<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

              [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934 
                 For the fiscal year ended September 30, 1996.

            [  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934 
                For the transition period from ______ to ______

                       Commission File Number:  0-26194

                            SEER TECHNOLOGIES, INC.
            (Exact name of registrant as specified in its charter)

        Delaware                                                 13-3556562   
(State of incorporation)                                      (I.R.S. Employer
                                                             Identification No.)

               8000 Regency Parkway, Cary, North Carolina  27511
         (Address of principal executive offices, including Zip Code)

                                (919) 380-5000
             (Registrant's telephone number, including area code)

                              -------------------

       Securities registered pursuant to Section 12(b) of the Act: NONE

         Securities registered pursuant to Section 12(g) of the Act:  
                         Common Stock, $.01 par value
                             
                              -------------------
                             
Indicate by check mark whether the registrant (1) has filed all reports required
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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Aggregate market value of the voting stock held by non-affiliates of the
Registrant as of December 12, 1996 was approximately $21,316,926.00. There were
11,635,100 shares of Common Stock outstanding as of December 12, 1996.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the 1997 Annual Meeting of
Shareholders are incorporated by reference in Part III hereof.

                      Exhibit Index appears on Page E-1.
<PAGE>
 
                            SEER TECHNOLOGIES, INC.
                          Annual Report on Form 10-K
                 For the Fiscal Year Ended September 30, 1996

                               Table of Contents
<TABLE>
<CAPTION>
Item                                                                                                  Page
Number                                                                                               Number 
------                                                                                               ------ 
<C>  <S>                                                                                             <C>     
                                                 PART I

 1.  Business.........................................................................................   1

 2.  Properties.......................................................................................   9

 3.  Legal Proceedings................................................................................   9

 4.  Submission of Matters to a Vote of Security Holders..............................................   9

                                                 PART II

 5.  Market for Registrant's Common Equity and Related Stockholder Matters............................  10

 6.  Selected Financial Data..........................................................................  10

 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations............  12

 8.  Financial Statements and Supplementary Data......................................................  19

 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............  19

                                                 PART III

10.  Directors and Executive Officers of the Registrant...............................................  19

11.  Executive Compensation...........................................................................  20

12.  Security Ownership of Certain Beneficial Owners and Management...................................  20

13.  Certain Relationships and Related Transactions...................................................  20

                                                 PART IV

14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................  20

SIGNATURES............................................................................................  26

INDEX TO FINANCIAL STATEMENTS......................................................................... F-1

INDEX TO EXHIBITS..................................................................................... E-1
</TABLE>


<PAGE>
 
                                    PART I
Item 1.  Business.
-----------------

GENERAL

     Seer Technologies, Inc. ("Seer" or the "Company"), a software leader and
pioneer in a $2 billion market, which is expected to reach $7 billion by 2001,
enables Fortune 1000 companies to efficiently run their businesses and maintain
a competitive edge by providing a suite of enabling software technology and
services. This suite contains application development software, middleware and,
in 1997, componentware, currently under development in Seer's labs. Companies
use this to build new applications and integrate existing large-scale, mission-
critical, distributed applications that can be simultaneously deployed across
entire enterprises to thousands of end users around the world.

     Seer has a blue chip customer base, including some of the largest companies
in the world, such as Credit Suisse, Federated Department Stores, Den Danske
Bank, Sikorsky Aircraft, and Wells Fargo Bank. These organizations face the need
to develop highly reliable software systems processing as few as 10 transactions
per day or in excess of 10 million transactions per day. The systems they
develop need to be distributed to up to thousands of concurrent end users, who
may be based on virtually any hardware platform, including the Internet and
intranets, in multiple locations.

     In addition, Seer's alliances with leading information technology companies
like International Business Machines Corporation ("IBM"), Microsoft Corp.,
Hewlett-Packard Company, Tandem Computer, Inc., and AT&T Corp., allow access to
the most important and timely platform information.

     Seer's products have consistently achieved the highest accolades from its
customers. That strength gives management a foundation on which to build a
profitable and growing company. Under the direction of a new chief executive
officer, Thomas A. Wilson, who joined the company in September 1996, the Company
is implementing a plan to transition Seer from a technology-driven company to a
market-driven company and to achieve improved results in 1997 and beyond. This
transition is critical, because it will allow Seer to properly present and prove
to the marketplace, for the first time, that it stands alone in the 
marketplace - because of its current suite of enabling technology, coupled with
the future technology being developed and tested in Seer labs.

     The Company was incorporated in March 1990 as a joint endeavor between IBM
and CS First Boston Securities Corporation ("FBS"). Although IBM now holds less
than a one percent equity interest in the Company, it remains an important
strategic partner. In June and September 1994, the investment firm of Welsh,
Carson, Anderson and Stowe VI L.P. ("WCAS"), together with certain of its
affiliates, acquired an approximately 83.9% equity interest in the Company. The
Company completed its initial public offering of 3,093,397 shares of Common
Stock in July 1995, and sold 2,094,143 shares of Series A Convertible Preferred
Stock ("Preferred Stock") to WCAS and certain of its affiliates in August 1996.
Each share of Preferred Stock may be converted at the holder's option into one
share of Common Stock, subject to adjustment under certain circumstances.
Holders of Preferred Stock are entitled to vote together with the holders of
Common Stock on all matters to be voted on by the Company's stockholders. As of
December 12, 1996, WCAS and its affiliates had the power to vote 66.4% of the
outstanding voting stock of the Company.

Financial Information About Industry Segments

     The Company operates in only one business segment. See the Company's
consolidated financial statements at Item 14.

                                       1
<PAGE>
 
PRODUCTS AND SERVICES

Seer*HPS

     Seer*HPS (High Productivity System) is a scalable, flexible application
development environment, which allows organizations to design, build and deploy
robust network-centric applications. Specifically, Seer*HPS gives development
organizations the ability to:

 . Create distributed computing applications among diverse servers;

 . Seamlessly integrate mainframe systems with distributed applications;

 . Easily build and deploy applications across multiple operating systems, 
  databases, protocols and communication paradigms;

 . Choose development approaches;

 . Develop reusable application components;

 . Employ team-based development; and

 . Quickly utilize add-on templates, models and integration packages.

     Business needs today dictate network-centric applications which can execute
across multiple operating platforms including the Internet and intranet. In
addition, these applications may need to routinely process high volumes of
transactions per second and/or serve thousands or tens of thousands of
concurrent end users. Seer*HPS is specifically architected to produce
applications that meet these complex, mission-critical needs.

     Seer*HPS accomplishes this with several key features, including a 
sophisticated workgroup repository and integrated middleware which, in turn,
provide for:

 . Automated application partitioning: Automatically partition multi-tier,
  distributed computing applications to take full advantage of the appropriate
  processing power, data, and presentation resources on the most suitable
  platform.

 . Mainframe connectivity: Easily integrate a mainframe into a distributed
  application to take full advantage of the existing application resources, high
  volume transaction throughput, and ability to support thousands of concurrent
  end users inherent in mainframe systems.

 . Fault tolerant options: Integrated middleware provides data-dependent and
  alternative transaction routing and server replication which allows an
  application to remain active seven days a week, twenty-four hours a day.

     In addition, complex network-centric systems often require a team approach
to development. Seer*HPS addresses these critical needs by providing a multi-
user development repository.

     Repositories can be scaled to support all levels of development, from the
department (5-20 developers) to the enterprise (20-100+ developers). The
Seer*HPS development repository is specifically designed to support concurrent,
team-based development with specialized project management and application
development coordination features.

                                       2
<PAGE>
 
Mainframe connectivity

     Preserving and extending mainframe assets is a major concern for many
organizations - legacy data, applications, and investments simply cannot be
discarded. In addition, mainframes offer significant computing and data storage
capabilities.

     Seer*HPS is ideal for IT organizations needing a full life cycle, model-
based development environment for the enterprise or a construction-oriented
development product for the department. In both cases, Seer*HPS provides a
robust development and deployment product suite for building large-scale,
complex network-centric applications.

     To expand or extend the life of these assets, Seer*HPS provides a complete
integration solution for mainframe-based applications. Options include:

 . Mainframe development: Seer*HPS offers a Windows NT and OS2 workstation-based
  development environment and a mainframe development option.
     
 . Mainframe application extension: Alternatively, existing mainframe CICS
  applications can be integrated into distributed computing applications running
  on Windows NT or UNIX servers and Windows clients via Seer*HPS's integrated
  middleware.

Technology Independence

     Seer*HPS incorporates sophisticated middleware and a complete development
environment to provide developers an open, turn-key infrastructure for network-
centric applications. Developers are shielded from the complexities associated
with building applications for multiple operating platforms, databases,
networking protocols, communication paradigms, and languages. Using Seer*HPS, IT
organizations can easily build and deploy, and even re-deploy, applications for
multiple platforms including the Internet and intranet from a single design.

Industry Standard Development Environment

     Seer*HPS provides developers with the comfort of using the industry
standard Windows NT platform or IBM's OS/2 platform. The workgroup repository
may reside on either Windows NT, HP-UX, Solaris, or AIX, and can connect to an
enterprise repository on MVS-based devices.

     This allows IT organizations to "standardize" development on the platform
of choice while leveraging corporate investments in existing systems and 
provides an open route to future network configurations.

Flexible Development Approach

     There is no "silver bullet" approach for developing complex network
applications today. Most IT organizations use varying methods based on the type
of application to be delivered.

     An enterprise will typically employ a rigorous method or model-driven
approach, whereas a department needing to quickly deploy a smaller scale
client/server application will use a construction or

                                       3
<PAGE>
 
Rapid Application Development (RAD) approach. Seer*HPS supports both the model-
driven and construction approaches for building network-centric applications.

     When a model-driven approach is used, Seer*HPS developers can automatically
generate network-centric applications based on their models. No manual
transformations are required. Using a construction approach, developers actually
prototype and test applications from the developer's workstation.

     Additionally, Seer offers a complete methodology product and consulting
service for those IT organizations that do not have a formal development method.

Team Based Development

     The most robust application ever built is of little use if not delivered
when needed. Seer*HPS can speed the development and deployment process through
an integrated multi-user repository. Complex applications can be broken down
into smaller components that can be developed by different members of a
development team.

     Reuse of these components enables future applications to be built faster,
with a higher assurance of quality, and with improved and consistent "look and
feel" through standardization. The Seer*HPS repository can support development
teams from five to 100+ developers. True scalability from the department to the
enterprise is provided.

Proven in Production

     Seer has been bringing mission-critical computing power to application
development for nearly a decade. Seer*HPS significantly expands upon the
Company's proven record for delivering innovative network-centric development
products.

     Seer*HPS is designed in a modular way to allow the development environment
to grow and change as the needs of the users change. Add-on enhancements include
modules, templates, and integration packages. Additional developer seats,
repositories, and execution server platforms may be easily and simply
integrated.

NetEssential

     Since 1990, Seer has provided client/server tools that have helped
customers at leading companies build and deploy large-scale, complex distributed
systems serving thousands of end users. NetEssential has been the middleware
engine enabling the interoperability and management of these applications across
multiple platforms.

     NetEssential middleware is the operational and management "glue" that
application developers use to integrate new, enhanced, and legacy applications
without regard to the application environment. NetEssential sits between the
network or operating system layer and the application layer. It enables
developers of new applications to focus on solving business needs rather than
understanding the intricacies of each combination of operating system, protocol,
Relational Database Management Systems (RDBMS), and communication paradigms.

                                       4
<PAGE>
 
     NetEssential allows incorporation of legacy systems into new distributed
computing systems, thereby extending the life of (and investment in) existing
applications, enables applications to be ported from one platform to another
quickly and easily, provides increased managability of distributed applications
across the enterprise, and gives IT management additional ways to build high
availability into the applications. Most importantly, NetEssential is proven
technology-already successfully in use around the world in some of the most
demanding computing environments.

     NetEssential 3.0, a standalone version of Seer's middleware that management
plans to launch in fiscal 1997, represents the latest advances in middleware
technology. Applications built using this technology are already in production
successfully worldwide at a variety of challenging computing sites. These
applications include the back office functions of a multi-national banking
operation, the trading desk applications at one of the world's foremost
securities company, decision support systems at major retail and manufacturing
companies, and customer billing applications at a large telecommunications
operation.

SALES AND MARKETING

     Sales

     The Company's direct sales staff has substantial knowledge of the Company's
products, as well as general experience in the software industry. Seer's field
sales force is headed by three General Managers, each of whom is assigned a
different geographic responsibility - one for the Americas, one for Europe,
Middle East and Africa ("EMEA") and one for the Asia Pacific region. Their
respective operations are divided into new sales and existing customer
partnerships. The Company's sales strategy emphasizes (i) decentralized,
geographically-based management, (ii) direct and indirect sales channels, 
(iii) existing account management, (iv) compensation based on achievement of 
specific sales objectives and (v) the establishing of additional marketing
partnerships. Revenue for each of the Americas, the EMEA and the Asia Pacific
regions for fiscal 1996 were $42.3 million, $49.5 million and $5.1 million,
respectively. As a percentage of the Company's total revenue, the Americas, EMEA
and the Asia Pacific regions for fiscal 1996 accounted for 43.7%, 51.1% and
5.3%, respectively.

     The Company's products have historically been designed for use primarily in
large-scale, complex computing environments. A customer's decision to use
Seer*HPS involves a substantial financial commitment, including the license
cost, consulting and deployment service costs and training expenses as well as a
substantial commitment of personnel resources. Accordingly, a decision to
purchase Seer products typically has been made by a customer's senior
management. As a result, the sales cycle for Seer*HPS historically has been
relatively lengthy, averaging nine to 12 months. The Company's sales process
follows a "solution selling" methodology based on identifying and meeting the
needs of a business.

     The Company's sales strategy will continue to involve a complete evaluation
of the customer's business followed by the identification and sale of products
that will meet the customer's immediate production requirements and provide it
with flexibility to scale up or down in the future.

     Marketing

     Because the Seer solution operates across numerous hardware platforms,
databases, application types and operating systems, a key component of the
Company's marketing strategy is the establishment of strategic alliances with
key vendors in the computer industry. Accordingly, the Company maintains
strategic marketing alliances with systems vendors (including AT&T, Compaq,
Hewlett-Packard, Intel and IBM), with database vendors (such as Informix, Oracle
and Sybase) and with Microsoft, the leading vendor of desktop operating systems
and productivity applications and a recent entrant into the client/server
operating systems sub-market.

                                       5
<PAGE>
 
     These alliances provide for the joint marketing of the participants'
products and enable the Company to:

     .   Establish and maintain marketing relationships with strategic hardware
         and software vendors to ensure that joint opportunities deliver the
         most effective solutions to Seer and its customers; and

     .   Obtain pre-release software, equipment loans and discounts for
         development, quality assurance, support, prototyping and other
         development activities that enable Seer to demonstrate and deliver more
         comprehensive solutions to its customers in a more timely fashion.

     The Company's most important strategic alliance, both historically and at
present, is with IBM, one of the Company's original stockholders. Transactions
resulting from the Company's relationship with IBM accounted for approximately
65%, 70% and 65% of the Company's revenues for fiscal 1996, fiscal 1995 and
fiscal 1994 respectively, and an even greater portion of the Company's
international revenues for each of those periods. Seer's relationship with IBM
exists on both a formal (in terms of a series of contractual relationships) and
an informal basis.

     For example, the Company has entered into a series of cross-industry
marketing agreements with IBM pursuant to which IBM markets the Company's
products on a non-exclusive basis in the United States, Canada, Puerto Rico and
the Asia/Pacific region, excluding Japan. In Japan, IBM has a non-exclusive
right to market and an exclusive right to distribute Seer products and services
to the financial services industry until September 1997. In Europe, IBM acts as
a non-exclusive marketer and distributor of the Company's products to IBM
customers. Although IBM plays a significant role in introducing the Company to
new customers in international markets, the Company's sales force is actively
involved in virtually all sales of the Company's product and provides crucial
support for the selling process.

