<PAGE> 1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Southeast Interactive Technology Fund I, LLC
We have examined the investment accounts shown by the books and records of
Southeast Interactive Technology Fund I, LLC (the Fund) for the period from the
date of our last similar examination on December 31, 1996 to October 3, 1997.
Our examination was made without prior notice to the Fund. It is understood that
this report is solely for the use of management and the Securities and Exchange
Commission and should not be used for any other purpose.
Securities owned as of the close of business on October 3, 1997, shown by the
books and records audited by us, which we counted and inspected, were located in
the vault of First Union National Bank of New York, Security Services, 40 Broad
Street, 5th Floor, Suite 550, New York, New York 10004, except for securities
listed below.
With respect to the securities listed below, we were unable to physically
identify the securities on October 3, 1997, however, these securities are
indicated in the books and records of the Company as being owned on October 3,
1997. We confirmed the respective transaction(s) with the issuer or issuer's
legal counsel, as indicated below, and inspected a copy of the related
documents. Per our confirmations with the respective issuers listed below, the
Fund is reflected as the owner in the books and records of the respective
issuers on October 3, 1997.
<PAGE> 2
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
Alternate Realities Corporation $220,000 10% convertible debenture
due 2/18/98
Alternate Realities Corporation Warrants to purchase 107,144 shares of
Common Stock at $1.05 per share
Alternate Realities Corporation Warrant to purchase 95,240 shares of
Common Stock at $2.10 per share
One Room Systems, Inc. $660,000 10% convertible debenture
due 2/28/98
One Room Systems, Inc. Warrant to purchase 120,000 shares of
Common Stock at $1.00 per share
BuildNet, Inc. Warrant to purchase 1,029 shares of Preferred
Stock at $17.49 per share
Sun Forest Systems, Inc. Warrant to purchase 743 shares of Preferred
Stock at $17.49 per share
Wave Systems Corporation Warrant to purchase shares of Common Stock
determined by $170,000 divided by
conversion price.
</TABLE>
Confirmations for the securities listed below were sent to issuer's legal
counsel as a result of the issuer filing bankruptcy. Issuer's legal counsel was
unable to confirm the existence of these securities as of October 3, 1997.
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
NetTech, Inc. $200,000 10% convertible debentures
due 8/1/97
NetTech, Inc. $35,000 promissory note plus $4,000 in
interest due 10/31/97
NetTech, Inc. Warrant to purchase 25,000 shares of Common
Stock at $2.00 per share
NetTech, Inc. Warrant to purchase 8,250 shares of Preferred
Stock at $2.00 per share
</TABLE>
Because the above procedures do not constitute an audit in accordance with
generally accepted auditing standards, we do not express an opinion on the
investment accounts referred to above. In connection with the procedures
referred to above, no matters came to our attention that caused us to believe
that the specified accounts should be adjusted. Had we performed additional
procedures or had we audited the financial statements in accordance with
generally accepted auditing standards, matters might have come to our attention
that would have been reported to you. This report relates only to the
investments specified above and does not extend to any financial statements of
Southeast Interactive Technology Fund I, LLC, taken as a whole.
PRICE WATERHOUSE LLP
Raleigh, North Carolina
February 2, 1998
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Southeast Interactive Technology Fund I, LLC
We have examined the investment accounts shown by the books and records of
Southeast Interactive Technology Fund I, LLC (the Fund) for the period from the
date of our last similar examination on October 3, 1997 to October 31, 1997. Our
examination was made without prior notice to the Fund. It is understood that
this report is solely for the use of management and the Securities and Exchange
Commission and should not be used for any other purpose.
Securities owned as of the close of business on October 31, 1997, shown by the
books and records audited by us, which we counted and inspected, were located in
the vault of First Union National Bank of New York, Security Services, 40 Broad
Street, 5th Floor, Suite 550, New York, New York 10004, except for securities
listed below.
With respect to the securities listed below, we were unable to physically
identify the securities on October 31, 1997, however, these securities are
indicated in the books and records of the Company as being owned on October 31,
1997. We confirmed the respective transaction(s) with the issuer or issuer's
trustee, as indicated below, and inspected a copy of the related documents. Per
our confirmations with the respective issuers and trustee listed below, the Fund
is reflected as the owner in the books and records of the respective issuers on
October 31, 1997.
