FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998
2-96366-A
(Commission File Number)
TREASURES & EXHIBITS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
Florida 59-2483405
(State of other jurisdiction(IRS Employer
of incorporation or organization) Identification No.)
2300 Glades Road, Suite 450, West Tower, Boca Raton, FL 33431
(Address of Principal Executive Offices)
(561) 750-7535
(Registrant's Telephone Number, including area code)
(Former name, former address and former fiscal years,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports 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
There were 25,990,756 shares of Common Stock, $.0001 par value,
issued and outstanding at June 1, 1998.
<PAGE>
TREASURES & EXHIBITS INTERNATIONAL, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1998 (Unaudited) and
December 31, 1997.
Statement of Operations - Three months ended March
31, 1998 and 1997 (Unaudited).
Statement of Shareholders' Equity - December 31,
1994 through March 31, 1998.
Statement of Cash Flows - Three months ended March
31, 1998 and 1997 (Unaudited).
Notes to Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
TREASURES & EXHIBITS INTERNATIONAL, INC.
PART I - FINANCIAL INFORMATION
Item I. Financial Statements
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 35,512 $ 179,795
Investment in marketable
trading securities - at market 14,961 16,143
TOTAL CURRENT ASSETS 50,473 195,938
INVESTMENT IN ARTIFACTS 2,432,500 -
$2,482,973 $ 195,938
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31,*
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 23,103 $ 2,083
Accounts payable and accrued
expenses 25,000 15,000
Due to Affiliates 682,500 -
TOTAL CURRENT LIABILITIES 730,603 17,083
PUT OPTION 1,615,000 -
SHAREHOLDERS' EQUITY:
Common stock $.0001 par value;
authorized 50,000,000 shares;
issued and outstanding
25,990,756 shares in 1998 and
16,490,756 shares in 1997 2,599 1,649
Additional paid-in capital 1,136,413 1,137,363
Accumulated deficit (1,001,642) (960,157)
TOTAL SHAREHOLDERS' EQUITY 137,370 178,855
$2,482,973 $ 195,938
</TABLE>
* Reclassified for comparative purposes
See accompanying notes to financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES:
Interest and dividend income $ 811 $ 7,913
Realized and unrealized
gain (loss) on invest-
ment in marketable
trading securities (1,182) 632
Direct finance lease income - 241
(371) 8,786
OPERATING EXPENSES:
General and
administrative expenses 41,114 12,181
INCOME (LOSS) FROM OPERATIONS (41,485) (3,395)
OTHER INCOME (EXPENSES):
Equity in earnings (loss)
of unconsolidated subsidiary - (12,897)
INCOME (LOSS) BEFORE INCOME TAXES (41,485) (16,292)
PROVISION FOR INCOME TAXES - 7,078
NET INCOME (LOSS) $ (41,485) $ (23,370)
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 17,862,978 16,398,356
NET INCOME PER COMMON SHARE $ - $ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
STATEMENT OF SHAREHOLDERS' EQUITY
FROM DECEMBER 31, 1994 THROUGH MARCH 31, 1998
<TABLE>
<CAPTION>
Common Stock
$.0001 Par Value Additional Retained
Authorized 50,000,000 Shares Paid-In Earnings Treasury
Shares Amount Capital (Deficit) Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1994 14,429,750 $ 1,499 $ 970,557 $ (10,719) $(36,239) $ 925,098
Purchase of Treasury Stock (826,900) - - - (71,477) (71,477)
Sale of Treasury Stock 333,000 - - - 24,981 24,981
Net income for the period - - - 1,498 - 1,498
Balance - December 31, 1995 13,935,850 1,499 970,557 (9,221) (82,735) 880,100
10% Stock Dividend 1,499,156 150 166,806 (166,956) - -
Purchase of Treasury Stock (249,100) - - - (33,070) (33,070)
Sale of Treasury Stock 1,212,450 - - - 105,773 105,773
Net income for the period - - - 59,443 - 59,443
Balance - December 31, 1996 16,398,356 1,649 1,137,363 (116,734) (10,032) 1,012,246
Sale of treasury stock 92,400 - - - 10,032 10,032
Dividend distribution - - - (864,263) - (864,263)
Net income for the period - - - 20,840 - 20,840
Balance - December 31, 1997 16,490,756 1,649 1,137,363 (960,157) - 178,855
Net loss for the period - - - (41,485) - (41,485)
Issuance of stock 9,500,000 950 1,614,050 - - 1,614,050
Reclassification of put option - - (1,615,000) - - (1,615,000)
Balance - March 31, 1997 25,990,756 $ 2,599 $ 1,136,413 $(1,001,642) $ - $ 137,370
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Three Months Ended
March 31,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (41,485) $ (23,370)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
(Gain) loss on sale of
marketable securities - (30,352)
Equity in (earnings) or loss
of unconsolidated subsidiary - 12,897
Allowance for market decline