     The Company's marketing team consists of a Senior Vice President, Worldwide
Marketing, who oversees a Director of Marketing Programs and a Product
Management Director. A series of product managers responsible for different
products and applications reports to the Product Management Director and
addresses functionality and delivery programs.

TARGET MARKETS

     In general, Seer's target market is the global Fortune 500 companies who
need to construct large-scale, complex mission-critical client/server
applications. This need is derived from a business situation and/or opportunity
in which management has decided to build an application rather than purchase
one. Typically, these decisions are driven by the need for companies to maintain
or establish competitive differentiation within their respective marketplaces.
Budgets for these projects typically fall in the millions of dollars.

     From a systems environment standpoint, these companies have the need to
deploy applications across multiple operating systems, databases and computing
platforms. The mainframe plays a key role in their enterprise computing
environments both from a legacy and new systems development standpoint. The
application will be required to scale from hundreds of users to potentially
thousands of end users. The application profile includes:

     . Complex business logic;
     . Transaction-based processing;
     . Distribution across multiple computing platforms; and
     . High performance and throughput.

                                       6
<PAGE>
 
     Seer addresses this market with two integrated solutions and plans to add a
third by the end of fiscal 1997. First, with its middleware product,
NetEssential, Seer provides customers with a middleware infrastructure allowing
distributed application components to be interoperated and managed in a
heterogeneous systems environment without re-architecture of their existing or
legacy applications.
                                                       
     Then, with the Company's completely integrated application development
toolset, Seer*HPS, companies can build new repository-based, model-driven
distributed applications that can be integrated with their existing and legacy
applications leveraging NetEssential Middleware to link and manage distributed
applications.

     Finally, by the end of fiscal 1997, Seer plans to market its application
assets to the finance industry. Seer's application asset library is currently
made up of templates that support 20 major functional areas of global securities
processing.

     In addition, Seer has recently acquired the exclusive right to market the
Cambridge Model. The Cambridge Model enables banks and financial institutions to
manage their information, products, risk and customer service on a local or
worldwide basis. It allows the rapid development of applications employing
reusable objects and supports the migration of legacy systems and the
establishment of data warehouses while supporting business process re-
engineering. Seer provides the model and necessary services as standalone or
packaged with Seer*HPS.

     Together or offered separately, these three initiatives offer customers a
comprehensive suite of products and seeks to address the lucrative distributed
computing application market.

CUSTOMERS

     Industries that are significantly represented in the Company's customer
base include banking, insurance, retail, manufacturing, data processing, public
utilities and transportation. A partial list of the Company's worldwide
customers using Seer*HPS is set forth below.

  Industry                             Customer Name
  --------                             -------------

Transportation                The Atchinson, Topeka and Santa Fe Railway Company

Manufacturing                 Sikorsky Aircraft Corporation

Retail Sales                  Federated Department Stores, Inc.

Finance/Banking               Banca Commerciale Italiana
                              Credit Suisse (Schweizerische Kreditanstalt)
                              Key Services Corporation
                              Wells Fargo Bank

Government Data Processing    Datacentralen A/S

     As indicated above, the Company's customers are leading companies in a
broad range of industries that typically have a need for high-performance
software applications. A significant number of the Company's customers deploy
Seer*HPS to provide key strategic applications that enhance the competitiveness
of their core business and allow them to bring new products to market more
quickly. For example, key strategic applications for which Seer*HPS has been
used by the following customers include:

                                       7
<PAGE>
 
Key Services        This large American bank used Seer*HPS software to develop  
Corporation         an automated Total Customer Service system. The system,
                    which customer service representatives use 24 hours a day,
                    seven days a week, handles up to 1,200 calls per hour and
                    one million calls per month. Using Seer*HPS, Key Services is
                    able to reduce response times and the time required for each
                    call, increasing customer satisfaction while reducing costs.
                    
Banca               This large Italian bank is using Seer*HPS for its Scala 6
Commerciale         project to overhaul the bank's information systems.  The 
Italiana            focus of this project is to download the processing function
                    from a central site to over 900 branches connected in real
                    time, allowing branches to handle customer accounts and
                    databases and improve customer service. One funds transfer
                    application developed in Seer*HPS has been deployed to over
                    15,000 workstations.

Federated           This leading U.S. retailer selected Seer for its migration
Department          from a mainframe system containing 13 million megabytes of
Stores, Inc.        data to a multi-tiered, distributed processing environment.
                    The system this client is developing will give associates in
                    500 stores across the country immediate access to crucial
                    business data, improving personal service and speeding
                    product development.

Datacentralen A/S   A centralized Danish government computer service bureau
                    selected Seer software as a pivotal part of its move from
                    its legacy mainframe environment to a three-tiered
                    client/server architecture. Seer is helping Datacentralen
                    develop advanced, platform-independent systems for the
                    finance ministry and tax administration. A system currently
                    in development for the central government wage system will
                    manage wages for over 200,000 people monthly

     The Company seeks to form "customer partnerships" whereby it works with a
customer to design a computer system that will meet the customer's production
requirements and long-term strategic needs. Seer has also formed customer
advisory boards that meet with customers approximately twice a year to obtain
feedback regarding the Company's products and services. In addition, the Company
holds annual customer conferences to present new information and address
customer concerns. It also receives a great deal of feedback through its
consulting services regarding the effectiveness of the Company's products in
meeting customer needs.

RESEARCH AND PRODUCT DEVELOPMENT

     The Company believes that the timely development of new products and
enhancements to existing products is essential to maintain its competitive
position. Delays or difficulties associated with new products or product
enhancements could have a material adverse effect on the Company's business,
operating results and financial condition. The Company conducts research and
development to enhance its existing products and to build new products, both
complementary to the existing product line and in new functional areas.

COMPETITION

     The market for client/server application development tools and related
consulting services is intensely competitive and characterized by rapid changes
in technology and evolving industry standards. To maintain or improve its
position in this market, the Company must continue to enhance its current
products and develop new products in a timely fashion. The Company believes that
competition in the large-scale client/server applications tools market is based
primarily on functionality, scalability and resulting application performance.
The Company believes that Seer*HPS competes favorably in each of these areas.

                                       8
<PAGE>
 
     The Company's competition is different in each of its market areas. In the
mainframe-based systems market, the Company's products compete directly with
products such as Texas Instruments' Composer, Anteres Alliance Group's Object
Star, and Arthur Andersen & Co.'s Foundation. In the middleware market, the
principal competitive products for NetEssential are Peer Logic's Pipes, Open
Environment Corporation's Entera, Precise Software's PRECISE, and TIBCO's
Rendezvous. Several of the Company's competitors have longer operating
histories; greater financial, technical, sales, marketing and other resources;
greater name recognition; more extensive marketing, distribution and sales
networks; and a larger, more established customer base.

EMPLOYEES

     As of September 30, 1996, Seer had a total of 758 employees. Of these
employees, 186 were engaged in software sales, marketing and technical support,
55 in administration, 161 in research and development and 356 in consulting and
training. The Company's continued success is dependent on its ability to attract
and retain qualified employees. To date the Company believes it has been
successful in this endeavor. However, due to the intense competition for
personnel in the software industry, there can be no assurance that the Company
will be successful in the future. The Company's employees are not represented by
a union or a collective bargaining agreement, and the Company considers its
relations with its employees to be good.

Item 2.  Properties.

     The Company's principal executive offices are located in approximately
106,000 feet of leased space in Cary, North Carolina. As of September 30, 1996,
the Company also leased 27 additional offices to provide consulting services to
its clients and to facilitate the distribution of its products. In the United
States, Seer's offices are located in New York, New York; Boston, Massachusetts;
Washington, D.C.; Atlanta, Georgia; Chicago, Illinois; Dallas, Texas; and San
Francisco, California. The Company also leases office space abroad in Canberra,
Melbourne and Sydney, Australia; Sao Paulo, Brazil; Mexico City, Mexico;
Toronto, Canada; Copenhagen, Denmark; Gent, Belgium; London, England (2
offices); Paris, France; Frankfurt, Germany; Rome, Italy; Milan, Italy; Madrid,
Spain; Nieuwegein, The Netherlands; Singapore; Hong Kong; Capetown, South Africa
and Stockholm, Sweden. The Company also maintains an office in Limerick, Ireland
on a set fee arrangement.

Item 3.  Legal Proceedings. 

     From time to time, the Company is a party to routine litigation incidental
to its business. As of the date of this Report, the Company was not engaged in
any legal proceedings that are expected, individually or in the aggregate, to
have a material adverse effect on the Company.

Item 4. Submission of Matters to a Vote of Security Holders.

     None.

                                       9
<PAGE>
 
                              PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters.

     The Common Stock of the Company is traded on the Nasdaq Stock Market under
the symbol SEER. The Company has never declared or paid any cash dividends on
its Common Stock. The Company anticipates that all of its earnings will be
retained for the operation and expansion of the Company's business and does not
anticipate paying any cash dividends in the foreseeable future. The Company's
credit agreements contain certain restrictive covenants which, among other
things, require the Company to maintain a minimum tangible net worth and
restrict the Company's ability to pay dividends. The chart below sets forth the
high and low stock prices for the quarters since the commencement of trading
following the Company's initial public offering on June 30, 1995.


                              Fiscal Year 1995        Fiscal Year 1996     
          Quarter             High       Low          High       Low
          -------             ----       ---          ----       ---
          1st                  N/A        N/A         $19.00     $10.75 
          2nd                  N/A        N/A         $13.50     $4.875 
          3rd                 $22.00     $20.25       $10.00     $4.75  
          4th                 $22.00     $13.00       $ 8.00     $5.00    

     The closing price of the Common Stock on September 30, 1996 was $6.00 per
share. As of December 12, 1996, the Company had 298 registered shareholders of
record.


Item 6.  Selected Financial Data. 

     The following selected financial data is derived from the consolidated
financial statements of the Company. The data should be read in conjunction with
the consolidated financial statements, related notes, and other financial
information included herein.

                                       10
<PAGE>
 
                 SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE> 
<S> 
                                                                             Nine        Fiscal      
                                          Fiscal Year Ended              Months Ended  Year Ended
                                               Sept. 30,                   Sept. 30,     Dec. 31,
                                ---------------------------------------- ------------  ----------
                                  1996       1995       1994      1993       1992        1991        
<S>                            <C>          <C>        <C>        <C>        <C>        <C> 
Statement of Operations Data:
(in thousands, except per share
amounts)

Total revenue                   $ 96,943    $117,180   $82,693    $48,901    $21,466    $20,039
Gross profit                      38,609      72,542    44,901     29,378     12,836     11,508
Income (loss) from operations    (45,112)      9,254     3,451      1,972     (1,717)      (278)
Net income (loss)                (31,582)      5,152     2,361        980     (2,501)       333
Pro forma net income per
   common share                    (2.76)       0.45      0.21       0.09
                                 =======    ========   =======    =======
Pro forma weighted average
   common shares outstanding      11,445      11,507    10,986     10,919
                                 =======    ========   =======    =======

Balance Sheet Data:

Working capital                  $ 3,963     $ 34,087  $ 4,777    $ 3,928    $ 5,232      6,677
Total assets                      78,804       76,444   37,363     25,049     15,318     14,705
Total Debt                        14,379            -    2,700          -          -          -   
Senior redeemable  
   preferred stock                     -            -   13,195          -          -          -   
Series A preferred stock          12,302            -        -     20,875     17,844     16,000
Total stockholders' equity
   (capital deficiency)           30,053       48,438   (2,096)   (12,934)   (10,820)    (6,441)
</TABLE> 

                                       11
<PAGE>
 
Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

General

     The Company has three categories of revenue: software products, maintenance
and services. Software products revenue is comprised primarily of fees from
licensing the Company's proprietary software products and, to a much lesser
extent, from product development contracts. Maintenance revenue is comprised of
fees for maintaining, supporting and providing periodic upgrades of the
Company's software products. Services revenue is composed primarily of fees for
consulting and training services.

     Consistent with the American Institute of Certified Public Accountants
Statement of Position 91-1, "Software Revenue Recognition," the Company
allocates a portion of the software license fee to initial period maintenance
when the maintenance period is greater than three months. The remainder is
recognized as license fee revenue upon delivery of the software product to, and
acceptance by, the customer. Revenue from the initial period and subsequently
priced maintenance agreements is recognized ratably over the term of the
agreement. Consulting and training services revenue is recognized as the
services are performed.

     The Company's revenues vary from quarter to quarter, with the largest
portion of revenue typically recognized in the last month of each fiscal quarter
and the third and fourth quarters of each fiscal year. The Company believes that
these patterns are partly attributable to the Company's sales commission
policies, which compensate sales personnel for meeting or exceeding quarterly
and annual quotas, and to the budgeting and purchasing cycles of customers.
Furthermore, as the size of individual sales is large, a single account may have
a significant impact on a quarter. In addition, the substantial commitment of
executive time and financial resources historically required of a potential
customer to make a decision to purchase the Company's products increases the
risk of quarter-to-quarter fluctuations. The Company typically does not have a
material backlog of unfilled software orders, and product revenue in any quarter
is substantially dependent upon orders received in that quarter. In addition,
the Company's services revenue may fluctuate from quarter to quarter due to the
completion or commencement of significant assignments, the number of working
days in a quarter and the utilization rate of services personnel. Because the
Company's operating expenses are based on anticipated revenue levels and are
relatively fixed over the short term, variation in the timing of recognition of
specific anticipated revenue can cause significant variations in operating
results from quarter to quarter. Fluctuations in operating results may result in
volatility in the price of the Company's common stock.

     In fiscal year 1997, management intends to implement certain changes in the
Company's business practices. The focus of these efforts is to better align
products to customer needs and to establish long-term "partnerships" between the
Company and its customers. These changes are expected to lessen the impact on
revenues of individual sales to a customer and reduce the variations in
operating results from quarter to quarter.

     This report contains forward-looking statements relating to such matters as
anticipated financial performance, business prospects, technological
developments, new products, research and development activities and similar
matters. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. In order to comply with the terms of the
safe harbor, the Company notes that a variety of factors could cause its actual
results and experience to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. The
Company's performance, development and results of operations may be affected by
the risks presented by: (i) continued market acceptance of the Company's
technology; (ii) fluctuations in quarterly operating results and volatility of
the price of the Company's common stock; (iii) competition; (iv) the Company's
reliance on its relationship with IBM; (v) customer concentration; (vi) the
potential failure to meet product delivery dates; (vii) matters relating to
international operations; and (viii) intellectual property and proprietary
rights. Other risks are also presented. The Company's Registration Statement on
Form S-1 (Registration N. 33-92050) contains a full description of the risks
presented by the Company's operations.

                                       12
<PAGE>
 
Results of Operations

     The following table sets forth, for the years indicated, the Company's
results of operations expressed as a percentage of revenue.

