<PAGE>   1

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                       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 DECEMBER 31, 2000

                           COMMISSION FILE NO. 1-9158
                   -------------------------------------------

                             MAI SYSTEMS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             DELAWARE                                        22-2554549
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation or organization)                      Identification No.)

           9601 Jeronimo Road
           Irvine, California                                    92618
  (Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (949) 598-6000

                   -------------------------------------------
           Securities registered pursuant to Section 12(b) of the Act:
                     Common Stock $0.01 par value per share
                   -------------------------------------------

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by a 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 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 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]


The registrant's Certificate of Incorporation authorizes the issuance of
24,000,000 shares of $.01 par value Common Stock. As more fully described in
this report, shares of Common Stock were previously distributed by the
registrant to its former creditors pursuant to its Chapter 11 Plan of
Reorganization. At March 20, 2001, the number of issued and outstanding shares
of the Company's Common Stock was 13,656,085 shares. The aggregate market value
of all of the shares of Common Stock held by non-affiliates of the registrant as
of March 20, 2001 was approximately $3,847,176. Directors and officers and ten
percent or greater stockholders are considered affiliates for the purposes of
this calculation but should not necessarily be deemed affiliates for any other
purpose.


Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [X] No

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

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant's 1993 Annual Report on Form 10-K are incorporated herein
by reference in Part I; portions of registrant's 2000 Annual Report are
incorporated herein by reference in Part II; and portions of registrant's
definitive Proxy Statement to be delivered to stockholders in connection with
the Annual Meeting of Stockholders to be in 2001 are incorporated herein by
reference into Part III.


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                                     PART I

ITEM 1. BUSINESS

                                   THE COMPANY

We provide total information technology solutions primarily to the hospitality,
resort and destination industry and to mid-sized process manufacturers. The
solutions provided by us typically include applications software, computer
hardware, peripherals and wide and local area network design, implementation,
installation and support. The software applications are generally our
proprietary software, or software which is licensed to us on an exclusive or
non-exclusive basis. The hardware, peripherals and networking systems are
generally third-party products, which we distribute. Directly and through its
arrangement with third parties, we provide on-site and off-site service and
support to users of our network and systems hardware.

We were incorporated under the laws of the State of Delaware on September 6,
1984. Our name was changed from MAI Basic Four, Inc. to MAI Systems Corporation
on November 6, 1990. We commenced operations on January 29, 1985.

                           DESCRIPTION OF THE BUSINESS

Our mission is to put in place long-term information technology systems for our
customers by designing, installing and supporting customer-specific total
information management solutions. Focusing primarily on the hotel, motel and
resort destinations industry and solutions for mid-sized process manufacturers,
we design, sell, install and support enterprise information management
solutions. We provide a wide array of products and services to our installed
base of approximately 4,000 customers and continues to make direct sales of
certain products and services which enhance, upgrade and extend the useful life
and functionality of our installed systems.

We market our products and services primarily through a team selling approach
utilizing direct sales through the our worldwide offices. We also market certain
products and services through a limited number of distributors, independent
value-added resellers ("VARs"), authorized service representatives and
independent software vendors ("ISVs").

Our activities are conducted principally in the United States, Canada, the
United Kingdom, Hong Kong, Singapore and Mexico. We also operate offices in the
People's Republic of China and Malaysia.

We provide software support services (both procedural and technical support) to
our hospitality and process manufacturing customers from our offices in the
United States, the United Kingdom, Singapore and Hong Kong. In some countries we
rely on certain foreign distributors of our products to provide software support
services to customers located within the distributors' territories.

We provide on-site service through our third-party subcontractors and
help/support desk services to our legacy system customers in the United States
and Canada.

PRODUCTS AND SERVICES

In 2000, our revenue was derived from the following product lines:

<TABLE>
<CAPTION>
                           Percentage of
                           Total Revenue
                           -------------
<S>                        <C>
Hospitality                    72.7%
Process Manufacturing          11.1%
Legacy                         16.2%
                              -----
             Total            100.0%
                              =====
</TABLE>

Products and Services

We design, implement, maintain and support total enterprise information system
solutions. In conjunction with these solutions, our approach is to analyze a
customer's information system requirements, propose a solution and then design,
integrate, install and maintain the system. One of our principal objectives is
to help our customers utilize their data across their entire enterprise so that
information that was once limited to one area of a business can now be available
to other areas where it can be utilized for new purposes. Once a system is
on-line, we typically continue our relationship



                                      -2-
<PAGE>   3

with the customer by providing around-the-clock telephonic support and, through
our contracts with third parties, on-site field support. The systems designed by
us utilize our property management system for hotels, resorts and destinations
and enterprise resource planning ("ERP") applications software for midsize
process manufacturers, which we market with industry-standard hardware and
software products from leading technology vendors including Compaq Computer,
Hewlett Packard, IBM, Data General, and Microsoft.