of securities 1,182 29,720
Changes in operating assets and liabilities:
Increase (Decrease) in accounts
payable and accrued expenses 21,020 (38,359)
Decrease in accrued interest receivable - 143
(Increase) decrease in
accounts receivable - 2,493
Increase in income taxes payable - 3,128
Proceeds from sale of marketable
trading securities - 61,918
Purchase of marketable trading
securities - (53,324)
Net cash provided by (used in)
operating activities (19,283) (35,106)
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan advance to affiliates 125,000 -
Principal collections of loans
to affiliates - 3,085
Advance paid on notes receivable
- other - (2,000)
Principal collections of notes
receivable - other - 5,004
Principal collections of direct
financing leases - 838
Investment in unconsolidated
subsidiaries - (11,103)
Net cash provided by
(used in) investing activities (125,000) (4,176)
</TABLE>
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Three Months Ended
March 31,
1998 1997
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ (144,283) $ (39,282)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 179,795 250,209
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 35,512 $ 210,927
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents - For purposes of the balance
sheet and statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Income Taxes - Deferred income taxes reflect the tax
consequences on future years of differences between the
tax basis of assets and liabilities and their financial
reporting amounts. Future tax benefits, such as net
operating loss carryforwards, are recognized to the
extent that realization of such benefits are more likely
than not.
Account Estimates - The preparation of financial
statements in conformity with generally accepted
accounting principles require management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statement and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from these estimates.
NOTE 2 - FAIR PRESENTATION
The balance sheet as of March 31, 1998, the statement of
operations for the three months ended March 31, 1998 and
1997, the statement of shareholders' equity as of March
31, 1998, and the statement of cash flows for the three
months ended March 31, 1998 and 1997, have been prepared
by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly
the financial position and results of operations at March
31, 1998 and for all period presented have been made.
The operations for the three months ended March 31, 1998
are not necessarily indicative of the results of
operations to be expected for the Company's fiscal year.
The condensed financial statements as of December 31,
1997, 1996 and 1995 have been derived from audited
financial statements.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 2 - FAIR PRESENTATION (Cont'd)
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction
with the consolidated financial statements and notes
thereto as of December 31, 1997 and for the year then
ended.
NOTE 3 - BASIS OF PRESENTATION
The March 31, 1997 statement of operations includes the
accounts of Vanderbilt Square Corp. and its wholly-owned
subsidiary, Hi-Tech Leasing, Inc.. All significant
intercompany accounts and transaction have been
eliminated in such financial statements.
NOTE 4 - NAME CHANGE
On February 27, 1998, the Company changed its name to
Treasure & Exhibits International, Inc.
NOTE 5 - EARNINGS (LOSS) PER SHARE
Per share information was computed using the weighted
average number of common shares outstanding during the
reporting periods. Per share information computed to be
less than one cent is not shown on the accompanying
financial statements.
The Company's adoption of FASB - 128, earnings per share,
did not have a material impact upon reported per share
amounts.
NOTE 6 - INVESTMENT IN MARKETABLE TRADING SECURITIES
Marketable trading securities are stated at market value
at the balance sheet date. The cost of these investments
is $40,180 at March 31, 1998 and December 31, 1997,
respectively. Unrealized gains and losses resulting from
fluctuations in the market price of the related
securities are currently reflected in the statement of
operations under the caption "Realized and unrealized
gain (loss) in marketable trading securities".
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 7 - INVESTMENT IN ARTIFACTS
On March 19, 1998, the Company exercised its option to
purchase artifacts known as the "Dry Tortugas Treasure".
The "treasure" is comprised of a collection of seventeenth
century artifacts which were recovered from a sunken
Spanish galleon in an area known as The Dry Tortugas.