<TABLE>
<CAPTION>
                                                    For the Years Ended September 30, 
                                                      1996        1995         1994   
                                                    -------      ------       ------   
<S>                                                   <C>        <C>           <C>
Revenue:                                                                              
    Software products                                 29.7%       47.3%        45.7%  
    Maintenance                                       13.6%        9.5%         8.9%  
    Services                                          56.7%       43.2%        45.4%  
                                                    ------       -----        -----  
      Total                                          100.0%      100.0%       100.0%  
                                                                                      
Cost of revenue:                                                                      
    Software products                                  1.6%        0.5%         0.4%  
    Maintenance products                               8.6%        6.4%         5.1%  
    Services                                          50.0%       31.2%        40.2%  
                                                    ------       -----        -----  
      Total                                           60.2%       38.1%        45.7%  
                                                                                      
Gross profit                                          39.8%       61.9%        54.3%
                                                                                      
Operating expenses:                                                                   
    Sales and marketing                               45.4%       33.6%        28.0%  
    Research and product development                  17.3%       12.4%        14.2%  
    General and administrative                        20.5%        8.0%         7.9%  
    Restructuring charges                              3.1%          -            -   
                                                    ------       -----        -----  
      Total                                           86.3%       54.0%        50.1%  
                                                                                      
Other income (expense), net                           (0.2)%      (0.4)%       (0.1)% 
                                                    ------       -----        -----  
Income (loss) before taxes                           (46.7)%       7.5%         4.1%  
                                                                                      
Income tax provision (benefit)                       (14.1)%       3.1%         1.3%  
                                                    ------       -----        -----  
Net income (loss)                                    (32.6)%       4.4%         2.8%  
                                                    ======       =====        =====  
</TABLE>


                                       13
<PAGE>
 
The following table sets forth data for total revenue by geographic origin as a
percentage of total revenue for the periods indicated:

<TABLE>
<CAPTION>
                                               For the Years Ended September 30,
                                                1996         1995         1994
                                                ----         ----         ----
<S>                                             <C>          <C>          <C>
United States                                    31.3%        27.5%        37.0%
Mexico/Canada                                     6.0%         4.4%         2.4% 
South America                                     6.4%         3.1%         3.3%
Europe                                           48.2%        57.4%        50.4%
Middle East/Africa                                2.8%         3.3%           -
Asia Pacific                                      5.3%         4.3%         6.9%
                                                -----        -----        -----
                                                100.0%       100.0%       100.0%
                                                =====        =====        =====
</TABLE>

Year Ended September 30, 1996 Compared to the Year Ended September 30, 1995

     Revenue.  The Company's total revenue decreased 17% for fiscal year 1996 as
compared to the previous year. The decrease was primarily attributable to a
decrease in software products revenue, which was partially offset by increases
in maintenance revenue and services revenue. Total revenue remained relatively
constant in the Asia Pacific region and increased 3% in North and South America.
In the Europe, Middle East, and Africa region, total revenue declined by 30%.

     Software products.  Software products revenue decreased 48% in fiscal year
1996 as compared to fiscal year 1995. While the Company was able to continue to
build business with existing customers, the lack of direction and focus both
internally and externally had a significant impact on the Company's ability to
reach new customers, resulting in a decline in the sales of new software
licenses. Software product sales to new customers as a percentage of total
software products revenue declined from approximately 60% in fiscal year 1995 to
27% in fiscal year 1996.

     Maintenance.  Maintenance revenue increased 18% in fiscal year 1996 as
compared to fiscal year 1995. Because substantially all of the Company's
existing customers have historically renewed their maintenance contracts, the
increase for fiscal year 1996 is primarily a result of new customers added
during fiscal year 1995 and the first three quarters of fiscal year 1996. As a
result of declining software sales during fiscal year 1996, maintenance revenue
is not expected to increase significantly from fiscal year 1996 to fiscal year
1997.

     Services.  Services revenue for the fiscal year 1996 increased 9% as
compared to the previous year. The increase in services revenue is due primarily
to services related to license sales made in the third and fourth quarters of
fiscal year 1995, as well as the expanded use of the Seer*HPS family of products
by existing customers for more numerous and complex applications.

     Gross Profit.  Total gross profit for fiscal year 1996 decreased 47% from
the previous year. Total gross margin decreased to 40% for fiscal year 1996 as
compared to 62% in fiscal year 1995. These decreases are due primarily to the
decrease in software revenue as a percentage of total revenue in fiscal year
1996.

      Software gross margin decreased to 95% for fiscal year 1996 as compared to
99% for fiscal year 1995. The decline is a result of lower software revenue and
higher software amortization during fiscal year 1996. The $1.0 million increase
in amortization resulted from costs associated with Seer*HPS 5.3, which began to
be amortized when it became generally available in the first quarter of fiscal
year 1996, and Seer*HPS for Windows NT (previously named Seer/7000), which began

                                       14
<PAGE>
 
to be amortized when it became generally available in the fourth quarter of
fiscal year 1996.
     
     Maintenance gross margins increased to 37% for fiscal year 1996 as compared
to 33% for fiscal year 1995. The improvement in maintenance gross margins for
fiscal year 1996 was primarily due to an 18% increase in revenue from first year
and renewal contracts, offset by an 11% increase in associated headcount and
other expenses.

    Services margins for fiscal year 1996 decreased to 12% as compared to 28%
for fiscal year 1995. The decline in services margin is primarily a result of a
34% increase in the costs associated with headcount, outside contractors and
other consulting obligations while services revenue increased by only 9% for
fiscal year 1996.

     Sales and Marketing Expense. Sales and marketing expense for fiscal year
1996 increased 12% as compared to the previous year. The increase is the result
of the expansion of the Company's sales force worldwide prior to the
restructuring discussed below, as well as an increase in certain commissions.
Average sales and marketing headcount increased 10% during fiscal year 1996 as
compared to fiscal year 1995. The 1996 amounts were also impacted by $.9 million
of marketing expenses recorded in conjunction with the sale of software to a
large customer in Europe and an increase of $.2 million in commissions paid to
IBM for sales of the Company's software products in South America made by IBM.

     Research and Product Development Expense. Research and product development
expense increased 16% for fiscal year 1996 compared to fiscal year 1995. The
increase is primarily a result of personnel additions to develop and test new
products. Costs associated with headcount and outside contractors which were
expensed increased 13% for the fiscal year 1996 from the fiscal year 1995.
Capitalization of costs related to the development of Seer*HPS for Windows NT
(previously named Seer/7000), partially offset the impact of personnel additions
on the year's research and development expense in comparison to the prior year.
Costs capitalized for software development increased approximately $.7 million
for fiscal year 1996.

     General and Administrative Expense. General and administrative expenses for
fiscal year 1996 were most significantly impacted by certain nonrecurring
adjustments. In the fourth quarter of fiscal year 1996, the Company recorded
allowances of $10.1 million for certain accounts receivable whose collection is
considered uncertain and for a specific product-related settlement. Excluding
these nonrecurring charges, general and administrative expense increased only 4%
from fiscal year 1995 as a result of increased headcount in the first half of
the fiscal year 1996 prior to the restructuring discussed below.

     Restructuring Charges. During the third quarter of fiscal year 1996, the
Company developed and implemented a reorganizational plan which included, among
other things, a 9% staff reduction (75 employees) and the abandonment of certain
leased facilities. The Company recorded a restructuring charge of $3.0 million,
which consisted of approximately $1.4 million in personnel-related charges and
approximately $1.6 million of costs associated with carrying vacated leased
space until the lease expiration date. To date, the Company has paid
approximately $1.4 million in cash related to the restructuring. The Company
believes the accrued restructuring costs of $1.6 million at September 30, 1996
represents its remaining cash obligations.

     Management is developing a plan for an additional restructuring which will
occur during the first quarter of fiscal year 1997. 

     Provision for Income Taxes. The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." Income taxes decreased from an expense of $3.7 million for
fiscal year 1995 to a benefit of ($13.7) million for fiscal year 1996. The

                                       15
<PAGE>
 
effective income tax rate decreased from 41.5% for fiscal year 1995 to 30% for
fiscal year 1996. The decrease in the effective rate of 11.5% is primarily
attributed to lower foreign withholding taxes related to foreign software
license agreements and utilization of foreign tax credits.

     The Company has net deferred tax assets of $17.6 million as of September
30, 1996, of which $4.7 million consists of foreign tax credits, research and
development tax credits, and alternative minimum tax credits. With respect to
deferred tax assets related to net operating loss carryforwards, it is the
opinion of management that is is more likely than not that the realization of
these deferred tax assets will occur in the future based on current earnings
forecasts, tax planning strategies, which include the potential sale of a line
of business and/or product assets, and reversals of future book-tax timing
differences.

     With respect to foreign tax credits, research and development tax credits
and alternative minimum tax credits, management believes, based on several
factors, that the available objective evidence creates sufficient uncertainty
regarding the potential realization of these deferred tax assets due to the fact
that the net operating loss must be utilized before these credits. As a result,
valuation allowances have been recorded for foreign tax credits, research and
development tax credits, and alternative minimum tax credits. The factors which
create sufficient uncertainty include the unpredictability of the geographic
source of future software licenses, certain tax rules related to foreign source
income and foreign tax credits, and the historical level of annual foreign
withholding taxes. Management believes that, based on the available evidence, it
is more likely than not that the Company will not realize the deferred tax
assets related to foreign tax credits, research and development tax credits, and
the alternative minimum tax credits. The Company will continue to assess the
potential realization of these deferred tax assets based on actual and projected
operating results.

Year Ended September 30, 1995 Compared to the Year Ended September 30, 1994

     Revenue. The Company's total revenues increased 42% to $117.2 million for
fiscal year 1995 from $82.7 million for the previous year.

     Software products. Software products revenue for fiscal year 1995 increased
by 47% to $55.4 million as compared to $37.8 million in the previous year. The
increase occurred in the Europe, Middle East and Africa region where software
product revenue increased by 113% during fiscal year 1995 as a result primarily
of three purchases of the Company's Seer*HPS product which exceeded $5 million
each. The total software products revenue associated with these purchases was
$21.4 million. During fiscal year 1995 the Company expanded its selling and
marketing efforts in those regions and has gained continued market acceptance of
its products which allowed the Company to record sales to eighteen new customers
totaling $11.7 million in the North and South America region and six new
customers totaling $2.3 million in the Asia/Pacific region.

     Maintenance. Maintenance revenue for fiscal year 1995 increased by 52% to
$11.1 million as compared to $7.3 million in the previous year. Because
substantially all of the Company's existing customers have historically renewed
their maintenance contracts, the increase is a result primarily of the Company
recording a full year of revenue for new customers added during fiscal year
1994. For fiscal year 1995, $10.3 million of maintenance revenue was generated
from customers that purchased software products prior to September 30, 1994.

     Services. Services revenue for fiscal year 1995 increased 35% to $50.6
million as compared to $37.6 million in the previous year. The increase is
primarily due to expanded use of the Seer*HPS product by existing customers for
more numerous and complex applications. Approximately 85.4% of the Company's
services revenue, or $43.2 million, was generated from customers that purchased
software prior to September 30, 1994.

     Gross Profit. Total gross profit for fiscal year 1995 increased 62% to
$72.5 million as compared to $44.9 million for the previous year. Total gross

                                       16
<PAGE>
 
margin increased to 61.9% for fiscal year 1995 as compared to 54.3% in the
previous year primarily as a result of improving margins in the services area.
Software gross margin decreased to 99.0% for fiscal year 1995 as compared to
99.2% for the previous year as a result of higher amortization of capitalized
software, which is the largest component of the cost of software, in fiscal year
1995. Maintenance gross margins decreased to 32.9% for fiscal year 1995 as
compared to 42.3% in the previous year as a result primarily of pricing
discounts provided to several customers on long term maintenance commitments.
Additionally, the customer support staff was increased during the year to
accommodate the Company's growth. Average headcount in the customer support
department increased to 34 for fiscal year 1995 compared to 22 in the previous
year. Services gross margin increased to 27.7% for fiscal year 1995 compared to
11.4% for the previous year as a result of better utilization of the existing
consulting staff during fiscal year 1995. Average services headcount increased
by 13% to 313 during fiscal year 1995 compared to 278 in the previous year.

     Sales and Marketing Expense. Sales and marketing expenses for fiscal year
1995 increased 70% to $39.4 million as compared to $23.1 million for the
previous year. Additionally, sales and marketing expense as a percent of revenue
increased to 33.6% for fiscal year 1995 compared to 28.0% in the previous year.
These increases are a result of the increased expansion of the Company's
worldwide sales force, increased promotional spending and the establishment of a
business development staff during fiscal year 1995 to develop strategic
relationships and alternate distributions channels for the Company's product.

     Research and Product Development Expense. Research and product development
expenses for fiscal year 1995 increased 23% to $14.5 million compared to $11.8
million in the previous year. Research and product development costs relate
primarily to development efforts related to Seer*HPS version 5.3 and continuing
development of new products. Research and development expenses as a percent of
revenue decreased to 12.4% for fiscal year 1995 compared to 14.2% in the
previous year.

     General and Administrative Expense. General and administrative expenses for
fiscal year 1995 increased 43% to $9.4 million compared to $6.6 million in the
previous year as a result primarily of personnel additions necessary to manage
and support the Company's growth. General and administrative expenses as a
percent of revenue increased to 8.0% for fiscal year 1995 compared to 7.9% in
the previous year.

     Provision for Income Taxes. Income tax expense fiscal year 1995 increased
to $3.7 million from $1.0 million for fiscal year 1994. The effective income tax
rate increased to 41.5% for fiscal year 1995 from 30.5% for fiscal year 1994.
The increase in the effective rate of 11% is a result of increased profitability
of the Company and changes in the valuation allowance for certain deferred tax
assets. Also, the effective rate for fiscal year 1994 included a benefit from a
previous net operating loss carryforward which was not applicable in computing
the effective rate for fiscal year 1995.


Liquidity and Capital Resources

     During fiscal year 1996, the Company's operating and capital requirements
were financed primarily through cash received from its initial public offering
during fiscal year 1995, borrowings under its credit facilities, and cash
received from the issuance of convertible preferred stock.

     Cash used in operations increased to $36.2 million for fiscal year 1996
compared to $12.2 million and $.6 million for fiscal years 1995 and 1994,
respectively. The increased use of cash in operations in fiscal year 1996 is a
result of increases in operating expenses to support headcount growth in the
first half of fiscal year 1996, as well as declining software product sales. See
"Results of Operations" above. Cash flow from operations has also been
unfavorably impacted by an increase in the time of collection for the Company's
accounts receivable during fiscal year 1996, due partially to extended payment
terms granted to certain software customers.

     Cash used in investing activities decreased to $4.4 million for fiscal year
1996 compared to $5.2 million for fiscal year 1995 and $4.3 million for fiscal
year 1994. The 1996 decrease was primarily the result of a $1.5 million decrease
in capital expenditures during fiscal year 1996 as compared to fiscal year 1995,
while the 1995 increase was a result of an increase in capital expenditures
during that year. Capital expenditures in fiscal year 1995 were primarily for
purchases of computer equipment for software development and support associated
with the Company's new product development. As of September 30, 1996, the
Company did not have any material commitments for capital expenditures.

                                       17
<PAGE>
 
     Cash provided by financing activities during fiscal year 1996 of $27.3
million resulted primarily from the Company's sale of Series A Convertible
Preferred Stock (the "Preferred Stock") in August 1996, which provided $12.3
million, net of associated costs. Net borrowings under the Company's lines of
credit also increased to $14.4 million for fiscal year 1996. Cash provided by
financing activities during fiscal year 1995 of $29.8 million resulted primarily
from the Company's initial public offering of Common Stock, which provided $49.4
million, net of associated costs. Proceeds of the offering were used to redeem
the Senior Redeemable Preferred Stock and accrued dividends of $15.6 million and
$15.1 million in borrowings under the Company's credit agreements. Cash provided
by financing activities during fiscal year 1994 resulted from net borrowings
under the Company's line of credit.

     At September 30, 1996, the Company maintained two credit facilities (the
"Revolving Facility" and the "Guaranteed Facility") which provide for combined
borrowings of up to $32.5 million for working capital purposes based on the
Company's eligible accounts receivable, as defined in the loan agreements. The
Revolving Facility allows for borrowings of up to $20 million, bears interest at
the London Interbank Offered Rate ("LIBOR") plus 3.0%, and is collateralized by
the Company's accounts receivable and other assets. The Guaranteed Facility
allows for borrowings of up to $12.5 million and bears interest at LIBOR plus
1.25% or the higher of .5% plus the prime rate or the rate quoted by the Federal
Reserve, depending on the type of advance, as defined in the loan agreement. The
Guaranteed Facility is guaranteed by the Company's principal stockholder, Welsh,
Carson, Anderson, & Stowe VI, L.P. ("WCAS"), pursuant to an agreement with the
Company. Borrowings are made under the facilities based upon a ratio, defined in
the loan agreements, which varies with the Company's tangible net worth. The
facilities require the Company's compliance with various covenants, which among
other things, require the Company to maintain a minimum tangible net worth and
limit the amount of dividends and other payments by the Company. As of September
30, 1996, the Company had outstanding borrowings of $10.6 million under the
Revolving Facility and $3.8 million under the Guaranteed Facility. The interest
rates for the Revolving Facility and the Guaranteed Facility were 8.5% and
8.25%, respectively, at September 30, 1996. The facilities expire on September
30, 1997. The Company intends to renegotiate and extend the credit facilities;
however, there can be no assurance that the credit facilities can be extended on
acceptable terms.

