revealed” and “Our Body: The Universe Within.”
In February and March 2008, we further diversified the scope of our exhibition offerings to include both exhibitions of sports memorabilia entitled “Sports Immortals, The Traveling Exhibition” and exhibitions exploring a world without sight entitled “Dialog in the Dark.” We acquired the rights to offer these exhibitions pursuant to long-term licensing arrangements. As of our fiscal year ended February 28, 2009 (“fiscal 2009”), we had not presented “Sports Immortals, The Traveling Exhibition” in any venue. To date, our plans to develop a Sports Immortals exhibition have been put on hold (see Note 9 to our Consolidated Financial Statements in Item 8 of Part II of this report). The first “Dialog in the Dark” exhibition opened in Atlanta, Georgia in August 2008, and the second opened in Kansas City, Missouri in November 2008.
In June 2008, we opened a new exhibition entitled, “Star Trek, The Exhibition” in San Diego, California followed by exhibits in Phoenix, Arizona and Detroit, Michigan in November 2008 and February 2009, respectively. A fourth exhibition is scheduled to open in Philadelphia, Pennsylvania during the first quarter of fiscal 2010. This multi-city touring exhibition contains the world’s most comprehensive collection of authentic Star Trek ships, set re-creations, costumes and props from five television series and ten films over the last forty-plus years.
We operate all of our exhibitions through wholly-owned subsidiaries. We adopted this holding company structure in October 2004. Prior to that, we conducted all of our business activities exclusively through R.M.S. Titanic, Inc., our subsidiary which is the Salvor-In-Possession of the wreck of the Titanic and which operates our Titanic exhibitions. R.M.S. Titanic, Inc. was incorporated in 1993. We intend to continue to expand the number and types of exhibitions we offer and will organize additional subsidiaries as needed.
Our principal executive offices are located at 3340 Peachtree Road, NE, Suite 2250, Atlanta, Georgia 30326 and our telephone number is (404) 842-2600. We are a Florida corporation and maintain web sites located at www.prxi.com, www.rmstitanic.net, www.titanicscience.com, www.bodiestheexhibition.com, www.bodiestickets.com, www.titanictix.com, and www.bodiesrevealed.com.
On May 20, 2008, we advanced $250,000 to other licensor(s) for the right to present and promote other exhibitions. We are currently working on researching, developing and producing new exhibitions associated with this license.
We intend to acquire, develop and present additional new exhibitions for presentation in the future, including exhibitions both related and unrelated to our currently ongoing and recently announced exhibitions.
Lease Agreement with the Luxor Hotel and Casino
On March 12, 2008, we entered into a lease with Ramparts, Inc., the owner and operator of the Luxor Hotel and Casino (the “Luxor”) in Las Vegas, Nevada. Pursuant to the lease, we leased approximately 36,141 square feet of space within the Luxor. The lease has an initial term of ten years commencing upon the completion of the design and construction work related to the opening of the Company’s “Bodies…The Exhibition” exhibition. The term of the lease is renewable for up to two additional five year periods and provides that we pay $3,400,000 in minimum annual rent for the first three years of the lease. Thereafter, the minimum annual rent shall be $3,600,000. We will also pay the Luxor a percentage of our gross sales from our operations in the leased space. The Bodies exhibit opened in August 2008 and the Titanic exhibit opened in December 2008.
We believe that the Luxor, which is one of the most recognizable resorts on the Las Vegas strip, will provide us with tremendous exposure to a substantial market of corporate and individual patrons.
On September 20, 2006, we entered into an agreement with Sam Tour (USA), Inc., JAM Exhibitions, LLC and Concert Productions International, which we refer to collectively as “JAM,” to jointly present several of our human anatomy exhibitions. Pursuant to the agreement, we agreed to present at least nine human anatomy exhibitions jointly with JAM in the following locations: Tampa, New York, Atlanta, Mexico City, Seattle, Las Vegas, Amsterdam, Washington, D.C. and San Diego. The exhibitions in Tampa, Atlanta, Mexico City, Seattle, Amsterdam, San Diego and Washington, D.C. have completed their runs and have closed. With respect to the exhibition in Las Vegas, our agreement with JAM only lasted through the exhibition being presented at the Tropicana Hotel and Casino, which has completed its run and has closed, and does not involve our lease at the Luxor. Our agreement with JAM does not include certain of our human anatomy exhibitions which we are presenting independently or under separate license agreements. The agreement provides that JAM will not compete directly or indirectly with us in the presentation of human anatomy exhibitions for the one-year period following the closing of the last jointly-presented exhibition.
On November 28, 2007, we entered into an exclusive right, license and opportunity agreement (the “Original Agreement”) with Live Nation, Inc. (“Live Nation”) under which we would co-present twelve human anatomy exhibitions with Live Nation in twelve geographic territories anywhere in the world, except for North America, China and certain other limited geographic locations (the “Exclusive Territory”). With respect to each jointly presented exhibition, we are responsible for exhibition design, installation and licensing, including the provision of expertise, exhibitry and specimens and Live Nation is responsible for marketing, public relations and exhibition operations and security. In consideration, we received an initial $6,000,000 payment from Live Nation. Also, we agreed to split the revenues from the exhibitions with Live Nation after reimbursement of recoupable expenses. Additionally, pursuant to the Original Agreement, we and Live Nation each had a unilateral right to exercise two additional options to grant Live Nation the exclusive right to present twelve additional human anatomy exhibitions within the Exclusive Territory. Under the Original Agreement, upon the exercise of each such option, we would receive a payment from Live Nation of $6,000,000. The consideration from Live Nation of the initial $6,000,000 was included in revenue for the three and nine month periods ended November 30, 2007.