Hospitality -- 72.7%

We market three enterprise information management systems. Hotel CompuSystem II
has been marketed by us since 1990, when we acquired Computerized Lodging
Systems ("CLS"). In August 1996 we acquired Hotel Information Systems, Inc.
("HIS") and began marketing its Paragon product line. In October 1996, we became
the exclusive distributor of the Lodging Touch International products from
Enterprise Hospitality Solutions ("EHS"), and effective June 30, 2000, acquired
from EHS the exclusive rights to the Lodging Touch products and the royalty free
use of the Lodging Touch name and trademark. Each of the product lines has
features, which make it particularly well suited to a different segment of the
hospitality marketplace.

Hotel CompuSystem II, which targets hotels and resorts in the 300 to 1,000 room
range, runs under UNIX. Hotel CompuSystem II is full-featured and provides
customers with Central Reservation System ("CRS"), Property Management System
("PMS"), Central Information System ("CIS"), and portals to the Global
Distribution System ("GDS") for travel reservations. Additionally, the CLS
products interface to more than 300 other hospitality-related information system
products, such as point-of-sale systems, telephone call monitoring systems and
minibar maintenance systems. The ease of connectivity with third-party products
is one of the system's competitive advantages. Hotel CompuSystem II has been
installed in over 1,500 sites worldwide.

The Paragon and Paragon Plus property management system, from HIS, is designed
to serve the needs of larger hotels and resorts. Running on IBM AS/400 or System
36 computers, the Paragon product line provides the full range of features and
functionality required by premier properties, such as Disneyland Paris or
Renaissance Hotels International. Paragon has been installed in more than 1,000
hotels and resorts around the world, and is a major presence in the Pacific Rim.

The Lodging Touch ("LTS") products comprise a suite of products designed to take
full advantage of the versatility of Microsoft's Windows 2000 and Windows NT
operating systems. They were the industry's first fully graphical products to
fully utilize the features of the Windows NT operating system and Microsoft
Sequel Server. With the LTS products, we have been named a Microsoft Solutions
Partner.

Process Manufacturing -- 11.1%

We develop and market CIMPRO and MANBASE, both of which are ERP applications,
used by midsize process manufacturers. Our typical customer generally has annual
revenues between $20 million and $500 million. These manufacturers convert raw
materials into finished goods or into products used to manufacture other goods.
Typical users of our ERP product would be food and beverage manufacturers,
pharmaceutical manufacturers, and raw chemical manufacturers. These process
manufacturers have unique requirements in formulation quality control,
regulatory compliance, inventory control and production planning that require an
integrated application and system solution.

CIMPRO, which we acquired from Datalogix International, Inc., a subsidiary of
Oracle Corporation, in March 1997, offers a fully integrated modular system for
complete support of process manufacturing planning and tracking, including
inventory, production, supply chain management, costing, accounting, electronic
data interchange ("EDI") and regulatory compliance. CIMPRO's customer base is
primarily food, chemical and pharmaceutical manufacturers.

MANBASE, the rights to which we reacquired in May 1996, also offers a fully
integrated ERP application for process manufacturers. MANBASE has been sold
primarily to food manufacturers and has many features, which are tailored for
the unique requirements of this industry.

We provide continuing support to our MANBASE customers but concentrate our sales
and development efforts on the CIMPRO product line, which includes CIMPRO
classic for UNIX environments and CIMPRO V, written in VB6 (visualbaic) for
Microsoft NT/SQL environments.

Legacy -- 16.2%

We continue to provide principally maintenance services to our installed base of
customers. These products and



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services are designed to enable customers to benefit from their investment in
our host-based information systems. Our OpenBASIC application environment
permits customers using application software written in the Business BASIC
programming language to continue to use such application software on selected
hardware platforms designed for the UNIX, MS-DOS and Novell environments.
Optional OpenBASIC modules permit developers to enhance their Business BASIC
applications by integrating them with popular UNIX and MS-DOS/Microsoft Windows
software.

With our own personnel and through an outsource agreement with Alpha Micro
Systems, Inc. ("Alpha Micro") in the United States and with Olivetti Canada Ltd.
in Canada, we offers on-site repair and warranty service and around-the-clock
telephonic support to our customers.