     Beginning in fiscal year 1995, the Company entered into foreign exchange
forward contracts to hedge the exposures that arise from foreign exchange rate
movements between dates that foreign currency denominated receivables are
recorded and the date they are paid. The Company does not engage in foreign
currency speculation. The Company has a line of credit of $3.5 million available
from the lender to enter foreign exchange contracts with the lender. The
aggregate notional amount of foreign exchange contracts outstanding from the
lender cannot exceed $23.3 million. At September 30, 1996 the aggregate notional
amount of foreign exchange contracts outstanding from the lender was $22.7
million.

    During August 1996, the Company sold 2,094,143 shares of Preferred Stock to
WCAS and certain WCAS affiliates, resulting in gross proceeds to the Company of
$12.5 million. The net proceeds from the sale of the Preferred Stock, which
totaled $12.3 million, were used for general corporate purposes. The sale of the
Preferred Stock was made in a private transaction exempt from the registration
requirements of the federal securities laws.

     Each share of Preferred Stock may be converted at any time at the option of
the holder into shares of Common Stock at a conversion rate of one common share
for each share of Preferred Stock, subject to adjustment upon the occurrence of
certain events. The Preferred Stock is not entitled to receive dividends in any
fixed amount but will receive dividends on an as converted basis in the event

                                       18
<PAGE>
 
that a dividend is paid on the Common Stock. The Preferred Stock will rank
senior in right of payment to the Common Stock. In the event of any liquidation,
dissolution or winding up of the Company, holders of Preferred Stock will be
entitled to receive a liquidation preference of $5.969 per share before payment
is made or assets are distributed to holders of the Common Stock. In addition,
the holders of Preferred Stock are entitled to vote together with the holders of
Common Stock on all matters to be voted on by the stockholders of the Company.

     The Company is subject to certain restrictions while shares of Preferred
Stock remain outstanding, including restrictions on the Company's ability to
declare dividends, purchase or redeem any outstanding shares of Common Stock,
create or authorize the creation of additional classes of capital stock of the
Company, increase the authorized amount of Preferred Stock, or create or
authorize the creation of any securities convertible into shares of Preferred
Stock or any other class of capital stock of the Company.

     The Company believes that existing cash on hand and additional borrowings
under its lines of credit will be sufficient to finance its operations and
expected working capital and capital expenditure requirements for at least the
next twelve months. Thereafter, the Company's liquidity will depend upon the
results of future operations, as well as available sources of financing. There
can be no assurance that the Company will be able to meet its loan covenants,
achieve its operating plan or, if needed, obtain additional financing on
acceptable terms, and the failure to do so may have an adverse impact on the
Company's business and operations.

Recent Accounting Pronouncements

     In March, 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS No. 121"), which is generally effective for fiscal years beginning after
December 15, 1995. SFAS No. 121 is not anticipated to have a material effect on
the financial position or results of operations of the Company.
     
     In October, 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), which is generally effective for fiscal years
beginning after December 15, 1995. SFAS No. 123 is not anticipated to have a
material effect on the financial position or results of operations of the
Company.

Item 8.  Financial Statements and Supplementary Data.

     The information required by this item appears beginning on page F-1 of this
report. (See Items 14(a)(1) and (2).

Item 9.  Changes in and Disagreements on Accounting and Financial Disclosure.

     None.

                             PART III

Item 10.  Directors and Executive Officers of the Registrant.

     The information required by this item is incorporated by reference to
information included under the captions "Election of Directors," "Executive
Officers" and "Compliance with Section 16(a) of the Securities Exchange Act of
1934" in the Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders.

                                       19
<PAGE>
 
Item 11.  Executive Compensation.

     The information required by this item is incorporated by reference to
information included under the captions "Election of Directors - Director
Compensation" and "- Compensation Committee Interlocks and Insider
Participation," "Executive Compensation," "Compensation Committee Report on
Executive Compensation" and "Stock Performance Graph" in the Company's Proxy
Statement for the 1997 Annual Meeting of Stockholders.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

     The information required by this item is incorporated by reference to
information included under the caption "Beneficial Ownership of Common Stock" in
the Company's Proxy Statement for the 1997 Annual Meeting of Stockholders.

Item 13.  Certain Relationships and Related Transactions.

     The information required by this item is incorporated by reference to
information included under the caption "Election of Directors - Compensation
Committee Interlocks and Insider Participation" in the Company's Proxy Statement
for the 1997 Annual Meeting of Stockholders.

                                 
                              PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     (a)  The following documents are filed as part of this Report:

          1.   Financial Statements

               The following financial statements of the Company and the related
               report of independent accountants thereon are set forth
               immediately following the Index of Financial Statements which
               appears on page F-1 of this report:

               Report of Independent Accountants

               Consolidated Balance Sheets at September 30, 1996 and 1995

               Consolidated Statements of Operations for each of the three years
               in the period ended September 30, 1996

               Consolidated Statements of Changes in Stockholders' Equity
               (Capital Deficiency) for each of the three years in the period
               ended September 30, 1996

               Consolidated Statements of Cash Flows for each of the three years
               in the period ended September 30, 1996

               Notes to Consolidated Financial Statements

          2.   Financial Statement Schedules:

               All schedules for which provision is made in the applicable
               accounting regulations of the Securities and Exchange Commission
               are not required under the related instructions or are
               inapplicable and therefore have been omitted.

                                       20
<PAGE>
 
          3.   (a)  Exhibits:

                    The following exhibits are filed as part of this Report.
                    Parenthetical references indicate incorporation by reference
                    to documents previously filed by the Company with the
                    Securities and Exchange Commission (Commission File No. 0 -
                    26194).

                    Exhibit
                    Number    Description
                    -------   -----------
                    3.1       Certificate of Incorporation (Exhibit 3.1 to the
                              Company's Registration Statement on Form S-1,
                              No. 33-92050), as amended to include the
                              Certificate of Designation of Series A Convert-
                              ible Preferred Stock of the Company (Exhibit 4.4
                              to the Quarterly Report on Form 10-Q for the
                              period ended June 30, 1996)
                                                   
                    3.2       Amended and Restated By-Laws of the Company
                              (Exhibit 3.2 to the Company's Registration
                              Statement on Form S-1, No. 33-92050)


                    4.1       Specimen Common Stock certificate (Exhibit 4.1
                              to the Company's Registration Statement on Form
                              S-1, No. 33-92050)
 

                    4.2       See Exhibits 3.1 and 3.2 for the provisions of
                              the Company's Certificate of Incorporation and
                              Bylaws governing the rights of holders of
                              securities of the Company
                              

                    4.3       Specimen Preferred Stock certificate (Exhibit
                              4.3 to the Quarterly Report on Form 10-Q for the
                              period ended June 30, 1996)
                              

                    10.1      Software Agreement, dated March 7, 1990, among
                              the Company, FBC, FBS and FBTI, with amendment
                              thereto (Exhibit 10.1 to the Company's Registra-
                              tion Statement on Form S-1, No. 33-92050)
 

                    10.2      Services Agreement, dated March 8, 1990, among
                              the Company, FBPC and FBC (Exhibit 10.2 to the
                              Company's Registration Statement on Form S-1,
                              No. 33-92050)
                              
                    10.3      License Agreement, dated March 7, 1990, between
                              the Company and IBM (Exhibit 10.3 to the 
                              Company's Registration Statement on Form S-1, 
                              No. 33-92050)
 
 
                    10.4      Software Escrow Agreement, dated March 7, 1990,
                              among the Company, IBM and Data Securities
                              International, Inc. as Escrow Agent (Exhibit 10.4
                              to the Company's Registration Statement on Form
                              S-1, No. 33-92050)
                              

                    10.5      Bill of Sale and Assumption Agreement, dated
                              March 8, 1990, among the Company, FBC, FBTI, FBS
                              and FBPC (Exhibit 10.5 to the Company's
                              Registration Statement on Form S-1, No. 33-92050)

                                       21
<PAGE>
 
                    10.6       Form of Employee's Non-Competition,
                               Confidentiality and Invention Assignment 
                               Agreement (Exhibit 10.6 to the Company's 
                               Registration Statement on Form S-1, No. 
                               33-92050)


                    10.7       Form of Consultant's Non-Competition,
                               Confidentiality and Invention Assignment
                               (Exhibit 10.7 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
                               

                    10.9       International Software Marketing Agreement,
                               dated June 7, 1993, between the Company and IBM
                               (Exhibit 10.9 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
                               

                    10.10      Product Remarketing Supplement to International
                               Software Marketing Agreement, dated June 10,
                               1993, between the Company and IBM (Asia and
                               Pacific Rim) (Exhibit 10.10 to the Company's
                               Registration Statement on Form S-1, No. 33-92050)
                               

                    10.11      Master Distribution Agreement, dated February
                               27, 1992, between the Company and IBM Japan
                               Ltd., with amendments thereto (Exhibit 10.11 to
                               the Company's Registration Statement on Form S-
                               1, No. 33-92050)


                    10.12      Seer Product License Agreement, dated February
                               27, 1992, between the Company and IBM Japan Ltd.
                               (Exhibit 10.12 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)

 
                    10.13      Master Distribution and License Agreement,
                               dated April 6, 1992, between the Company and IBM
                               Ireland Information Services Ltd. ("IISL")
                               (Exhibit 10.13 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
                               

                    10.14      Cooperative Solution Supplier Program , dated
                               April 2, 1992, between the Company and IBM
                               Canada Ltd., with amendment thereto. (Exhibit
                               10.14 to the Company's Registration Statement
                               on Form S-1, No. 33-92050)
                               

                    10.15      Master Distribution and License Agreement, dated
                               December 30, 1993, between the Company and IBM
                               Australia Limited (Exhibit 10.15 to the Company's
                               Registration Statement on Form S-1, No. 33-
                               92050)

                               
                    10.16      Project Viking Funding Agreements, dated
                               September 4, 1992, between the Company and IBM
                               (Exhibit 10.16 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
                               
 
                   10.17       License Agreement, dated March 21, 1995,
                               between the Company and Seer Technologies
                               Benelux B.V. (Exhibit 10.17 to the Company's
                               Registration Statement on Form S-1, No. 33-92050)
                               
                                       22
<PAGE>
 
                    10.18     License Agreement, dated March 20, 1995, between
                              the Company and Seer Technologies Ireland
                              Limited (Exhibit 10.18 to the Company's 
                              Registration Statement on Form S-1, No. 33-92050)

                    10.19     $25,000,000 Credit Facility, dated February 24,
                              1994, between the Company and NationsBank, N.A.
                              (Carolinas) (Exhibit 10.19 to the Company's
                              Registration Statement on Form S-1, No. 33-92050)
 
                    10.20     Lease Agreement, dated July 30, 1991, between the
                              Company and Regency Park Corporation (Cary, NC),
                              with Addenda thereto (Exhibit 10.21 to the
                              Company's Registration Statement on Form S-1, 
                              No. 33-92050)
 
                    10.22     Lease Agreement, dated December 25, 1992,
                              between the Company and Capital & Counties 
                              (London, England ) (Exhibit 10.22 to the Company's
                              Registration Statement on Form S-1, No. 33-92050)
 
                    10.23     Preferred Stock Purchase Agreement, dated 
                              March 7, 1990, among the Company, International
                              Business Machines Corporation ("IBM") , First
                              Boston Securities Corporation ("FBS"), The First
                              Boston Corporation ("FBC") , First Boston
                              Princeton Corp. ("FBPC "), and First Boston
                              Technologies, Inc. ("FBTI" ), with amendment
                              thereto (Exhibit 10.25 to the Company's 
                              Registration Statement on Form S-1, No. 33-92050)
 
                    10.24     Stockholders Agreement, dated March 7, 1990,
                              among the Company, FBS and IBM, with amendment
                              thereto (Exhibit 10.24 to the Company's 
                              Registration Statement on Form S-1, No. 33-92050)
 
                    10.25     Significant Stockholders Agreement, dated 
                              March 8, 1990, among the Company, FBS, IBM and 
                              Eugene F. Bedell (Exhibit 10.25 to the Company's 
                              Registration Statement on Form S-1, No. 33-92050)

                    10.26*    Restricted Stock Purchase Plan of the Company
                              (Exhibit 10.26 to the Company's Registration
                              Statement on Form S-1, No. 33-92050)
 
                    10.27*    Form of Restricted Stock Purchase Agreement
                              (Exhibit 10.27 to the Company's Registration
                              Statement on Form S-1, No. 33-92050)
 
                    10.28*    Stock Restriction Agreement, dated March 8, 1990,
                              among the Company, FBS, IBM and the management
                              stockholders named therein, with amendment thereto
                              (Exhibit 10.28 to the Company's Registration
                              Statement on Form S-1, No. 33-92050)
 
                    10.29*    Form of Stock Option and Restricted Stock 
                              Purchase Plan of the Company (Exhibit 2.9 to the 
                              Company's Registration Statement on Form S-1, 
                              No. 33-92050)
 

                                       23
<PAGE>
 
                    10.30*     Form of Stock Option Plan for Non-Employee
                               Directors of the Company (Exhibit 10.30 to the
                               Company's Registration Statement on Form S-1,
                               No. 33-92050)
                               

                    10.31*     Form of Incentive Stock Option Agreement
                               (Exhibit 10.31 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
 

                    10.32      Stock Purchase Agreement dated June 15, 1994
                               among the Company, Welsh, Carson, Anderson &
                               Stowe VI, L.P., WCA Management Corporation,
                               WCAS Information Partners, L.P., CS First Boston
                               Securities Corporation, and International
                               Business Machines Corporation (Exhibit 10.32 to
                               the Company's Registration Statement on Form 
                               S-1, No. 33-92050)


                    10.33      Securities Purchase and Exchange Agreement,
                               dated September 30, 1994, among the Company,
                               WCAS Capital Partners II, L.P., WCA Management
                               Corporation, WCAS Information Partners, L.P.,
                               CS First Boston Securities Corporation, and
                               International Business Machines Corporation
                               (Exhibit 10.33 to the Company's Registration
                               Statement on Form S-1, No. 33-92050)
                               

                    10.34      Software License Agreement between the Company
                               and Banca Commerciale Italiana (Exhibit 10.34 to
                               the Company's Registration Statement on Form S-
                               1, No. 33-92050)


                    10.35      Form of Indemnification Agreement (Exhibit
                               10.35 to the Company's Registration Statement
                               on Form S-1, No. 33-92050).


                    10.36*     First Amendment to Stock Option and Restricted
                               Stock Purchase Plan (Exhibit 10.1 to the 
                               Company's Report on Form 10-Q for the Quarterly 
                               Period Ended June 30, 1995, No. 0-26194)

                    10.37      Lease for additional space at the Company's
                               Cary, N.C. headquarters (Exhibit 10.37 to the
                               Company's Registration Statement on Form S-1,
                               No. 33-92050)
                               

                    10.38      Sublease of space at the Company's Cary, N.C.
                               headquarters (Exhibit 10.38 to the Company's
                               Registration Statement on Form S-1, No. 
                               33-92050)
                               
                    10.39      Credit Agreement and related Promissory Note
                               between Seer Technologies, Inc. and Nations-
                               Bank, N.A. and related Guaranty between the
                               Company and WCAS, all dated July 15, 1996
                               (Exhibit 10.39 to the Quarterly Report on Form
                               10-Q for the period ended June 30, 1996)
 

                    10.40      Second Consolidated Amendment Agreement dated
                               July 19, 1996 between Seer Technologies, Inc.
                               and Nations Bank (Exhibit 10.40 to the Quarterly
                               Report on Form 10-Q for the period ended June 30,
                               1996)

                    10.41      Preferred Stock Purchase Agreement dated August
                               8, 1996, among the Company, WCAS and certain WCAS
                               affiliates named therein (Exhibit 10.41 to the
                               Quarterly Report on Form 10-Q for the period
                               ended June 30, 1996).

