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<PAGE>
SIGNATURE
This report is signed on behalf of the Registrant.
City of: Solana Beach State of: California
Date: 8/21/98
Name of Registrant: BDI Investment Corporation
By: /s/Arthur Brody Witness: /s/Teresa Whorton
------------ --------------
Arthur Brody Teresa Whorton
President and Assistant Treasurer
Chief Executive Officer
<PAGE>
[LETTERHEAD-LAVINE, LOFGREN, MORRIS & ENGELBERG, LLP]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
BDI Investment Corporation
In planning and performing our audit of the financial statements and financial
highlights of BDI Investment Corporation for the year ended June 27, 1998, we
considered its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and financial highlights and
to comply with the requirements of Form N-SAR, not to provide assurance on the
internal control structure.
The management of BDI Investment Corporation is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of the inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standard established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements and financial
highlights being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. However,
we noted no matters involving the internal control structure, including
procedures for safeguarding securities, that we consider to be material
weaknesses, as defined above, as of June 27, 1998.
This report is intended solely for the information and use of management of BDI
Investment Corporation and the Securities and Exchange Commission.
/s/Lavine, Lofgren, Morris & Engelberg, LLP
- -------------------------------------------
Lavine, Lofgren, Morris & Engelberg, LLP
San Diego, California
July 29, 1998
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