MARKETING AND SALES

We market our products and services primarily through a team-selling approach,
which utilizes our worldwide network of sales offices and our Irvine,
California-based account representatives. We also market certain products and
services through limited numbers of distributors, authorized service
representatives and ISVs.

In the United States, our systems are marketed by a direct sales and marketing
organization which included, as of February 28, 2001, 24 sales and marketing
personnel located in the corporate headquarters and satellite offices. In
addition, we market our systems internationally through our subsidiaries which
operate in Canada, the United Kingdom, Mexico, Hong Kong and Singapore, and
through various distributors that are exclusive in their jurisdictions. Our
international subsidiaries employed, as of February 28, 2001, 10 sales and
marketing personnel who are engaged in the marketing of MAI products from sales
offices in Canada, Mexico, the United Kingdom, Hong Kong, Singapore, Malaysia
and the People's Republic of China.

During 2000, our aggregate revenue was derived from geographic areas as follows:

<TABLE>
<CAPTION>
                                      Percentage of
                                      Total Revenue
                                      -------------
<S>                                   <C>
United States                             79.1%
Asia                                      10.5%
Canada                                     4.7%
United Kingdom                             3.4%
Other Areas                                2.3%
                                         -----
             Total                       100.0%
                                         =====
</TABLE>

Our financial performance is affected by the fluctuation in value of the US
dollar in relation to the local currencies of the countries in which we do
business. In addition, our foreign operations are subject to the usual risks
that may affect such operations, including possible expropriation or other
governmental actions, taxes and political changes. However, as only 20.9% of our
2000 revenue was generated outside the United States, the risk associated with
these foreign operations in relation to our overall financial performance is
limited.

SUPPORT AND MAINTENANCE

The provision of around-the-clock customer service is a cornerstone of our
business. As of February 28, 2001, we had software support agreements with
approximately 1,500 customers. Additionally, we had hardware maintenance
agreements with approximately 1000 other customers. We employ approximately 84
technicians to provide support for our applications software products.

Telephonic support, which is primarily to assist licensees of our applications
products, is provided from our response centers located in Irvine, California,
Concord, California, Tarrytown, New York, Singapore, Hong Kong and the United
Kingdom. We utilize the latest developments in telephony and call center
technology to enable our support technicians to quickly identify and resolve
customers' software related computing problems.

Our maintenance services are generally provided pursuant to individual
maintenance contracts with customers, although time and material services are
provided in some areas. Such support and maintenance are of varying duration,
provide prospective cancellation rights and require advance payment of fees to
us. Substantially all of the revenue earned by



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<PAGE>   5

maintenance operations is invoiced to customers in advance.

PRODUCTION AND PROCUREMENT

In response to market demand for standardized hardware and software products,
all of our current systems offerings utilize open systems architecture, which
means that they will operate on a wide variety of third-party hardware
equipment. At present, we have relationships with a number of suppliers
including Microsoft, Compaq Computer, Data General, Hewlett Packard, Seagull
Software, Visual Legacy, IBM and distributors such as MicroAge and Ingram Micro.
Management believes that these relationships have enabled us to reduce product
costs, permit earlier availability of new technology and offer customers
products with superior performance at competitive prices. We no longer
manufacture proprietary hardware products.

Delay or failure in the delivery of products or components purchased from third
parties could adversely affect our shipments and our ability to conclude sales.
We have purchased many products and components from single sources of supply.
Because our current products are industry standard, or are comprised of
industry-standard components, management believes that alternative sources of
supply of similar products would be available to us in the event of any
interruption of delivery of a single source supplier.

ORDER, SHIPMENT AND BACKLOG

We record and enter into backlog a purchase order for equipment and software
when we receives a customer's written order requesting delivery within six
months, and systems configuration and contract provisions are verified. Orders
that are canceled by the customer and orders that are not shipped within one
year are removed from backlog. Orders that are removed from backlog for
non-shipment are restored if they are reinstated by the customer.

Set forth below is certain information concerning orders, shipments and backlog
for 1999 and 2000:

<TABLE>
<CAPTION>
                                                     (dollars in millions)
                                                      1999           2000
                                                      ----           ----
<S>                                                 <C>            <C>
Orders received (net of cancellations)              $ 15.5         $  7.9
Shipments                                             23.3           10.1
Backlog (at period end)                               14.0           11.8
</TABLE>

Our backlog is not necessarily indicative of future revenues.