                    10.42      Stock Agreement dated August 8, 1996, between the
                               Company and WCAS (Exhibit 10.42 to the Quarterly
                               Report on Form 10-Q for the period ended June 30,
                               1996).

                    10.43*     Employment Agreement, dated August 8, 1996, 
                               between the Company and Thomas A. Wilson.

                                       24
<PAGE>
 
                    10.44      Third Consolidated Agreement dated August 20,
                               1996 between Seer Technologies, Inc. and Nations
                               Bank
                               

                    10.45*     Employment Agreement, dated September 23,
                               1996, between the Company and Steven Dmiszewicki


                    11.1       Statement regarding Computation of Earnings
                               Per Share
 

                    21.1       Subsidiaries
                               

                    23.1       Consent of Coopers & Lybrand L.L.P.

 
                    27.1       Financial Data Schedule
                               

______________
* Management contract or compensatory plan or agreement.

          (b)  Reports on Form 8-K

     The Company filed no Reports on Form 8-K during the period covered by this
Report.

                                       25
<PAGE>
 
                            SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) 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.

                                   SEER TECHNOLOGIES, INC.


                                   By:  /s/ Thomas A. Wilson       
                                      ---------------------------------------
                                        Thomas A. Wilson
                                        President and Chief Executive Officer
                                        

                                   Date:  December 30, 1996


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date:  December 30, 1996           /s/ Robert A. Minicucci       
       ----------------------      ------------------------------------------
                                   Robert A. Minicucci
                                   Chairman of the Board


Date:  December 30, 1996           /s/ Thomas A. Wilson          
       ----------------------      ------------------------------------------
                                   Thomas A. Wilson
                                   President and Chief Executive Officer 
                                   Director


Date:  December 30, 1996           /s/ Steven Dmiszewicki        
       ----------------------      ------------------------------------------
                                   Steven Dmiszewicki
                                   Senior Vice President and Chief Financial 
                                   Officer


Date:  December 30, 1996           /s/ Bruce K. Anderson         
       ----------------------      ------------------------------------------
                                   Bruce K. Anderson
                                   Director


Date:  December 30, 1996           /s/ Frank T. Cary             
       ----------------------      ------------------------------------------
                                   Frank T. Cary
                                   Director


Date:  December 30, 1996           /s/ Anthony J. deNicola       
       ----------------------      ------------------------------------------
                                   Anthony J. deNicola
                                   Director


Date:  December 30, 1996           /s/ George L. McTavish        
       ----------------------      ------------------------------------------
                                   George L. McTavish
                                   Director

                                       26
<PAGE>
 
                            SEER TECHNOLOGIES, INC.

                         INDEX TO FINANCIAL STATEMENTS

                              September 30, 1996
                                                                  Page No.

Report of Independent Accountants ..............................    F-2 

Financial Statements

Consolidated Balance Sheets.....................................    F-3
Consolidated Statements of Operations...........................    F-4
Consolidated Statements of Changes in Stockholders' Equity 
  (Capital Deficiency) .........................................    F-5
Consolidated Statements of Cash Flows...........................    F-6
Notes to Consolidated Financial Statements......................    F-7

                                      F-1
<PAGE>
 
                 REPORT OF INDEPENDENT ACCOUNTANTS

                         _________________

To the Stockholders of Seer
 Technologies, Inc.

     We have audited the accompanying consolidated balance sheets of Seer
Technologies, Inc. as of September 30, 1996 and 1995, and the related
consolidated statements of operations, changes in stockholders' equity (capital
deficiency), and cash flows for each of the three years in the period ended
September 30, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Seer
Technologies, Inc. as of September 30, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended September 30, 1996 in conformity with generally accepted accounting
principles.

                                   /s/ COOPERS & LYBRAND L.L.P.

Washington, D.C.
November 7, 1996

                                      F-2
<PAGE>
 
                            SEER TECHNOLOGIES, INC.

                          CONSOLIDATED BALANCE SHEETS
              (in thousands, except share and per share amounts)

<TABLE> 
<CAPTION> 
                                                   September 30,  September 30,
                                                       1996           1995
                                                   -------------  -------------
<S>                                                <C>            <C> 
ASSETS
  Cash and cash equivalents                           $   377        $13,650
  Trade accounts receivable, less allowance
    for doubtful accounts                              42,938         42,949
  Prepaid expenses and other current assets             4,116          4,071
  Deferred income taxes                                 4,621            964
                                                      -------        -------
      Total current assets                             52,052         61,634

  Trade accounts receivable, net                        3,803          5,004
  Property and equipment, net                           6,459          6,828
  Capitalized software costs, net                       3,057          2,425
  Deferred income taxes, net of valuation allowance    12,971             51
  Other assets                                            462            502
                                                      -------        -------
      TOTAL ASSETS                                    $78,804        $76,444
                                                      =======        =======

LIABILITIES AND STOCKHOLDERS' EQUITY
  Notes payable, due on demand                        $14,379        $     -
  Accounts payable                                      3,487          2,976
  Accrued expenses:
    Compensation                                        3,920          5,553
    Commissions                                         4,401          5,312
    Other                                               8,463          4,179
  Deferred revenue                                     10,853          7,134
  Income taxes payable                                  2,586          2,393
                                                      -------        -------
      Total current liabilities                        48,089         27,547

  Deferred revenue                                        662            459

  Commitments and contingencies (Notes 17 and 18)

  Stockholders' equity:
    Series A convertible preferred stock, $0.01
      par value, 2,094,143 and 0 shares authorized,
      issued and outstanding at September 30, 1996
      and 1995, respectively; $5.969 per share
      liquidation preference (aggregate liquidation
      value of $12,500,000)                                21              -
    Common stock, $0.01 par value, 20,000,000 shares
      authorized in 1996 and 1995, respectively;
      11,612,107 and 11,351,948 shares issued and
      outstanding at September 30, 1996 and 1995,
      respectively                                        116            114
    Additional paid-in capital - preferred stock       12,281              -
    Additional paid-in capital - common stock          57,544         56,541
    Cumulative translation adjustments                   (505)          (395)
    Accumulated deficit                               (39,404)        (7,822)
                                                      -------        -------
      Total stockholders' equity                       30,053         48,438
                                                      -------        -------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $78,804        $76,444
                                                      =======        =======
</TABLE> 

              The accompanying notes are an integral part of the 
                      consolidated financial statements.

                                      F-3

<PAGE>
 

                            SEER TECHNOLOGIES, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                                For the Years Ended          
                                                                                                   September 30,             
                                                                                      1996              1995             1994 
                                                                                    --------          --------         --------
<S>                                                                                 <C>               <C>               <C>
Revenue:
    Software products                                                                $28,795          $ 55,419          $37,815
    Maintenance                                                                       13,182            11,142            7,312
    Services                                                                          54,966            50,619           37,566 
                                                                                    --------          --------          -------
        Total operating revenue                                                       96,943           117,180           82,693

Cost of revenue:
    Software products                                                                  1,562               568              295
    Maintenance                                                                        8,303             7,471            4,220
    Services                                                                          48,469            36,599           33,277
                                                                                    --------          --------          -------
        Total cost of revenue                                                         58,334            44,638           37,792

Gross profit                                                                          38,609            72,542           44,901

Operating expenses:
    Sales and marketing                                                               44,054            39,405           23,127
    Research and product development                                                  16,789            14,523           11,765
    General and administrative                                                        19,878             9,360            6,558
    Restructuring charges                                                              3,000                 -               -
                                                                                    --------          --------          -------
        Total operating expenses                                                      83,721            63,288           41,450
                                                                                    --------          --------          -------
        Income (loss) from operations                                                (45,112)            9,254            3,451

Other income (expense):
    Interest income                                                                      648               254               32
    Interest expense                                                                    (802)             (701)             (88)
                                                                                    --------          --------          -------
    Other expense, net                                                                  (154)             (447)             (56)
                                                                                    --------          --------          -------
Income (loss) before provision for income taxes                                      (45,266)            8,807            3,395

Income tax provision (benefit)                                                       (13,684)            3,655            1,034
                                                                                    --------          --------          -------
        Net income (loss)                                                           $(31,582)         $  5,152          $ 2,361
                                                                                    ========          ========          =======
Primary earnings (loss) per common and common equivalent share                      $  (2.76)         $   0.45          $  0.21
                                                                                    ========          ========          =======
Weighted average common and common equivalent shares outstanding                      11,445            11,507           10,986 
                                                                                    ========          ========          =======
</TABLE>

  The accompanying notes are an integral part of the consolidated financial 
                                  statements.

                                      F-4


<PAGE>
 
                            SEER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
                   (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                           Series A           Series B          Series C
                                                       Preferred Stock     Preferred Stock   Preferred Stock    Common Stock
                                                      -----------------  ------------------  ---------------  ------------------
                                                        Shares   Amount    Shares    Amount   Shares  Amount    Shares    Amount
                                                      ---------  ------  ----------  ------  -------  ------  ----------  ------
<S>                                                   <C>        <C>     <C>         <C>     <C>      <C>     <C>         <C>
Balance at September 30, 1993                                      $ -                 $  -             $ -    1,473,158   $ 15

  Issuance of common shares
  Issuance of restricted stock grants                                                                            118,815      1
  Corporation expense for restricted stock grants
  Accretion of Series A preferred stock to
    mandatory redemption account
  Recapitalization (Note 6)                                               2,384,615      24   98,816      1
  Cumulative translation adjustment
  Net income
                                                      ---------    ---   ----------    ----  -------    ---   ----------   ----

Balance at September 30, 1994                                             2,384,615      24   98,816      1    1,591,973     16

  Issuance of common shares                                                                                    2,970,987     30
  Repurchase of common shares                                                                                     (2,486)
  Accretion of Senior redeemable preferred stock
    to mandatory redemption account
  Senior redeemable preferred stock dividends earned
  Conversion of Series B preferred stock to
    common shares                                                        (2,384,615)    (24) (98,816)    (1)   6,593,842     66
  Conversion of Series C preferred stock to
    common shares                                                                                                197,632      2
  Cumulative translation adjustment
  Net income
                                                      ---------    ---   ----------    ----  -------    ---   ----------   ----

Balance at September 30, 1995                                                                                 11,351,948    114

  Issuance of convertible preferred shares            2,094,143     21
  Issuance of common shares                                                                                      260,159      2
  Cumulative translation adjustment
  Net loss
                                                      ---------    ---   ----------    ----  -------    ---   ----------   ----
Balance at September 30, 1996                         2,094,143    $21            -    $  -        -    $ -   11,612,107   $116
                                                      =========    ===   ==========    ====  =======    ===   ==========   ====
</TABLE>

<TABLE> 
<CAPTION> 
                                                                                                                       Total
                                                    Additional  Additional                                          Stockholders'
                                                     Paid-in      Paid-in    Cumulative                                Equity/
                                                     Capital      Capital   Translation  Accumulated    Unearned      (Capital
                                                    Preferred     Common    Adjustments    Deficit    Compensation   Deficiency)
                                                    ----------  ----------  -----------  -----------  ------------  -------------
<S>                                                 <C>         <C>         <C>          <C>          <C>           <C> 
Balance at September 30, 1993                         $     -     $     -      $(112)      $(12,837)      $   -       $(12,934)

  Issuance of common shares                                            64                                                   64
  Issuance of restricted stock grants                                 752                                  (654)            99
  Corporation expense for restricted stock grants                                                           654            654
  Accretion of Series A preferred stock to
    mandatory redemption amount                                      (816)                   (2,498)                    (3,314)
  Recapitalization (Note 6)                                        10,969                                               10,994
  Cumulative translation adjustment                                              (20)                                      (20)
  Net income                                                                                  2,361                      2,361
                                                       -------    -------      -----       --------       -----       --------
Balance at September 30, 1994                                      10,969       (132)       (12,974)                    (2,096)

  Issuance of common shares                                        48,787                                               48,797
  Repurchase of common shares                                         (22)                                                 (22)
  Accretion of Senior redeemable preferred stock to
    mandatory redemption account                                   (1,940)                                              (1,940)
  Senior redeemable preferred stock dividends earned               (1,190)                                              (1,190)
  Conversion of Series B preferred stock to
    common shares                                                     (42)                                                  (1)
  Conversion of Series C preferred stock to
    common shares                                                      (1)                                                   1
  Cumulative translation adjustment                                             (263)                                     (263)
  Net income                                                                                  5,152                      5,152
                                                       -------    -------      -----       --------       -----       --------

Balance at September 30, 1995                                      56,541       (395)        (7,822)                    48,438

  Issuance of convertible preferred shares              12,281                                                          12,302
  Issuance of common shares                                         1,003                                                1,005
  Cumulative translation adjustment                                             (110)                                     (110)
  Net income                                                                                (31,582)                   (31,582)
                                                       -------    -------      -----       --------       -----       --------
Balance at September 30, 1996                          $12,281    $57,544      $(505)      $(39,404)      $   -       $ 30,053
                                                       =======    =======      =====       ========       =====       ========
</TABLE> 


              The accompanying notes are an integral part of the
                      consolidated financial statements.

                                      F-5



<PAGE>
 
                            SEER TECHNOLOGIES, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
<TABLE> 
<CAPTION> 
                                                               FOR THE YEARS ENDED
                                                                   SEPTEMBER 30,
                                                          1996        1995       1994
                                                      ----------   ----------  ---------
<S>                                                   <C>           <C>        <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                   $  (31,582)  $   5,152   $   2,361
  Adjustments to reconcile net income (loss) to net             
    cash used in operating activities:                          
    Depreciation and amortization                          4,475       2,740       2,212
    Deferred income taxes                                (16,577)        145      (1,160)
    Provision for uncollectible accounts                  10,158         773           -
    Compensation expense for restricted stock grants           -           -         753
    Changes in assets and liabilities:                          
      Trade accounts receivable                           (9,043)     (23,771)   (10,229)
      Prepaid expenses and other assets                       28       (2,389)      (566)
      Accounts payable and accrued expenses                2,444        5,635      5,212
      Deferred revenue                                     3,922         (492)       772
                                                      ----------   ----------  ---------
        Net cash used in operating activities            (36,175)     (12,207)      (645)
                                                                
                                                                
CASH FLOWS FROM INVESTING ACTIVITIES:                           
  Purchases of property and equipment                     (2,768)      (4,239)    (3,186)
  Capitalization of software development costs            (1,600)        (929)    (1,100)
                                                      ----------   ----------  ---------
        Net cash used in investing activities             (4,368)      (5,168)    (4,286)
                                                                
                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:                           
  Issuance of common shares                                  602       48,797         64
  Issuance of preferred shares                            12,500            -          -
  Preferred stock issuance costs                            (198)           -          -
  Repurchase of common shares                                  -          (22)         -
  Preferred stock dividend                                     -       (1,190)         -
  Redemption of Senior Redeemable Preferred Stock              -      (15,135)         -
  Net borrowings under lines of credit                    14,379       (2,700)     2,700
                                                      ----------   ----------  ---------
        Net cash provided by financing activities         27,283       29,750      2,764
                                                                
                                                                
Effect of exchange rate changes on cash                      (13)          (3)       (20)
                                                      ----------   ----------  ---------
        Net increase (decrease) in cash and              
          cash equivalents                               (13,273)      12,372     (2,187)
                                                                
Cash and cash equivalents:                                      
  Beginning of period                                     13,650        1,278      3,465
                                                      ----------   ----------  ---------
                                                                
  End of period                                       $      377   $  13,650   $   1,278
                                                      ==========   ==========  =========
Supplemental disclosures of cash flow information:              
  Cash paid during the period for:
    Income taxes                                      $    1,596   $   1,549   $   2,161
                                                      ==========   ==========  =========
    Interest                                          $      846   $     701   $      88
                                                      ==========   ==========  =========
</TABLE> 

  Noncash Financing Activities:

    During 1996, the Company issued 75,000 shares of its common stock to Welsh,
    Carson, Anderson, & Stowe IV ("WCAS") in exchange for WCAS's guaranty of up
    to $12,500 of the Company's line of credit. The market value of the capital
    stock on the date of issuance, approximately $403, was capitalized and is
    being amortized over the life of the guaranty. Approximately $67 of the
    guaranty-related cost was amortized during the fiscal year ended September
    30, 1996.