Consideration named in the purchase agreement amounted to
$2,432,500 comprised of $617,500 cash, a $200,000
promissory note, and 9,500,000 shares of the Company's
restricted Common Stock valued by the Buyer and Seller at
$1,615,000.
The Company retained the right to repurchase up to
8,000,000 shares of the restricted Common Stock at prices
ranging from $.135 to $.15 per share.
The Company granted the artifacts seller a one year right
to put all or any of the 9,500,000 shares of restricted
common stock to the Company at per share prices ranging
from $.085 to $.17 per share. The Company's repurchase
price of $.085 per share is dependent upon the successful
registration of the shares used in the transaction. The
put option is reflected as a liability in the
accompanying balance sheet.
The artifact purchase agreement also provides the Sellers
with the right to receive additional Common Stock. If
the average market bid price of the Company's Common
Stock is less than $.12 per share during the first five
market days following March 19, 1998, the Company shall
issue additional restricted Common Stock to the Sellers
in proportion to their original holdings to cause the
Seller to have the equivalent per share valuation of $.17
for shares issued in connection with this transaction.
NOTE 8 - NOTES PAYABLE
Notes payable consist of the following:
18% Promissory Note - interest payments
commencing April 19, 1998. Maturing
on March 19, 1999. This note is owed
to an affiliated company. $482,500
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 8 - NOTES PAYABLE (Cont'd)
Secured Promissory Note - Due August 1, 1998.
Collateralized by certain Dry Tortugas
Artifacts valued at $250,000. This note is
Owed to the Seller of the artifacts 200,000
$682,500
NOTE 9 - SUPPLEMENTAL CASH FLOW INFORMATION
(a) Payments made directly to the Seller of the Dry
Tortugas artifacts by affiliates amounted to $617,500.
(b) Advances to affiliates amounting to $125,000 were
considered to be repaid to the Company through a like
amount of direct payments to the Dry Tortugas artifacts
Seller as indicated in item (a) above.
(c) Common Stock (and put option) issued in connection
with artifact asset acquisition amounted to $1,615,000.
NOTE 10 - PROPOSED ACQUISITION
On September 10, 1997, the Company entered into a Letter
of Intent to acquire all of the outstanding capital stock
of Michael's International Treasure Jewelry, Inc.
("Michael's"), a privately-held corporation. The entity
is affiliated to the Company by virtue of common
principal shareholders. "Michael's" operates retail
jewelry stores in Miami and Key West. The stores
specialize in the sale of jewelry designed with coins of
antiquity.
Terms of this Letter of Intent specify a purchase price
of $3,500,000 consisting of $350,000 cash and $3,150,000
of the Company's authorized, but previously unissued,
restricted common stock. A total of 8,200,989 shares are
anticipated to be issued in connection with the
acquisition. "Michael's" will become a wholly-owned
subsidiary of the Company in a transaction which is
expected to be recorded as a reverse acquisition for
accounting and financial statement reporting purposes.
At March 31, 1998, the Company is continuing its due
diligence efforts with respect to the proposed
acquisition.
<PAGE>
TREASURE & EXHIBITS INTERNATIONAL, INC.
(Formerly Vanderbilt Square Corporation)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
NOTE 11 - RELATED PARTY TRANSACTIONS
Consulting Agreement - The Company paid $15,000 to an
affiliate in accordance with a (modified) consulting
agreement during the three months ended March 31, 1998.
A modification reducing consulting fee expense from
$120,000 per annum to $60,000 per annum was effective
January 1, 1998.
Interest Expense - Interest expense incurred in
connection with borrowing from affiliates amounts to
$2,855 for the three months ended March 31, 1998.
NOTE 12 - INCOME TAXES
A deferred tax benefit relating to the Company's net
operating loss carryforward ($44,754) and allowance for
market decline of investments ($24,037) is offset by a
valuation allowance since future realization of such
benefit cannot be assured from profitable operations.
The net operating loss expires in the year 2112.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be reviewed in
conjunction with the accompanying financial statements, including
the notes thereto.