RESEARCH AND DEVELOPMENT

Our research and development activities are focused on the development of
products for the hospitality, resort and destination industry and for products
for midsize process manufacturers.

As of February 28, 2001, we employed 31 engineers, programmers and other
technical personnel in research and development activities. We also utilized
external third party resources for development. During 1998, 1999, and 2000, we
incurred $4,058,000, $5,114,000, and $4,047,000, respectively, for research and
development activities. Our research and development expenditures related to the
support and extension of existing software products and the development of new
products.

CUSTOMERS

Our customers in hospitality are both chain and independent hotels and resorts
and in process manufacturing are generally midsize process manufacturers. Legacy
comprises a highly diversified group of customers in various industries who use
hardware sold by us over the years. During 1999 and 2000, no single customer
accounted for ten percent or more of our revenues.

COMPETITION

Competition is vigorous in all sectors of the worldwide market for
computer-based applications systems, networked solutions and the maintenance and
support of the software and hardware, which comprise those systems. We have



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numerous competitors (and potential competitors) varying widely in their size,
capabilities, market segment and geographic area, many of which are larger and
have financial resources far greater than ours.

Within our targeted application markets, we have positioned ourself to sell
complete enterprise solutions to our customers. Within this marketplace,
competition comes primarily from vendors of competing information technology in
the markets in which we compete. There are several providers of information
technology to the hotel, resort and destination industry against which we
regularly compete. The primary competitors are of similar size to the Company,
and provide technology that is also similar to ours.

The competition in the enterprise resource planning ("ERP") market is diffuse
and new or different competitors often appear with each sales opportunity. In
the lower end of the market, we compete with local VARs and ISVs who usually
resell hardware or networking products of larger equipment manufacturers. These
VARs and ISVs usually sell one or two specialized software application products
targeted for specific industry market segments. Within the mid-range market, we
compete with several companies of similar size and technology. On the high end
of the market, we compete with companies that are much larger and have financial
resources far greater than us.

In the legacy arena, there are some third-party maintenance organizations
("TPMS") that provide service to users of our hardware products. The competition
is minimal, as outside companies cannot provide complete solutions to our
existing proprietary customer base.

TRADEMARKS, COPYRIGHTS AND LICENSES

We are the owner or licensee of certain trademarks, copyrights and other
property rights associated with our businesses, including rights associated with
our proprietary application software. We own or have licensing rights, generally
with terms of three years, to the principal application software products
marketed by us. Such licensing rights are generally renewable. Although there is
some risk that independent vendors who own such products may elect not to renew
their licensing agreements with us and enter into exclusive arrangements with,
or elect to install their software on systems sold by competitors of ours, such
vendors generally tend to continue to support our marketing efforts so long as
our systems provide a good opportunity for them to market their products. These
independent vendors do not represent a significant part of the our revenues.

We are party to license agreements with IBM relating to a variety of patents,
with Novell, Inc. relating to UNIX and with a number of other suppliers of
software products. These licenses are terminable at our option and certain of
the licenses require us to make royalty payments.

OpenBASIC and certain other intellectual property formerly owned by us are
currently owned by Triple P Management BV ("Triple P"), a corporation organized
under the laws of the Netherlands. We hold an exclusive license to use OpenBASIC
and other intellectual property in the western hemisphere and have a
nonexclusive license to use it in certain other parts of the world. The license
is perpetual and royalty-free, but subject to termination under certain
conditions.

EMPLOYEES

As of February 28, 2001, we had 251 employees, of whom 179 were employed in the
United States, 11 in Canada, 2 in Mexico, 9 in the United Kingdom and 50 in Asia
(Hong Kong, Singapore and the People's Republic of China). We have not
experienced any work stoppages and consider our relationship with our employees
to be good.


                        CHAPTER 11 BANKRUPTCY PROCEEDINGS

We filed for Chapter 11 bankruptcy protection on April 12, 1993, shortly after
our banks foreclosed on all of the outstanding capital stock of certain of our
former European subsidiaries in satisfaction of all amounts due under certain
loan agreements. On January 27, 1994, our Plan of Reorganization became
effective. The summary of the material features of the Plan of Reorganization,
contained in our Annual Report on Form 10-K for the year ended December 31, 1993
under the heading "CHAPTER 11 BANKRUPTCY PROCEEDINGS", is included herein by
this reference.