The accompanying notes are an integral part of the consolidated financial 
                                  statements.

                                      F-6

<PAGE>
 
                            SEER TECHNOLOGIES, INC.

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
            (dollars in thousands, except share and per share data)


Note 1.   Summary of Operations and Significant Accounting Policies

Operations

SEER Technologies, Inc. ("SEER" or the "Company") designs, develops, markets and
supports software products and related services that enable its customers to
create, distribute and manage large-scale mission-critical information
processing applications that utilize client/server technologies. SEER's
application development tools, related software products and consulting services
reduce the time, cost and risk involved in developing, deploying and maintaining
complex client/server applications and enable efficient integration of those
applications with the customer's existing systems.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All significant
intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency Translation

The assets and liabilities of foreign subsidiaries are translated to U.S.
dollars at the current exchange rate as of the balance sheet date. The resulting
translation adjustment is recorded as a separate component of stockholders'
equity. Statement of operations items are translated at average rates of
exchange during each reporting period. Transaction gains and losses are included
in current operations. Realized and unrealized net losses (gains) for
transactions denominated in foreign currencies were $556, $264, and ($170),
respectively, for the fiscal years ended September 30, 1996, 1995, and 1994.

Revenue Recognition

Revenue from the non-exclusive licensing of existing software products is
recognized when the software is accepted and delivered or installed by the
customer in accordance with the terms of the contract and only if no significant
vendor obligations remain and collection of the resulting receivables is deemed
probable. For license agreements where maintenance is bundled with the software
license for a time period greater than three months, an appropriate portion of
the license fees is deferred and amortized over the initial maintenance period.

Revenue from recurring maintenance contracts is recognized ratably over the
maintenance contract period, which is typically twelve months. Maintenance
revenue which is not yet earned is included in deferred revenue.

Revenue from consulting and training services is recognized as services are
performed.

Proceeds from product development contracts are recorded as deferred revenue
when collected and the revenue is recognized as the development work is
performed.

The Company typically does not grant to its customers a contractual right to
return software products. Accordingly, no provision for estimated returns is
recorded at the time of sale. When approved by management, however, the Company
will accept returns of certain software products and will provide an allowance
for those specific transactions.

                                      F-7
<PAGE>
 
Cost of Revenue

The primary components of the Company's cost of revenue for its software
products are packaging and distribution costs and software amortization. The
primary components of the Company's cost of revenue for maintenance are payments
under various distribution and marketing agreements with IBM and customer
support. A portion of the costs related to customer support are deferred and
recognized as the service is provided. The primary component of the Company's
cost of revenue for services is compensation expense. Consulting and training
services revenue and the cost of such revenue includes reimbursable client-
related expenses.

Cash and Cash Equivalents

Cash and cash equivalents includes all cash balances and highly liquid
investments with a maturity of three months or less from the date of purchase.
For these instruments, the carrying amount is a reasonable estimate of fair
value. The Company places substantially all cash and cash equivalents with
various financial institutions in both the United States and several foreign
countries. At times, such cash and cash equivalents may be in excess of FDIC
insurance limits.

Property and Equipment

Property and equipment is stated at cost and depreciated using the straight-line
method over the estimated useful lives of the related assets as follows:

  Leasehold improvements           The lesser of the lease term
                                   or estimated useful life
  Furniture and fixtures           3 to 5 years
  Office equipment                 3 years
  Computer equipment               4 years

Expenditures for repairs and maintenance are charged to expense as incurred. The
cost and related accumulated depreciation of property and equipment are removed
from the accounts upon retirement or other disposition and any resulting gain or
loss is reflected in operations.

Software Costs

The Company capitalizes certain software costs after technological feasibility
of the product has been established. The establishment of technological
feasibility and the ongoing assessment of recoverability of capitalized software
development costs requires considerable judgment by management with respect to
certain external factors, including, but not limited to, technological
feasibility, anticipated future gross revenue, estimated economic life and
changes in software and hardware technologies.

All capitalized software costs are amortized over related sales on a product-by-
product basis at the greater of the amount computed using (a) the ratio of
current gross revenues for a product to the total of current and anticipated
future gross revenues or (b) the straight-line method over the remaining
estimated economic life of the product. Generally, an original estimated
economic life of three years is assigned to capitalized software costs, once the
product is available for general release to customers. Costs incurred prior to
the establishment of technological feasibility are charged to research and
development expense.

Research and Product Development

Research and product development costs are expensed as incurred. 

                                      F-8
<PAGE>
 
Forward Exchange Contracts

The Company conducts its business in various foreign currencies. As a result, it
is subject to the transaction exposures that arise from foreign exchange rate
movements between the dates that foreign currency transactions are recorded and
the date they are consummated. The Company enters into foreign exchange forward
contracts to hedge the effect of fluctuating foreign currencies on its results
of operations (see Note 12). Gains and losses associated with exchange rate
fluctuations on forward contracts are recorded currently as income or loss as
they offset corresponding gains and losses on the foreign currency denominated
assets or liabilities being hedged. The gains and losses are computed by
multiplying the foreign currency amounts of the forward contracts by the
difference between the spot rate at the balance sheet date and the spot rate at
the date of inception of the forward contracts. The costs of the forward
contracts are recorded as expense over the lives of the contracts.

Income Taxes

The provision for income taxes includes United States federal, state and foreign
income taxes, each currently payable and deferred, as determined in accordance
with the provisions of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes". This statement requires that all deferred tax
asset and liability balances be determined by application to temporary
differences of the tax rate expected to be in effect when taxes will become
payable or receivable. Temporary differences are differences between the tax
basis of assets and liabilities and their reported amounts in the financial
statements that will result in taxable or deductible amounts in future years.
The Company's temporary differences consist primarily of accelerated
depreciation, deferred revenue and capitalized software costs.

Earnings Per Share

Primary earnings per share is based on the weighted average number of common
shares and common share equivalents outstanding during the period. The Series B
and Series C convertible preferred shares issued that were automatically
converted upon the effective date of the public offering have been included as a
common share equivalent for the years ended September 30, 1995 and 1994. Stock
options issued to employees during the twelve months immediately preceding the
initial filing date of the public offering have been included in the calculation
for the years ended September 30, 1995 and 1994 as if they were outstanding for
1995 and 1994, using the treasury stock method. The pro forma per share data for
1995 and 1994 is presented giving effect to the number of shares whose proceeds
would be necessary to pay the redemption value and accrued dividends on the
Senior Redeemable Preferred Stock on the effective date of the public offering.
All common stock equivalents are excluded from the primary earnings per share
calculation for the fiscal year ended September 30, 1996 since their inclusion
would be antidilutive. Presentation of fully diluted earnings per share is not
required for fiscal years 1996, 1995, or 1994.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires 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 statements and
the reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from these estimates.

Reclassifications

Certain prior year amounts in the accompanying financial statements have been
reclassified to conform to the 1996 presentation. Such reclassifications had no
effect on previously reported net income or stockholders' equity.

                                      F-9
<PAGE>
 
Note 2.   Property and Equipment

Property and equipment consists of the following at September 30:


                                                    1996       1995
                                                 ---------   ---------
       Computer equipment                        $  12,137   $  10,302  
       Leasehold improvements                        2,112       1,857  
       Office equipment                              1,257       1,014  
       Furniture and fixtures                        2,529       2,108  
                                                 ---------   ---------
                                                    18,035      15,281  
                                                                        
       Less accumulated depreciation and 
       amortization                                (11,576)     (8,453) 
                                                 ---------   ---------
                                                 $   6,459   $   6,828  
                                                 =========   =========

Depreciation expense was $3,137, $2,419, and $2,003 for the fiscal years ended
September 30, 1996, 1995, and 1994, respectively.


Note 3.   Capitalized Software Costs

For the fiscal years ended September 30, 1996, 1995 and 1994, the Company
capitalized $1,600, $929, and $1,100, respectively, of internal costs related to
developing software for sale. During the fiscal years ended September 30, 1996,
1995 and 1994, the Company recognized $968, $309, and $195, respectively, of
expense related to the amortization of these costs, which is recorded in cost of
revenues, software products, in the Consolidated Statements of Operations.
Accumulated amortization of capitalized software costs is $1,591, $623, and $314
at September 30, 1996, 1995 and 1994, respectively.

Note 4.   Accounts Receivable


Trade accounts receivable consists of the following at September 30: 


                                                    1996        1995
                                                 ---------   ---------
    Current trade accounts receivable            $  52,693   $  43,599 
    Less:  Allowance for doubtful accounts          (9,351)       (650)
           Unamortized discount                       (404)            
                                                 ---------   ---------
                                                 $  42,938   $  42,949   
                                                 =========   =========

    Noncurrent trade accounts receivable         $   4,185   $   5,590 
    Less:  Unamortized discount                       (382)       (586)
                                                 ---------   ---------
                                                 $   3,803   $   5,004  
                                                 =========   =========

All noncurrent receivables were unbilled at September 30, 1996. Approximately
$4,830 of current trade receivables were unbilled at September 30, 1996. There
were no unbilled accounts receivable at September 30, 1995.

Discounts on receivables with payment terms in excess of one year were
calculated based on an imputed interest rate of 10% and 7.4% for fiscal years
ended September 30, 1996 and 1995, respectively.

The provision for uncollectible amounts was $10,158 and $773 for the years ended
September 30, 1996 and 1995, respectively. Write-offs of accounts receivable
were $1,457 and $123 for the years ended September 30, 1996 and 1995,
respectively. There were no write-offs or provisions for uncollectible amounts
during the year ended September 30, 1994.

                                      F-10
<PAGE>
 
Note 5.   Credit Facilities

At September 30, 1996, the Company maintained two credit facilities (the
"Revolving Facility" and the "Guaranteed Facility") which provide for combined
borrowings of up to $32,500 for working capital purposes based on the Company's
eligible accounts receivable, as defined in the loan agreements. The Revolving
Facility allows for borrowings of up to $20,000, bears interest at the London
Interbank Offered Rate ("LIBOR") plus 3.0%, and is collateralized by the
Company's accounts receivable and other assets. The Guaranteed Facility allows
for borrowings of up to $12,500 and bears interest at LIBOR plus 1.25% or the
higher of .5% plus the prime rate or the rate quoted by the Federal Reserve,
depending on the type of advance, as defined in the loan agreement. The
Guaranteed Facility is guaranteed by the Company's principal stockholder, Welsh,
Carson, Anderson, & Stowe VI, L.P. ("WCAS"), pursuant to an agreement with the
Company (the "Guaranty Agreement"). Borrowings are made under the facilities
based upon a ratio, defined in the loan agreements, which varies with the
Company's tangible net worth. The facilities require the Company's compliance
with various covenants, which among other things, require the Company to
maintain a minimum tangible net worth and limit the amount of dividends and
other payments by the Company. As of September 30, 1996, the Company had
outstanding borrowings of $10,579 under the Revolving Facility and $3,800 under
the Guaranteed Facility. The interest rates for the Revolving Facility and the
Guaranteed Facility were 8.5% and 8.25%, respectively, at September 30, 1996.
The facilities expire on September 30, 1997. It is the Company's intention to
renegotiate and extend the credit facilities; however, there can be no assurance
that the credit facilities can be extended on acceptable terms.

In connection with the Guaranty Agreement, the Company issued 75,000 shares of
its common stock to WCAS. The market value of the capital stock on the date of
issuance, approximately $403, was capitalized and is being amortized over the
life of the guaranty. Approximately $67 of the guaranty-related cost was
amortized during the fiscal year ended September 30, 1996.

Additionally, the Company has a line of credit of $3,500 available from the
lender to enter foreign exchange contracts with the lender. The aggregate
notional amount of foreign exchange contracts outstanding from the lender cannot
exceed $23,333. At September 30, 1996 the aggregate notional amount of foreign
exchange contracts outstanding from the lender was $22,651.

The Company believes that existing cash on hand and additional borrowings under
its lines of credit will be sufficient to finance its operations and expected
working capital and capital expenditure requirements for at least the next
twelve months. Thereafter, the Company's liquidity will depend upon the results
of future operations, as well as available sources of financing. There can be no
assurance that the Company will be able to meet its loan covenants, achieve its
operating plan or, if needed, obtain additional financing on acceptable terms,
and the failure to do so may have an adverse impact on the Company's business
and operations.


Note 6.   Recapitalization and Initial Public Offering

During 1994, the Company effected a plan of recapitalization ("the
"Recapitalization") which was completed in two phases.

The first phase was completed in July 1994 when a group of investors ("the
Investment Group") purchased 80% (2,728,292 shares) of the Company's outstanding
Series A mandatorily redeemable cumulative convertible preferred stock ("Series
A Preferred Stock") from International Business Machines Corporation ("IBM") and
CS First Boston Securities Corporation ("FBS"). In addition, the Investment
Group purchased 91,491 shares of common stock from selling stockholders.

The second phase was completed on September 30, 1994 in a series of transactions
which resulted in the issuance of newly authorized classes of preferred stock
and the retirement of the Series A Preferred Stock, among other things. The
second phase transactions were as follows:

 .  The Investment Group purchased 572,892 additional shares of Series A
   Preferred Stock from IBM and FBS.

 .  The Company purchased 346,182 shares of common stock from selling 
   stockholders and retired these shares.

                                      F-11
<PAGE>
 
 .  The Investment Group exchanged 916,569 shares of Series A Preferred Stock and
   91,491 shares of common stock for 151,350 shares of newly issued Senior
   Redeemable Preferred Stock and 446,189 shares of common stock.

 .  The Investment Group exchanged its 2,384,615 remaining shares of Series A
   Preferred Stock for newly issued Series B Preferred Stock.

 .  IBM and FBS exchanged their remaining shares of Series A Preferred Stock
   (98,816 shares) for newly issued Series C Preferred Stock. In conjunction
   with the Recapitalization, the Series A Preferred Stock was retired and
   canceled. No further shares of Series A Preferred Stock are authorized for
   issuance.


In July 1995, the Company completed its initial public offering of 3,093,397
shares of common stock (the "Common Stock"), of which 2,953,487 shares were sold
by the Company and 139,910 shares were sold by selling stockholders. The Company
received net proceeds from the initial public offering of $49,441. A series of
transactions occurred in conjunction with the initial public offering:

 .  Issuance of 6,593,842 shares of Common Stock upon the automatic conversion
   and retirement of all outstanding Series B Convertible Preferred Stock
   (2.76516 common shares for each Series B share).

 .  Issuance of 197,632 shares of Common Stock upon the automatic conversion and
   retirement of all outstanding Series C Convertible Preferred Stock (2 common
   shares for each Series C share).

 .  Payment of the accrued Senior Redeemable Preferred Stock Dividend of $417;
   and accretion and redemption of the Senior Redeemable Preferred Stock at a
   cost of $15,135.

 .  Repayment of $15,103, representing all principal and accrued interest
   outstanding under the Company's revolving credit facility agreement with a
   commercial bank.