Financial Condition
At March 31, 1998, the Company had current assets of $50,473,
compared to $195,938 at December 31, 1997; total assets of
$2,482,973 as compared to $195,938 at December 31, 1997; current
liabilities of $730,603 as compared to $17,083 at December 31,
1997, and a current net worth of $137,370 as compared to $178,855
at December 31, 1997. (See "Financial Statements"). The increase
in total assets and net worth are principally due to the Company's
disposal of its investments in subsidiaries Hi-Tech Leasing, Inc.
and Professional Programmers, Inc. and the August 26, 1997
distribution of its investment in Corrections Services Inc. to the
Company's shareholders. See Financial Statements Note 7.
Liquidity
During the three months ended March 31, 1998, the Company had a
decrease in cash and cash equivalents of $(144,283). The decrease
was principally attributed to the Company's use of its cash in
investing activities, primarily a loan advance to affiliates.
At March 31, 1998 the Company had limited liabilities and no
present commitments that were reasonably likely to result in its
liquidity increasing or decreasing in any material way. During
this reporting period the Company determined to pursue exercise of
the lease purchase option contained in an artifacts and display
items lease of treasure artifacts from a joint venture between
Seahawk Deep Ocean Technology, Inc. and a Seahawk affiliate in
Tampa, Florida. The Company and its intended acquisition,
Michael's International Treasure Jewelry, Inc., were co-lessees in
the Seahawk lease. The Company determined to seek to exercise the
lease purchase option to acquire the leased items itself prior to
the completion of its due diligence efforts in connection with its
intended acquisition of Michael's International Treasure Jewelry,
Inc. ("Michael's"). On March 19, 1998, the Company closed its
purchase of the artifacts with Michael's consent to the transaction
and without Michael's participation in exercise of the lease
purchase option.
Under the terms of the purchase agreement, lease payments in
the amount of $135,000 which had been previously paid were credited
to the cash portion of the agreed purchase price totaling $617,500.
The balance of the purchase price was paid with 9,500,000
additional shares of the Company's authorized but previously
unissued Common Stock and a secured promissory note due on August
1, 1998 in the original principal amount of $200,000. All of the
cash funds required to complete the transaction on March 19, 1998
($482,500), were borrowed by the Company from its affiliate, First
Capital Services, Inc., a closely held Florida corporation. First
Capital Services, Inc. is affiliated with the Company through
common management and control in that the Company's President and
Chief Executive Officer, Larry Schwartz, is also President and
Chief Executive Officer of First Capital Services, Inc.
<PAGE>
The debt incurred by the Company in the process of acquiring
the Seahawk treasure artifacts, exceeded the Company's total assets
at year-end 1997 by a factor approaching four (4). While the debt
to its affiliate, First Capital Services, Inc., is demand in nature
and requires no immediate and on-going debt service, the Company's
prospective ability to repay the debt with revenues from commercial
operations is largely dependent, at June 1, 1998, on its subsequent
ability to complete the intended acquisition of Michael's and to
deploy the artifacts acquired from Seahawk as inventory and
exhibits in a commercial manner which will generate revenues and
profits to the Company. There is no present assurance that the
Company will in fact be able to successfully complete those plans
due to the potential occurrence of one or more presently unforseen,
insurmountable obstacles to completion of that transaction. In the
event that it is unable to do so, the Company will be required to
modify its present plan to attempt in some other, presently
unforseen, way to otherwise commence commercial operations with a
view toward generating revenues or resale proceeds from the
treasure and display items it has acquired with substantial debt
and dilution to its shareholders.
Pursuant to additional terms of the exercised lease purchase
option with Seahawk, the Company has the right to repurchase
8,000,000 of the 9,500,000 shares issued as part of the
consideration in the transaction within a ninety (90) day period
ending on or about June 19, 1998. The Company (at June 1, 1998)
has no current ability to exercise its Common Stock repurchase
option with Seahawk and will likely be faced with the need for
additional, substantial borrowing from one or more affiliates in
order to exercise the repurchase option should it choose to do so
within the exercise period.
In general, at June 1, 1998, the Company's liquidity is
limited and will likely diminish in the near term in the absence
of current commercial operations and on-going general and
administrative expenses. The Registrant knows of no other trend,
additional demand, event or uncertainties that will result in, or
that are reasonably likely to result in, its liquidity increasing
or decreasing in any material way.