Under the Plan of Reorganization, there was no recovery for holders of our $0.01
par value old Common Stock, and all classes of Preferred Stock outstanding prior
to the Effective Date. The interests evidenced by these securities were
extinguished by operation of the Plan of Reorganization. We commenced
distribution of Common Stock to holders of



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unsecured claims on April 14, 1994. Through December 31, 2000, we had
distributed 6,758,251 shares of Common Stock to our former creditors in
settlement of all outstanding claims, except for tax claims, and we do not
anticipate that any further shares will be issued in this matter. The Plan of
Reorganization provided holders of unsecured claims the right to elect a limited
cash recovery, and through December 31, 2000, $74,570 in cash had been
distributed pursuant to such provision.

At December 31, 2000, there is only one material claim to be settled before the
Chapter 11 proceedings can be formally closed, a tax claim with the United
States Internal Revenue Service (the "Service"). The amount of this claim is in
dispute. We reserved $712,000 for settlement of this claim, which it is
anticipated would be payable to the Service in equal monthly installments over a
period of six (6) years from the settlement date.

                                  RISK FACTORS

The following discussion should be read in conjunction with the audited
consolidated financial statements contained herein. In addition to the factors
set forth herein, there may be other factors, or factors that arise in the
future which may affect our future performance.

WE HAVE RECENTLY SETTLED LITIGATION AND ISSUED A SUBSTANTIAL NUMBER OF SHARES TO
A SHAREHOLDER WHO MAY BE ABLE TO EXERCISE SIGNIFICANT INFLUENCE

In February 2001 we agreed to settle certain litigation which requires that we
issue and register with the United States Securities and Exchange Commission
(the "Commission") a substantial number of shares for an existing shareholder.
This shareholder will be our largest shareholder and beneficially owns
approximately 18% of our common stock. If this shareholder decides not to sell
its shares of common stock or sells the shares in a block to a third party,
either this shareholder or the party or parties it sells to in any "block" sale
may be able to exert significant influence over our affairs. This concentration
of ownership could have the effect of delaying or preventing a change in our
control or otherwise discouraging a potential acquirer from attempting to obtain
control of us, which in turn could have a material and adverse effect on the
market price of our common stock.

THE PRICE OF OUR COMMON  STOCK MAY DECLINE DUE TO SALES BY CERTAIN SHAREHOLDERS

In January and February 2001 we entered into agreements with various creditors
to retire approximately $2.1 million of obligations outstanding partially
through the issuance of new shares of common stock which we agreed to register
with the Commission. These issuances, included with the issuance to our new
principal shareholder, totaled approximately 24.8% of our then issued and
outstanding common stock. Sales by these shareholders of a part or substantially
all of their shares of our common stock in the market or the perception that
sales may occur could cause the market price of our common stock to drop.

At February 28, 2001, we had 13,656,085 shares of common stock outstanding. Most
of the outstanding shares may be traded freely, except for any such shares held
at any time by an "affiliate," as defined under Rule 144 under the Securities
Act of 1933, or any that are "restricted securities" under such rule. In such
cases, shares may be sold pursuant to registration under the Securities Act, or
to the extent permitted by Rule 144 or another exemption under the Securities
Act.

OUR AGREEMENTS WITH OUR PRIMARY LENDER AND THREE OTHER SUBSTANTIAL CREDITORS
REQUIRE SUBSTANTIAL ON-GOING PAYMENTS

In April 1998 we negotiated a $5,000,000 secured revolving credit facility with
Coast Business Credit ("Coast"). On July 28, 1999, we obtained a Bridge Loan
from Coast in the amount of $2,000,000 and amended our credit agreement to allow
for aggregate borrowings on an interest only basis under the credit facility and
Bridge Loan not to exceed $6,000,000. Due to a temporary event of default on the
Bridge Loan and the secured revolving credit facility and pursuant to a
forbearance agreement with Coast, we began making weekly principal payments of
$25,000 on the Bridge Loan commencing in September 1999. During the default
period, we also paid $40,000 in default fees to Coast in 1999 and $30,000 in
2000. The facility was again amended on April 13, 2000. In accordance with the
amendment, the Bridge Loan requires $35,000 weekly principal payments until it
is paid in full. In connection with the amendment, Coast waived all existing
defaults and reduced the aggregate borrowings on an interest only basis under
the credit facility to an amount not to exceed $3,360,000. Additionally, we
agreed to pay Coast a fee of $300,000 in bi-weekly installments of $35,000
commencing after the Bridge Loan is paid in full.