Note 7.   Convertible Preferred Stock

During August 1996, the Company sold 2,094,143 shares of its newly authorized
Series A Convertible Preferred Stock (the "Preferred Stock") to WCAS and certain
WCAS affiliates, resulting in gross proceeds to the Company of $12,500. The net
proceeds from the sale of the Preferred Stock were used for general corporate
purposes. Approximately $198 of expenses were incurred in connection with the
stock issuance and have been recorded in the Consolidated Statement of
Stockholders' Equity (Capital Deficiency) as an offset to the Preferred Stock
proceeds. The sale of the Preferred Stock was made in a private transaction
exempt from the registration requirements of the federal securities laws.

Each share of Preferred Stock may be converted at any time at the option of the
holder into shares of Common Stock at a conversion rate of one common share for
each share of Preferred Stock, subject to adjustment upon the occurrence of
certain events. The Preferred Stock is not entitled to receive dividends in any
fixed amount but will receive dividends on an as converted basis in the event
that a dividend is paid on the Common Stock. The Preferred Stock will rank
senior in right of payment to the Common Stock. In the event of any liquidation,
dissolution or winding up of the Company, holders of Preferred Stock will be
entitled to receive a liquidation preference of $5.969 per share before payment
is made or assets are distributed to holders of the Common Stock. In addition,
the holders of Preferred Stock are entitled to vote together with the holders of
Common Stock on all matters to be voted on by the stockholders of the Company.

The Company is subject to certain restrictions while shares of Preferred Stock
remain outstanding, including restrictions on the Company's ability to declare
dividends, purchase or redeem any outstanding shares of its Common Stock, create
or authorize the creation of additional classes of capital stock of the Company,
increase the authorized amount of Preferred Stock, create or authorize the
creation of any securities convertible into shares of Preferred Stock or any
other class of capital stock of the Company.

                                      F-12
<PAGE>
 
Note 8.   Stock Option and Restricted Stock Purchase Plans

Prior to September 30, 1994, the Company had a restricted stock purchase plan
for employees under which the sale of 1,700,000 shares of its common stock had
been authorized. Certain employees of the Company purchased common stock at its
fair value on the date of grant. Fair value was determined by the Company's
management and Board of Directors. The shares were restricted as to the right of
sale and other disposition until certain vesting requirements were met over a
period of four years (certain shares were subject to acceleration based on
achievement of certain performance objectives) from the date of grant issuance.
In conjunction with the Recapitalization (Note 6), all shares of common stock
issued under this plan were fully vested. This restricted stock purchase plan
was terminated at September 30, 1994.

In connection with the Recapitalization, the Company adopted the Stock Option
and Restricted Stock Purchase Plan pursuant to which certain employees and
officers of the Company have been or will be granted stock options to acquire up
to a maximum of 2,400,000 shares of the Company's common stock. Prior to October
1, 1996, options granted under this plan vested based on performance in part at
the end of each fiscal year from 1995 to 1998, as defined in the plan. Effective
October 1, 1996, the vesting provisions were amended so that the options vest in
one-third increments on October 1 each subsequent fiscal year.

During the fiscal year ended September 30, 1995, the Company adopted the Stock
Option Plan for Non-Employee Directors, pursuant to which non-employee directors
can acquire up to 200,000 shares of the Company's common stock, with a maximum
of 10,000 options available per non-employee director. The options vest in one-
third increments on each of the first through third anniversaries of the grant
date.

At September 30, 1995, exercise prices for all options issued pursuant to these
plans ranged from $3.25 to $18.00 per share. During the fiscal year ended
September 30, 1996, the Company exchanged all options with exercise prices of
$7.50 or more per share for options with an exercise price of $6.38 per share.
Subsequent to this exchange, stock options were issued with an exercise price of
$18 per share.

Activity related to these plans for the fiscal years ending September 30, 1996
and 1995 is as follows:

                                                   1996         1995
                                                ---------    ---------
    Outstanding at beginning of year            2,147,650            - 
    Granted                                       735,450    2,219,000
    Exercised                                    (185,159)           -  
    Forfeited                                    (581,696)     (71,350)
                                                ---------    ---------
    Outstanding at end of year                  2,116,245    2,147,650
                                                =========    =========

As defined in the plan documents, 184,348 shares were vested or exercisable at
September 30, 1996. Exercise prices of the outstanding options at September 30,
1996 range from $3.25 to $18 per share.


Note 9.   Related Party Transactions

Prior to the Recapitalization discussed in Note 6, IBM and FBS were majority
shareholders of the Company.

The Company had purchases of $357 from IBM for the year ended September 30,
1994. The Company provided products and related services to IBM, which acted as
distributor of the Company's product (see Note 10 for further discussion),
amounting to approximately $53,306 of the Company's revenues for the year ended
September 30, 1994.

The Company was paid $2,369 for services provided to FBS for the year ended
September 30, 1994.

Effective with the Recapitalization, IBM and FBS held only a nominal equity
interest in the Company. Accordingly, effective October 1, 1994, transactions
with these parties are no longer considered related party transactions.
Effective with the Initial Public Offering in June, 1995, FBS sold its interest
in the Company.

                                      F-13
<PAGE>
 
Note 10.   Significant Customers and Concentration of Credit Risk

No one customer accounted for more than 10% of operating revenue for the fiscal
year ended September 30, 1996. During the fiscal years ended September 30, 1995
and 1994 there were sales to one major customer that exceeded 10% of operating
revenue. Revenues from this customer, Banca Commerciale Italiana, were $20,457
and $8,831 or 17% and 11% of revenues for the years ended September 30, 1995 and
1994, respectively.

The Company has entered into several marketing and distribution agreements with
IBM throughout the world. Transactions resulting from these agreements are as
follows for the fiscal years ended September 30:


                                                    1996      1995      1994
                                                  --------  --------  -------- 
      Expenses incurred                           $  4,907  $  4,375  $  3,470
      Revenues generated                          $ 62,835  $ 81,862  $ 53,306
      Percentage of revenues                            65%       70%       65%
      Percentage of outstanding
         receivables                                    70%       70%       60%

As of September 30, 1996 and 1995, the Company had outstanding trade accounts
receivable primarily from 128 and 103 customers, respectively. It is the policy
of the Company to closely monitor all accounts receivable and to record a
provision for uncollectible accounts when the uncollectible amounts are
estimable. Generally, no collateral is required.

Note 11.   Foreign and Domestic Operations and Export Sales


The following table presents a summary of operations by geographic region for
the fiscal years ended September 30:


Revenue

                                              1996        1995       1994
                                           ---------   ---------   --------
      United Kingdom                       $  28,512   $  20,970   $ 12,515
      Ireland                                  8,207      11,013          -
      The Netherlands                          3,056       6,223        661
      Italy                                    5,805       3,847      2,583
      Other                                   20,414      12,146      4,532
                                           ---------   ---------   --------
      Total                                   65,994      54,199     20,291
      Intercompany eliminations              (54,735)    (38,009)   (20,291)
                                           ---------   ---------   --------
      Total foreign revenue                   11,259      16,190          -
      Domestic revenue                        85,684     100,990     82,693
                                           ---------   ---------   --------
           Total revenue                   $  96,943   $ 117,180   $ 82,693
                                           =========   =========   ========


Operating income (loss)

                                              1996         1995       1994
                                            --------      ------     ------
      United Kingdom                        $  1,388      $1,238     $  554
      Ireland                                    253         345          -
      The Netherlands                            230         428          -
      Italy                                      442         277        192
      Other                                      289         316        352
                                            --------      ------     ------
      Total foreign operating income           2,602       2,604      1,098
      Domestic operating income (loss)       (47,868)      6,203      2,297
                                            --------      ------     ------
           Total operating income (loss)    $(45,266)     $8,807     $3,395
                                            ========      ======     ======

                                      F-14

<PAGE>
 
Identifiable Assets

                                                   1996     1995     1994
                                                 -------  -------  -------
      United Kingdom                             $ 5,894  $ 4,696  $ 2,276
      Ireland                                      1,453      694        -
      The Netherlands                              1,181      705      241
      Italy                                        2,211    1,004      703
      Other                                        4,557    3,008      678
                                                 -------  -------  -------
      Total                                       15,296   10,107    3,898
      Intercompany eliminations                     (376)  (3,009)  (1,736)
                                                 -------  -------  -------
      Total foreign identifiable assets           14,920    7,098    2,162
      Domestic assets                             63,884   69,346   35,201
                                                 -------  -------  -------
           Total assets                          $78,804  $76,444  $37,363
                                                 =======  =======  =======


The Company's foreign operations are reimbursed by the Company for their costs
plus an appropriate mark-up for profit. Operating income consists of revenues
less operating expenses and net interest and does not include income taxes.

Export sales for the fiscal years ended September 30, 1996, 1995, and 1994 were
$55,382, $84,965, and $52,095, respectively.


Note 12.   Foreign Currencies and Forward Exchange Contracts

At September 30, 1996, the Company had approximately $789 and $30,843 U.S.
dollar equivalent cash and trade receivable balances, respectively, denominated
in foreign currencies. At September 30, 1995, the Company had approximately $566
and $24,462 U.S. dollar equivalent cash and trade receivable balances,
respectively, denominated in foreign currencies.

The more significant trade accounts receivable denominated in foreign currencies
as a percentage of total trade accounts receivable were as follows:


                                                 1996     1995
                                                 ----     ----
                 Pound Sterling                  17.3%    16.9%
                 Dutch Guilder                    0.4%     8.6%
                 Danish Krona                     1.2%     8.5%
                 Norwegian Krone                  1.0%     5.0%
                 Deutsche Mark                    9.5%     3.0%
                 Italian Lira                    20.7%     2.0%

                                      F-15

<PAGE>
 
The Company hedges the transaction exposures that arise from foreign exchange
rate movements between dates that foreign currency transactions are recorded and
the date they are consummated through foreign exchange forward contracts with a
U.S. commercial bank. The Company does not engage in foreign currency
speculation. The forward contracts are generally 60 to 90 day forward window
contracts having maturities of less than one year. The table below summarizes,
by currency, the contractual amounts of the Company's forward contracts for the
years ended September 30:

<TABLE> 
<CAPTION> 

1996
                                                    As of September 30, 1996
                                                  ------------------------------
                            Original   Contract   Contract   Fair    Unrealized
Currency                    Contracts  Drawdowns  Balance    Value   Gain/(Loss)
--------                    ---------  ---------  --------  -------  -----------
<S>                         <C>        <C>        <C>       <C>      <C> 
Australian Dollars           $ 3,116   $ (2,743)   $   373  $   375    $  (2)
Pound Sterling                14,777     (8,693)     6,084    6,275     (191)
Danish Krona                   5,515     (5,287)       228      226        2
Deutsche Mark                  7,511     (2,937)     4,574    4,475       99
Dutch Guilder                  3,952     (3,952)         -        -        -
Italian Lira                  14,803     (4,453)    10,350   10,461     (111)
Norwegian Krone                3,872     (3,594)       278      277        1
Other                          2,804     (2,040)       764      771       (7)
                             -------   --------    -------  -------    -----
    Total                    $56,350   $(33,699)   $22,651  $22,860    $(209)
                             =======   ========    =======  =======    =====
</TABLE> 

<TABLE> 
<CAPTION> 

1995
                                                    As of September 30, 1996
                                                  ------------------------------
                            Original   Contract   Contract   Fair    Unrealized
Currency                    Contracts  Drawdowns  Balance    Value   Gain/(Loss)
--------                    ---------  ---------  --------  -------  -----------
<S>                         <C>        <C>        <C>       <C>      <C> 
Dutch Guilder                $ 2,842     $   -     $2,842    $2,835     $  7
Norwegian Krone                2,078         -      2,078     2,020       58
Pound Sterling                 1,849      (150)     1,699     1,663       36
Singapore Dollar               1,111         -      1,111     1,099       12
Other                          2,598      (411)     2,187     2,155       32
                             -------     -----     ------    ------     ----
     Total                   $10,478     $(561)    $9,917    $9,772     $145
                             =======     =====     ======    ======     ====
</TABLE> 

Unrealized gains and losses on forward contracts reflect changes in exchange
rates and are recorded directly in income, as they offset corresponding
unrealized gains and losses on the foreign currency denominated assets being
hedged (see Note 1). Forward contract liabilities related to unrealized losses
are recorded as other accrued expenses in the Consolidated Balance Sheet.

The Company is exposed to exchange related losses on forward contracts should a
transaction with a related forward exchange contract not be consummated by the
forward contract expiration date. In such instances, the Company extends or
repurchases the contract at the then prevailing market rates. Realized losses on
the extension or repurchase of contracts totaled $88 for the fiscal year ended
September 30, 1996.


Note 13.  Restructuring Charges

During the third quarter of the fiscal year ended September 30, 1996, the
Company developed and implemented a reorganizational plan which included, among
other things, a 9% staff reduction (75 employees) and the abandonment of certain
leased facilities. The Company recorded a restructuring charge of $3,000, which
consisted of approximately $1,400 in personnel-related charges and approximately
$1,600 of costs associated with carrying vacated space until the lease
expiration date. To date, the Company has paid approximately $1,430 in cash
related to the restructuring. The Company believes the accrued restructuring
costs of $1,570 at September 30, 1996 represents its remaining cash obligations.

                                      F-16
<PAGE>
 
Note 14.  Income Taxes

The provision for income taxes consists of the following for the years ended
September 30:


                                              1996         1995      1994
                                            --------     --------   -------
  

      Federal - current                     $      -     $    240   $     9
      State and local - current                    -          568       175
                                            --------     --------   -------
                                                   -          808       184
      Foreign taxes and withholdings           2,501        2,702     2,010
                                            --------     --------   -------
          Current taxes                        2,501        3,510     2,194
                                            --------     --------   -------
      Federal - deferred                     (12,832)         105      (986)
      State and local - deferred              (3,353)          40      (174)    
                                            --------     --------   -------
      Deferred taxes                         (16,185)         145    (1,160)
                                            --------     --------   -------
          Total income tax expense          $(13,684)    $  3,655   $ 1,034
                                            ========     ========   =======

Seer Technologies, Inc. and its U.S. subsidiary file a consolidated Federal
income tax return. Foreign subsidiaries file income tax returns in their
respective countries. Foreign tax credit carryforwards of approximately $2,268
exist at September 30, 1996. These carryforwards expire from 1997 to 1999 if not
utilized. Federal alternative minimum tax credit carryforwards of $184, which
have no expiration period, also exist at September 30, 1996.

Income before provision for income taxes as shown in the Consolidated Statements
of Operations consists of the following for the years ended September 30:


                                              1996         1995       1994
                                            --------     --------   -------
      Domestic                              $(47,868)    $ 6,203    $ 2,297
      Foreign                                  2,602       2,604      1,098
                                            --------     --------   -------
                                            $(45,266)    $ 8,807    $ 3,395
                                            ========     ========   =======

A reconciliation of expected income tax at the statutory Federal rate with the
actual income tax expense (benefit) is as follows for the fiscal years ended
September 30:


                                              1996         1995       1994
                                            --------     --------   --------

      Expected income tax expense (benefit)
        at statutory rate (34%)            $ (15,391)    $  2,995   $  1,154
      Increase (decrease) in income tax
        expense resulting from:
        Federal minimum tax                        -          127          9
        Non Deductible Expenses                  197          238          -
        State income taxes                    (2,915)         374          1
        Effect of foreign operations 
        including withholding taxes            2,505        1,104        587
        Benefit of net operating loss 
          carryforward                             -            -        (68)
        Other                                    (92)          45        (40)
        Change in valuation allowance for
          deferred tax asset                   2,012       (1,228)      (609)
                                            --------     --------   --------
                                            $(13,684)    $  3,655   $  1,034
                                            ========     ========   ========

                                      F-17
<PAGE>
 
The components of net deferred tax assets are as follows for the years ended
September 30:

<TABLE> 
<CAPTION> 
                                                          1996      1995
                                                        -------    ------
<S>                                                     <C>        <C> 
Current assets:
  Deferred revenue                                      $   119    $  314
  Accrued Liabilities                                     1,142        97
  Unrealized Foreign Exchange Loss                           87       102
  Bad Debt Expense                                        3,559       252
  Other                                                    (286)      199
                                                        -------    ------
  Net current deferred tax asset                          4,621       964

Noncurrent assets:
  Depreciation                                              324       429
  Deferred revenue                                          459       562
  Foreign tax credits                                     2,268       760
  Minimum tax credits                                       184       180
  Research and development tax credit                     2,282         -
  Net operating loss carryforward                        13,851         -
                                                        -------    ------
  Net noncurrent deferred tax asset                      19,368     1,931

  Valuation Allowance                                    (5,234)     (940)

Noncurrent liabilities:
  Capitalized software costs                             (1,163)     (940)
                                                        -------    ------
     Net deferred tax asset                             $17,592    $1,015
                                                        =======    ======
</TABLE> 

Due to the uncertainty related to the realization of the benefits of tax credit
carryforwards in future tax returns, the Company has placed a valuation
allowance against a portion of the otherwise recognizable net deferred tax asset
at September 30, 1996. Also, a valuation allowance of $500 was placed against
the net operating loss carryforward due to a favorable state tax ruling in
effect.

