4. Assets Related to 2010 Expedition to Titanic Wreck Site

During August and September 2010, our wholly owned subsidiary RMST, as salvor-in-possession of the RMS Titanic (the “Titanic”) and its wreck site, conducted an expedition to the Titanic wreck site.

We have capitalized $4.5 million of costs related to the expedition, discussed in more detail below, which have been allocated to specific assets as reflected in the following table (in thousands).


	November 30, 2011		Februrary 28, 2011
3D film	$	1,817	$	1,719
3D exhibitry		857		759
2D documentary		631		565
Gaming application		886		886
Expedition web point of presence		317		317

Total expedition costs capitalized		4,508		4,246
Less: Accumulated amortization		175		175
Accumulated depreciation		132		53

Expedition costs capitalized, net	$	4,201	$	4,018

Costs associated with the expedition web point of presence are depreciated on a straight-line basis, using a three year useful life. Depreciation expense related to the web point of presence totaled $26 thousand and $79 thousand for the three and nine months ended November 30, 2011, respectively, and $53 thousand during fiscal 2011.

The Company recorded an amortization charge of $175 thousand for the 2D documentary in the fourth quarter of fiscal 2011, as calculated over a five year life, based on the methodology outlined in Accounting Standards Codification (“ASC”) 926 “Entertainment — Films”, (“ASC 926”). No amortization was recorded for the three or nine months ended November 30, 2011, as the Company did not receive any 2D film revenue during these periods.

As of November 30, 2011 the 3D film, 3D exhibitry and gaming application assets have not been placed in service, and therefore, no associated amortization or depreciation has been recorded for these assets.

Subsequent to the quarter ended November 30, 2011, the Company licensed the 3D footage from the expedition to produce a 3D television documentary for worldwide distribution and DVD/home video exploitation in exchange for a license fee and a participation in net revenues (after deducting distribution fees and certain other expenses). We have also recently licensed other imagery from the expedition to a major magazine and publishing concern in exchange for license fees and promotional exposure that management believes will significantly benefit the Company.

In addition, during the fourth quarter of fiscal 2012, we are supplementing certain of our Titanic exhibitions with 3D exhibitry generated from the expedition, and as such, will begin depreciation of these assets based on their in service dates.

The web point of presence and 3D exhibitry assets are included in Property and equipment on the Condensed Consolidated Balance Sheets. The 3D film, 2D documentary, and gaming assets are included in Film and gaming assets on the Condensed Consolidated Balance Sheets.