                                      -7-


<PAGE>   8

In March 1997 we issued $6,000,000 of 11% subordinated notes payable due in 2004
to an investment fund managed by Canyon Capital Management LP ("Canyon"). In
September 1997 this indebtedness was reduced to $5,250,000 through application
of a portion of the proceeds realized from the exercise of warrants by Canyon.
The notes call for semi-annual interest payments. On September 30, 1999, we
failed to make the semi-annual interest payment due on that date in the amount
of $288,750.

We subsequently entered into a forbearance agreement which provided for weekly
interest payments to Canyon of $12,500 effective January 1, 2000. In addition,
we executed a security agreement, which provided Canyon with a lien on all of
our tangible and intangible property, which lien is junior to the lien granted
to Coast.

On April 13, 2000, we entered into an agreement with Canyon which waived all
existing events of default, accelerated the note maturity date to March 3, 2003
and provided for continued weekly interest payments of $12,500 until the Coast
Bridge Loan is paid in full. On January 31, 2001, we entered into an agreement
with Canyon whereby the specified accrued interest of $431,000 was added to the
principal balance of the subordinated notes payable. As part of this agreement,
we also agreed to pay Canyon an additional $79,000 loan fee, of which $29,000
was added to principal. Upon repayment of the Coast Bridge Loan, we will be
required to pay Canyon weekly interest payments of $25,000 until all interest on
the subordinated notes is paid in full and the principal balance of the
subordinated notes is reduced to $5,250,000. Thereafter, we will pay weekly
interest payments of approximately $11,000.

On December 2, 1996 we executed outsource agreements with Olivetti North
America, Inc. ("ONA") in the United States and with Olivetti Canada Ltd. in
Canada, for on-site repair and warranty service and telephonic support for the
Company's Legacy customers. On July 26, 1999, Wang Global Corporation ("Wang"),
the parent of ONA, filed for arbitration, alleging breach of contract for
payments due for maintenance services provided by Wang. Wang claimed that the
amount due from us exceeded $3.7 million. We filed a counterclaim for breach of
contract and unfair business practices. Getronics Corporation ("Getronics")
answered the counterclaim in the arbitration, asserting that it was the
successor-in-interest to ONA and Wang.

In September 2000, the parties settled all of their disputes. Pursuant to that
settlement, the parties dismissed the arbitration proceeding and terminated
their outsourcing agreements. We agreed to pay Gentronics a total of $1,124,000
payable as follows: (a) $134,000 on or before September 15, 2000, which has been
paid; (b) $150,000 on or before June 30, 2001; and (c) $35,000 on the first day
of each month from October 2000 through September 2002. Additionally, we
executed a security agreement in Getronics's favor in the amount of $2,000,000
on all of our assets, which is subordinate to Coast and Canyon.

As part of our tentative settlement with CSA Private Limited ("CSA") we agreed
to execute a secured debt instrument in favor of CSA in the principal sum of
$2,800,000 which is subordinate only to our present group of three (3) senior
secured lenders and requires cash installment payments to commence June 1, 2002.

In the event that we are unable to meet the required payments to our primary
lender or meet our payment obligations to our other secured creditors, they are
entitled to exercise certain rights under the respective agreements we have with
them, including but not limited to, foreclosing on all of our tangible and
intangible assets. Such action would have a substantial adverse effect on our
ability to continue as a going concern.

OUR LIMITED PERIOD OF PROFITABILITY MAY NOT CONTINUE

Although we were profitable for the year ended December 31, 2000, we incurred
substantial operating losses and net losses on an annual basis for the previous
four fiscal years. We cannot assure you that we will attain profitability on a
consistent basis or avoid losses on a quarterly or annual basis in the future.



                                      -8-



<PAGE>   9

OUR OPERATING RESULTS IN ONE OR MORE FUTURE PERIODS ARE LIKELY TO FLUCTUATE
SIGNIFICANTLY AND MAY NEGATIVELY IMPACT OUR STOCK PRICE

Our annual and quarterly operating results may fluctuate significantly in the
future as a result of numerous factors, including:

-     the timing of significant orders,
-     the timing of product enhancements and new product introductions by us,
      our technology vendors and our competitors,
-     the pricing of our products and services, and
-     economic and competitive conditions specific to our industry.

Typically, the orders we receive in one quarter are delivered and installed by
the following quarter. However, many of our sales involve lengthy sales cycles
and installations. Consequently, it is not possible to predict with any
reliability the periods within which a sale may close or when we will recognize
revenue. As a result, our operating results may be materially affected if a
single transaction is completed earlier or later than expected. It is likely
that in some future periods our operating results will be below the expectations
of securities analysts and investors. If this happens, the trading price of our
common stock would likely be materially adversely affected.