Net deferred tax assets as of September 30, 1996 are $17,592. It is the opinion
of management that it is more likely than not that the realization of these
deferred tax assets will occur in the future based on current earnings
forecasts, tax planning strategies, which include the potential sale of a line
of business and/or product assets, and reversals of future book-tax timing
differences.

Note 15.   Employee Benefit Plan

The Company has a 401(k) plan for all employees and may make matching
contributions to the plan in such amounts as determined by the Board of
Directors. For the years ended September 30, 1996, 1995 and 1994, the Board of
Directors did not authorize any contributions to the 401(k) plan.

The Company also has employee benefit plans for each of its foreign
subsidiaries, as mandated by each country's laws and regulations. Expense
recognized under these plans for the periods ended September 30, 1996, 1995, and
1994 was $629, $400, and $161, respectively.


Note 16.   Recent Accounting Pronouncements

In October, 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), which is generally effective for fiscal years
beginning after December 15, 1995. SFAS No. 123 is not anticipated to have a
material effect on the financial position or results of operations of the
Company.

In March, 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS No. 121"),
which is generally effective for fiscal years beginning after December 15, 1995.
SFAS No. 121 is not anticipated to have a material effect on the financial
position or results of operations of the Company.

                                      F-18
<PAGE>
 
Note 17.   Lease Commitments

The Company leases certain facilities and equipment under various operating
leases. Future minimum lease commitments on operating leases that have initial
or remaining non-cancelable lease terms in excess of one year as of September
30, 1996 are as follows:

              1997            $   4,357
              1998                3,445
              1999                1,398     
                              ---------
                              $   9,200       
                              =========

Rent expense for the fiscal years ended September 30, 1996, 1995 and 1994 was
$3,370, $2,524, and $1,657, respectively.


Note 18.  Contingencies

Various lawsuits and claims have been brought against the Company in the normal
course of business. Management is of the opinion that the liability, if any,
resulting from these claims would not have a material effect on the financial
position or results of operations of the Company.

Note 19.  Selected Quarterly Financial Data (Unaudited)


                                                     (Unaudited)
                                         First    Second     Third    Fourth
(In thousands, except per share data)   Quarter   Quarter   Quarter   Quarter
                                        -------   -------   -------   -------
1996:
       Net revenues                     $21,774   $26,191   $28,056   $ 20,922 
       Gross profit                       9,962    10,945    13,269      4,433
       Net loss                          (5,421)   (4,929)   (5,160)   (16,072)
       Net loss per share               $( 0.48)  $ (0.43)  $ (0.45)  $  (2.08)


1995:
       Net revenues                     $26,499   $26,694   $30,506   $33,481
       Gross profit                      15,981    14,898    18,426    23,237
       Net income                           855       669     1,279     2,349
       Net income per share             $  0.08   $  0.06   $  0.12   $  0.18

Loss per share amounts for the first and second quarters of fiscal 1996 differ
from amounts previously reported in the Company's Quarterly Reports on Form 10-Q
due to an adjustment of the weighted average number of shares used to compute
primary earnings per share.

During the fourth quarter of fiscal year 1996, the Company recorded allowances
of $10,147 to provide for certain accounts receivable whose collection is
considered uncertain and for a specific product-related settlement. These
amounts are included in general and administrative expenses in the Consolidated
Statement of Operations.

                                      F-19
<PAGE>
<TABLE> 
<CAPTION>  
                            EXHIBIT INDEX

Exhibit                                                                        Sequential 
Number            Description                                                   Page No.    
-------           -----------                                                  ----------
<S>          <C>                                                               <C> 
3.1         Certificate of Incorporation (Exhibit 3.1 to the Company's
            Registration Statement on Form S-1, No. 33-92050), as amended to
            include the Certificate of Designation of Series A Convertible
            Preferred Stock of the Company (Exhibit 4.4 to the Quarterly Report
            on Form 10-Q for the period ended June 30, 1996)

3.2         Amended and Restated By-Laws of the Company (Exhibit 3.2 to the
            Company's Registration Statement on Form S-1, No. 33-92050)

4.1         Specimen Common Stock certificate (Exhibit 4.1 to the
            Company's Registration Statement on Form S-1, No. 33-92050)

4.2         See Exhibits 3.1 and 3.2 for the provisions of the Company's
            Certificate of Incorporation and Bylaws governing the rights of
            holders of securities of the Company

4.3         Specimen Preferred Stock certificate (Exhibit 4.3 to the Quarterly
            Report on Form 10-Q for the period ended June 30, 1996)

10.1        Software Agreement, dated March 7, 1990, among the Company, FBC, FBS
            and FBTI, with amendment thereto (Exhibit 10.1 to the Company's
            Registration Statement on Form S-1, No. 33-92050)

10.2        Services Agreement, dated March 8, 1990, among the Company,
            FBPC and FBC (Exhibit 10.2 to the Company's Registration
            Statement on Form S-1, No. 33-92050)

10.3        License Agreement, dated March 7, 1990, between the Company
            and IBM (Exhibit 10.3 to the Company's Registration Statement
            on Form S-1, No. 33-92050)

10.4        Software Escrow Agreement, dated March 7, 1990, among the
            Company, IBM and Data Securities International, Inc. as Escrow
            Agent (Exhibit 10.4 to the Company's Registration Statement on
            Form S-1, No. 33-92050)

10.5        Bill of Sale and Assumption Agreement, dated March 8, 1990,
            among the Company, FBC, FBTI, FBS and FBPC (Exhibit 10.5 to
            the Company's Registration Statement on Form S-1, No.
            33-92050)

10.6        Form of Employee's Non-Competition, Confidentiality and
            Invention Assignment Agreement (Exhibit 10.6 to the Company's
            Registration Statement on Form S-1, No. 33-92050)

10.7        Form of Consultant's Non-Competition, Confidentiality and
            Invention Assignment (Exhibit 10.7 to the Company's
            Registration Statement on Form S-1, No. 33-92050)

10.8        Employment Agreement, dated March 8, 1990, between the
            Company and Eugene F. Bedell (Exhibit 10.8 to the Company's
            Registration Statement on Form S-1, No. 33-92050)

10.9        International Software Marketing Agreement, dated June 7, 1993,
            between the Company and IBM (Exhibit 10.9 to the Company's
            Registration Statement on Form S-1, No. 33-92050)
</TABLE> 

                                      E-1
<PAGE>
 
10.10     Product Remarketing Supplement to International Software     
          Marketing Agreement, dated June 10, 1993, between the        
          Company and IBM (Asia and Pacific Rim) (Exhibit 10.10 to the 
          Company's Registration Statement on Form S-1, No. 33-92050)   


10.11     Master Distribution Agreement, dated February 27, 1992,            
          between the Company and IBM Japan Ltd., with amendments            
          thereto (Exhibit 10.11 to the Company's Registration Statement on  
          Form S-1, No. 33-92050)                                             


10.12     Seer Product License Agreement, dated February 27, 1992,     
          between the Company and IBM Japan Ltd. (Exhibit 10.12 to the 
          Company's Registration Statement on Form S-1, No. 33-92050)   


10.13     Master Distribution and License Agreement, dated April 6, 1992,   
          between the Company and IBM Ireland Information Services Ltd.     
          ("IISL") (Exhibit 10.13 to the Company's Registration Statement   
          on Form S-1, No. 33-92050)                                         


10.14     Cooperative Solution Supplier Program, dated April 2, 1992,       
          between the Company and IBM Canada Ltd., with amendment           
          thereto.  (Exhibit 10.14 to the Company's Registration Statement  
          on Form S-1, No. 33-92050)                                         


10.15     Master Distribution and License Agreement, dated December 30,  
          1993, between the Company and IBM Australia Limited (Exhibit   
          10.15 to the Company's Registration Statement on Form S-1, No. 
          33-92050)                                                       


10.16     Project Viking Funding Agreements, dated September 4, 1992,
          between the Company and IBM (Exhibit 10.16 to the Company's
          Registration Statement on Form S-1, No. 33-92050)           


10.17     License Agreement, dated March 21, 1995, between the Company 
          and Seer Technologies Benelux B.V. (Exhibit 10.17 to the     
          Company's Registration Statement on Form S-1, No. 33-92050)   


10.18     License Agreement, dated March 20, 1995, between the Company 
          and Seer Technologies Ireland Limited (Exhibit 10.18 to the  
          Company's Registration Statement on Form S-1, No. 33-92050)   


10.19     $25,000,000 Credit Facility, dated February 24, 1994, between the 
          Company and NationsBank, N.A. (Carolinas) (Exhibit 10.19 to       
          the Company's Registration Statement on Form S-1, No.             
          33-92050)                                                          


10.20     Lease Agreement, dated July 30, 1991, between the Company and   
          Regency Park Corporation (Cary, NC), with Addenda thereto       
          (Exhibit 10.21 to the Company's Registration Statement on Form  
          S-1, No. 33-92050)                                               


10.22     Lease Agreement, dated December 25, 1992, between the         
          Company and Capital & Counties (London, England) (Exhibit     
          10.22 to the Company's Registration Statement on Form S-1, No.
          33-92050)                                                      

                                      E-2
<PAGE>
 
10.23     Preferred Stock Purchase Agreement, dated March 7, 1990,           
          among the Company, International Business Machines                 
          Corporation ("IBM"), First Boston Securities Corporation ("FBS"),  
          The First Boston Corporation ("FBC"), First Boston Princeton       
          Corp. ("FBPC"), and First Boston Technologies, Inc. ("FBTI"), with 
          amendment thereto (Exhibit 10.25 to the Company's Registration     
          Statement on Form S-1, No. 33-92050)                                


10.24     Stockholders Agreement, dated March 7, 1990, among the      
          Company, FBS and IBM, with amendment thereto (Exhibit 10.24 
          to the Company's Registration Statement on Form S-1, No.    
          33-92050)                                                    


10.25     Significant Stockholders Agreement, dated March 8, 1990, among 
          the Company, FBS, IBM and Eugene F. Bedell (Exhibit 10.25 to   
          the Company's Registration Statement on Form S-1, No.          
          33-92050)                                                       


10.26*    Restricted Stock Purchase Plan of the Company (Exhibit 10.26 to   
          the Company's Registration Statement on Form S-1, No.             
          33-92050)                                                          


10.27*    Form of Restricted Stock Purchase Agreement (Exhibit 10.27 to  
          the Company's Registration Statement on Form S-1, No.          
          33-92050)                                                       


10.28*    Stock Restriction Agreement, dated March 8, 1990, among the     
          Company, FBS, IBM and the management stockholders named         
          therein, with amendment thereto (Exhibit 10.28 to the Company's 
          Registration Statement on Form S-1, No. 33-92050)                


10.29*    Form of Stock Option and Restricted Stock Purchase Plan of the 
          Company (Exhibit 2.9 to the Company's Registration Statement   
          on Form S-1, No. 33-92050)                                      


10.30*    Form of Stock Option Plan for Non-Employee Directors of the    
          Company (Exhibit 10.30 to the Company's Registration Statement 
          on Form S-1, No. 33-92050)                                      


10.31*    Form of Incentive Stock Option Agreement (Exhibit 10.31 to the 
          Company's Registration Statement on Form S-1, No. 33-92050)     


10.32     Stock Purchase Agreement dated June 15, 1994 among the          
          Company, Welsh, Carson, Anderson & Stowe VI, L.P., WCA          
          Management Corporation, WCAS Information Partners, L.P., CS     
          First Boston Securities Corporation, and International Business 
          Machines Corporation (Exhibit 10.32 to the Company's            
          Registration Statement on Form S-1, No. 33-92050)                


10.33     Securities Purchase and Exchange Agreement, dated September     
          30, 1994, among the Company, WCAS Capital Partners II, L.P.,    
          WCA Management Corporation, WCAS Information Partners,          
          L.P., CS First Boston Securities Corporation, and International 
          Business Machines Corporation (Exhibit 10.34 to the Company's   
          Registration Statement on Form S-1, No. 33-92050)                



10.34     Software License Agreement between the Company and Banca 
          Commerciale Italiana (Exhibit 10.34 to the Company's     
          Registration Statement on Form S-1, No. 33-92050)         


10.35     Form of Indemnification Agreement (Exhibit 10.35 to the     
          Company's Registration Statement on Form S-1, No. 33-92050)  

                                      E-3

<PAGE>
<TABLE> 
<S>        <C>                                                                 <C>  

10.36*     First Amendment to Stock Option and Restricted Stock Purchase  
           Plan (Exhibit 10.1 to the Company's Report on Form 10-Q for the
           Quarterly Period Ended June 30, 1995, No. 0-26194)              


10.37      Lease for additional space at the Company's Cary, N.C.   
           headquarters (Exhibit 10.2 to the Company's Registration 
           Statement on Form S-1, No. 33-92050)                      


10.38      Sublease of space at the Company's Cary, N.C. headquarters    
           (Exhibit 10.3 to the Company's Registration Statement on Form 
           S-1, No. 33-92050)                                             


10.39      Credit Agreement and related Promissory Note between Seer     
           Technologies, Inc. and NationsBank, N.A. and related Guaranty 
           between the Company and WCAS, all dated July 15, 1996         
           (Exhibit 10.39 to the Quarterly Report on Form 10-Q for the   
           period ended June 30, 1996)                                    


10.40      Second Consolidated Amendment Agreement dated July 19, 1996    
           between Seer Technologies, Inc. and NationsBank (Exhibit 10.40 
           to the Quarterly Report on Form 10-Q for the period ended June 
           30, 1996)                                                       


10.41      Preferred Stock Purchase Agreement dated August 8, 1996,        
           among the Company, WCAS and certain WCAS affiliates named       
           therein (Exhibit 10.41 to the Quarterly Report on Form 10-Q for 
           the period ended June 30, 1996)                                  


10.42      Stock Agreement dated August 8, 1996, between the Company    
           and WCAS (Exhibit 10.42 to the Quarterly Report on Form 10-Q 
           for the period ended June 30, 1996)                           


10.43*     Employment Agreement, dated August 8, 1996, between the                E-5
           Company and Thomas A. Wilson                               


10.44      Third Consolidated Amendment Agreement dated August 20,                E-7
           1996 between Seer Technologies, Inc. and NationsBank    


10.45*     Employment Agreement, dated September 23, 1996, between the           E-18
           Company and Steven Dmiszewicki                               


11.1       Statement Regarding Computation of Earnings per share                 E-21


21.1       Subsidiaries                                                          E-22


23.1       Consent of Coopers & Lybrand L.L.P. to incorporation of report        E-25
           of independent auditors in this Report into the Company's
           Registration Statement on Forms S-8, Nos. 33-97856 and 33-97858


27.1       Financial Data Schedule
</TABLE> 
______________
* Management contract or compensatory plan or agreement

                                      E-4