<PAGE> 4
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
Alternate Realities Corporation $220,000 10% convertible debenture
due 2/18/98
Alternate Realities Corporation Warrants to purchase 107,144 shares
of Common Stock at $1.05 per share
Alternate Realities Corporation Warrant to purchase 95,240 shares
of Common Stock at $2.10 per share
One Room Systems, Inc. $660,000 10% convertible debenture
due 2/28/98
One Room Systems, Inc. Warrant to purchase 120,000 shares
of Common Stock at $1.00 per share
BuildNet, Inc. Warrant to purchase 1,144 shares of Preferred
Stock at $17.49 per share
Sun Forest Systems, Inc. Warrant to purchase 743 shares of Preferred
Stock at $17.49 per share
Wave Systems Corporation Warrant to purchase shares of Common Stock
determined by $170,000 divided by
conversion price
</TABLE>
Confirmations for the securities listed below were sent to issuer's trustee as a
result of the issuer filing bankruptcy. Issuer's trustee was unable to confirm
the existence of these securities as of October 31, 1997.
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
NetTech, Inc. $200,000 10% convertible debentures
due 8/1/97
NetTech, Inc. $35,000 promissory note plus $4,000 in
interest due 10/31/97
NetTech, Inc. Warrant to purchase 25,000 shares of
Common Stock at $2.00 per share
NetTech, Inc. Warrant to purchase 8,250 shares of Preferred
Stock at $2.00 per share
</TABLE>
Because the above procedures do not constitute an audit in accordance with
generally accepted auditing standards, we do not express an opinion on the
investment accounts referred to above. In connection with the procedures
referred to above, no matters came to our attention that caused us to believe
that the specified accounts should be adjusted. Had we performed additional
procedures or had we audited the financial statements in accordance with
generally accepted auditing standards, matters might have come to our attention
that would have been reported to you. This report relates only to the
investments specified above and does not extend to any financial statements of
Southeast Interactive Technology Fund I, LLC, taken as a whole.
PRICE WATERHOUSE LLP
Raleigh, North Carolina
February 2, 1998
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Southeast Interactive Technology Fund I, LLC
We have examined the investment accounts shown by the books and records of
Southeast Interactive Technology Fund I, LLC (the Fund) for the period from the
date of our last similar examination on October 31, 1997 to December 31, 1997.
It is understood that this report is solely for the use of management and the
Securities and Exchange Commission and should not be used for any other purpose.
Securities owned as of the close of business on December 31, 1997, shown by the
books and records audited by us, which we counted and inspected, were located in
the vault of First Union National Bank of New York, Security Services, 40 Broad
Street, 5th Floor, Suite 550, New York, New York 10004, except for securities
listed below.
With respect to the securities listed below, we were unable to physically
identify the securities on December 31, 1997, however, these securities are
indicated in the books and records of the Company as being owned on December 31,
1997. We confirmed the respective transaction(s) with the issuer or issuer's
trustee, as indicated below, and inspected a copy of the related documents. Per
our confirmations with the respective issuers and trustee listed below, the Fund
is reflected as the owner in the books and records of the respective issuers on
December 31, 1997.
<PAGE> 6
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
Alternate Realities Corporation $220,000 10% convertible debenture
due 2/18/98
Alternate Realities Corporation Warrants to purchase 107,144 shares
of Common Stock at $1.05 per share
Alternate Realities Corporation Warrant to purchase 95,240 shares
of Common Stock at $2.10 per share
One Room Systems, Inc. $660,000 10% convertible debenture
due 2/28/98
One Room Systems, Inc. Warrant to purchase 120,000 shares
of Common Stock at $1.00 per share
BuildNet, Inc. Warrant to purchase 1,372 shares of
Preferred Stock at $17.49 per share
Sun Forest Systems, Inc. Warrant to purchase 743 shares of Preferred
Stock at $17.49 per share
Wave Systems Corporation Warrant to purchase shares of Common
Stock determined by $170,000 divided
by conversion price
</TABLE>
Confirmations for the securities listed below were sent to issuer's trustee as a
result of the issuer filing bankruptcy. Issuer's trustee was unable to confirm
the existence of these securities as of December 31, 1997.
<TABLE>
<CAPTION>
Issuer Description
- -------------------------------------------------------------------------------------------------
<S> <C>
NetTech, Inc. $200,000 10% convertible debentures
due 8/1/97
NetTech, Inc. $35,000 promissory note plus $4,000
in interest due 10/31/97
NetTech, Inc. Warrant to purchase 25,000 shares
of Common Stock at $2.00 per share
NetTech, Inc. Warrant to purchase 8,250 shares of Preferred
Stock at $2.00 per share
</TABLE>
Because the above procedures do not constitute an audit in accordance with
generally accepted auditing standards, we do not express an opinion on the
investment accounts referred to above. In connection with the procedures
referred to above, no matters came to our attention that caused us to believe
that the specified accounts should be adjusted. Had we performed additional
procedures or had we audited the financial statements in accordance with
generally accepted auditing standards, matters might have come to our attention
that would have been reported to you. This report relates only to the
investments specified above and does not extend to any financial statements of
Southeast Interactive Technology Fund I, LLC, taken as a whole.
PRICE WATERHOUSE LLP
Raleigh, North Carolina
February 2, 1998