WE MAY NEED AND BE UNABLE TO OBTAIN ADDITIONAL FUNDING ON SATISFACTORY TERMS,
WHICH COULD DILUTE OUR STOCKHOLDERS OR IMPOSE BURDENSOME FINANCIAL RESTRICTIONS
ON OUR BUSINESS

If our capital requirements or revenue vary materially from our current plans or
if unforseen circumstances occur, we may require additional financing sooner
than we anticipate. This may not be available on a timely basis, in sufficient
amounts or on terms acceptable to us. This financing may also dilute existing
stockholders. Any debt financing or other financing of securities senior to
common stock will likely include financial and other covenants that will
restrict our flexibility. At a minimum, we expect these covenants to include
restrictions on our ability to pay dividends on our common stock. Any failure to
comply with these covenants would have a material adverse effect on our
business, prospects, financial condition and results of operation.

THE MARKET IN WHICH WE OPERATE IS HIGHLY COMPETITIVE, AND WE MAY FACE INCREASED
COMPETITION FROM NEW ENTRANTS AND ESTABLISHED INDUSTRY COMPETITORS WITH
SIGNIFICANTLY GREATER FINANCIAL RESOURCES

We face significant competition in all sectors of the market for computer-based
solutions and support and maintenance services which we offer. We have numerous
competitors in each of our business lines, which vary widely in their size,
capabilities, market segments and geographical areas, many of which are larger
and have financial resources far greater than we have. Within our markets
competition comes primarily from competing software applications vendors,
principally with regard to our hospitality and manufacturing products, and from
local value-added resellers and independent software vendors, who usually resell
hardware or networking products of larger original equipment manufacturers. We
also face competition, to a lesser extent, from independent service
organizations, which provide service to end users of our software products. Many
of our services are also provided by our customers' in-house information
services departments. There can be no assurance that we can effectively compete
with any or all of our competitors in any of our business lines. Our competitors
may be able to adapt more swiftly to new or emerging technologies and changes in
customer requirements, take advantage of acquisition and other opportunities
more readily and devote greater resources to the marketing and sale of their
products and services than we can. There can be no assurance that additional
competitors will not enter markets that we plan to serve or that we will be able
to compete effectively.

THE SOFTWARE INDUSTRY FOR HOSPITALITY MANAGEMENT AND PROCESS MANUFACTURING IS
UNDERGOING RAPID TECHNOLOGICAL CHANGES AND NEW SOFTWARE INTRODUCED BY THIRD
PARTIES MAY BE SUPERIOR TO THE SOFTWARE THAT WE OWN OR LICENSE

The software industry for hospitality management and process manufacturing is
subject to rapid and significant technological change. We cannot predict the
effect of technological changes on our business. We expect that new products and
services will emerge in the markets in which we compete. These new products and
services may be superior to the products and services that we use or these
products and services may render our products and services obsolete. Our failure
to anticipate or respond adequately to the changes in technology and customer
preferences, or to develop and introduce new products in a timely fashion, could
materially adversely affect our business and operating results.



                                      -9-


<PAGE>   10

OUR SOFTWARE MAY HAVE DEFECTS AND WE MAY ENCOUNTER DEVELOPMENT DELAYS

Our software-based products and services may contain undetected errors or
failures when introduced or when new versions are released. There can be no
assurance that, despite testing by us and by current and potential customers,
errors will not be found in our software after commercial release, or that we
will not experience development delays, resulting in delays in market
acceptance, any of which could have a material adverse effect on our business,
prospects, financial condition and results of operations.

OUR STOCK PRICE MAY BE VOLATILE

The recent trading volume for our common stock has been small, and the market
for our common stock has been less liquid than that of many other publicly
traded companies. During the twelve months ended December 31, 2000, the average
daily trading volume has been approximately 26,000 shares. There can be no
assurance that a stockholder who desires to sell shares of common stock can sell
all of the shares that the stockholder desires to sell, either at all or at the
desired times or prices.

Like the stock of other technology companies, the price at which our common
stock will trade is likely to be volatile and may fluctuate substantially due to
factors such as:

         -    fluctuations in our quarterly results of operations,
         -    trading volume,
         -    the announcement of technological innovations or new products by
              us or our competitors,
         -    general conditions in the computer hardware and software
              industries,
         -    economic conditions generally,
         -    our ability to successfully increase its market share with its
              existing products while expanding its product base into other
              markets,
         -    the strength of our distribution channels, and
         -    variances between actual results of operations and the results
              expected by securities analysts

OUR PRINCIPAL BUSINESS LINE, HOSPITALITY SYSTEMS, IS SUBJECT TO CYCLICAL
BUSINESS CONDITIONS

We believe that the growth of our hospitality information systems business is
attributable in part to the current health of the hospitality industry, compared
to the condition of that industry in the early 1990's. We cannot predict the
duration of the current favorable climate in the hospitality industry.