Capital Resources
The Company has no outstanding unused credit lines or credit
commitments in place. In order to close its exercise of the
Seahawk lease purchase option, the Company sought and secured
credit from an affiliate, First Capital Services, Inc., a closely-
held Florida corporation under common control with the Company
through its President and Chief Executive Officer. It is the
Company's intent at June 1, 1998, to continue to rely upon its
affiliate as needed for additional debt financing and to pursue
some form of equity financing in the near term, in a manner, and
under terms and conditions yet to be determined.
In the event that its current due diligence efforts with
regard to the acquisition of Michael's International Treasure
Jewelry, Inc. are successfully completed, the Company will require
further capital financing to complete that acquisition and to repay
or partially repay the debt to its affiliate, First Capital
Services, Inc. incurred in the Company's acquisition of the Seahawk
artifacts. In the interim, the Company will continue to lease the
artifacts and display items to Michael's pending completion of the
<PAGE>
intended acquisition. If the Company is ultimately unable to
secure additional debt financing or to raise capital from an equity
financing, it will be adversely affected in that it will likely be
unable to repay its current debt and subsequently, similarly, be
unable to complete the planned acquisition of Michael's. While the
Company currently anticipates completion of the Michael's
acquisition transaction, there is and can be no present assurance
that it will be able to do so.
Results of Operations
The Company had no revenues for the three months ended March
31, 1998 as compared to $8,786 for the quarter ended March 31,
1997. The principal reason for the decrease in revenues was a
significant decrease in interest and dividend income and losses on
investments in marketable trading securities.
Operating expenses increased to $41,114 for the quarter ended
March 31, 1998 as compared to $12,181 at March 31, 1997. The
difference between operating expenses at March 31, 1998 and March
31, 1997, was $28,933. The principal reason for the difference
between March 31, 1998 and 1997, is an increase in General and
Administrative Expenses. During the quarter ended March 31, 1998
the Company sustained a net loss of ($41,485) as compared to a net
loss of ($23,370) during the comparable quarter of 1997.
At March 31, 1998, the Company had no current commercial
operations. Having only recently completed acquisition of the
Seahawk treasure artifacts and exhibits items, through exercise of
the lease purchase option, using debt proceeds secured from its
affiliate, First Capital Services, Inc., the Company (at June 1,
1998), has begun commercial operations through its collection of
lease payments, albeit reduced to $14,000 per month since the lease
payments no longer contain a component reflecting a purchase
option, from Michael's for continued lease of the Seahawk artifacts
and display items otherwise under the same terms and conditions of
the Seahawk lease. The Company intends to continue this
arrangement with Michael's pending completion of its current due
diligence efforts toward developing, entering into and closing a
definitive acquisition agreement with Michael's. While there can
be no present assurance that the Company will not encounter an
insurmountable obstacle to successful completion of that
transaction, the Company believes that it will be able to do so
during the first half of 1998. Completion of that transaction, at
this point, however, is primarily dependent on the Company's
ability to raise additional debt or equity financing.
Once closed, if closed, the Company expects its acquisition
of Michael's to enable it to, and to continue to, buy unique
shipwreck artifacts and to carry out its ultimate plan to become
a leading retailer of quality treasure jewelry and artifacts. The
many uncertainties surrounding completion and implementation of
this plan however may preclude its successful implementation. In
that event, the Company will be adversely affected.
<PAGE>
PART II
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY- HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
The Registrant filed one (1) Current Report on Form 8-K
during this reporting period dated March 19, 1998 reporting
its acquisition of the artifacts from Seahawk on that date
for cash, note and restricted Common Stock. See Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
TREASURES & EXHIBITS
INTERNATIONAL, INC.
Date: June 8, 1998 BY:/s/Larry Schwartz
Larry Schwartz, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statement of Cash Flows and Notes thereto
incorporated in Part I, Item 1. of this Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 35,512
<SECURITIES> 14,961
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,432,500
<CURRENT-ASSETS> 2,482,973
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,482,973
<CURRENT-LIABILITIES> 730,603
<BONDS> 0
0
0
<COMMON> 2,599
<OTHER-SE> 134,771
<TOTAL-LIABILITY-AND-EQUITY> 2,482,972
<SALES> 0
<TOTAL-REVENUES> (371)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 41,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,485)
<INCOME-TAX> 0
<INCOME-CONTINUING> (41,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 21,020
<NET-INCOME> (41,485)
<EPS-PRIMARY> 0
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</TABLE>
