The audit reports of KPMG on the financial statements of Waterside as of and for the fiscal years ended June 30, 2002 and 2001 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

Waterside provided KPMG with a copy of the foregoing disclosures. Attached hereto as Exhibit 16.1 is a copy of KPMG’s letter, dated May 12, 2003, stating its agreement with such statements.

During Waterside’s two most recent fiscal years and through the date of this Form 8-K, Waterside did not consult with Witt Mares with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on Waterside’s financial statements, or any other matters or reportable events listed in Item 304(a)(2)(i) and (ii) of Regulation S-K.

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Item 7.    Financial Statements and Exhibits.

(c)    Exhibits

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SIGNATURE

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 hereunto duly authorized.

WATERSIDE CAPITAL CORPORATION

Date: May 13, 2003

By    /s/    J. ALAN LINDAUER            

        J. Alan Lindauer, President

        and Chief Executive Officer

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EXHIBIT INDEX

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