OUR CONTRACT SERVICES BUSINESS IS VOLATILE

We are subject to the risks associated with a contract services business,
including dependence on reputation with existing customers, volatility of
workload and dependence on our ability to retain qualified technical personnel.
Also, a substantial portion of our contract services revenue may be derived from
the performance of services under fixed-price contracts. There can be no
assurance that we can consistently perform in a profitable manner under these
contracts, especially in the field of software development, where cost overruns
are common-place.

OUR SUCCESS DEPENDS ON OUR RETENTION OF OUR EXECUTIVE OFFICERS AND OUR ABILITY
TO HIRE AND RETAIN ADDITIONAL KEY PERSONNEL

Our future performance depends in significant part upon the continued service of
our executive officers and other key technical, sales and management personnel.
The loss of the services of one or more of our executive officers or other key
employees could have a material adverse effect on our business, prospects,
financial condition and results of operations. Our future success also depends
on our continuing ability to attract and retain highly qualified technical,
sales and managerial personnel. Competition for such personnel is intense, and
there can be no assurance that we can retain our key employees or that we can
attract, assimilate or retain other highly qualified technical, sales and
managerial personnel in the future.




                                      -10-


<PAGE>   11

OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO ADDITIONAL RISKS

Our financial performance is affected to some extent by the fluctuation in value
of the US dollar in relation to the local currencies of the countries in which
we do business. In addition, our foreign operations are subject to the usual
risks that may affect such operations, including import and export restrictions,
possible expropriation or other governmental actions, taxes and political
changes. International sales are subject to inherent risks, including:

-     recessions in economies outside the United States,
-     limited protection of intellectual property rights in some countries,
-     political instability,
-     unexpected changes in regulatory requirements and tariffs,
-     difficulties in staffing and managing foreign operations,
-     the possibility of subsidization of our competitors and the
      nationalization of business,
-     longer payment cycles,
-     greater difficulty in accounts receivable collection, and
-     potentially adverse tax consequences.

WE MAY BE UNABLE TO ENFORCE OR DEFEND OUR OWNERSHIP AND USE OF PROPRIETARY
TECHNOLOGY

Our success depends to a significant degree upon our proprietary technology upon
and our licensing rights to the principal application software products that we
market. We rely on a combination of trademark, trade secret and copyright law
and contractual restrictions to protect our proprietary technology. However,
these measures provide only limited protection, and we may not be able to detect
unauthorized use or take appropriate steps to enforce our intellectual property
rights, particularly in foreign countries where the laws may not protect our
proprietary rights as fully as in the United States. Any litigation to enforce
our intellectual property rights would be expensive and time-consuming, would
divert management resources and may not be adequate to protect our business.

We could be subject to claims that we have infringed the intellectual property
rights of others. In addition, we may be required to indemnify our resellers and
users for similar claims made against them. Any claims against us could require
us to spend significant time and money in litigation, pay damages, develop new
intellectual property or acquire licenses to intellectual property that is the
subject of the infringement claims. These licenses, if required, may not be
available at all or on acceptable terms. As a result, intellectual property
claims against us could have a material adverse effect on our business,
prospects, financial condition and results of operations.

WE DEPEND ON VARIOUS THIRD PARTIES FOR CERTAIN SERVICES

The networking products and services implemented, maintained and supported by us
utilize hardware and software products from multiple technology vendors.
Accordingly, we are and will remain dependent on the supply of products from
such vendors. In addition, delay or failure in the delivery of products or
components purchased from third parties could adversely affect shipments by us
and its ability to conclude sales. We have purchased many products and
components from single sources of supply. Because our current products are
industry standard, management believes that alternative sources of supply of
similar products would be available to us in the event of any interruption of
delivery of a single source supplier. However, there can be no assurance that
any such products will be available or be accepted by our customers.

Currently, we also rely on certain third parties, including value-added
resellers, agents and distributors as a means of marketing our products and
services. In the event of any prolonged technical problems or failures
experienced by these third parties or the termination of these marketing
agreements, our marketing capabilities could be significantly hindered. As a
result, we could experience periods of time in which we had little to no
marketing activity. Any such occurrence could have a detrimental effect on our
business, prospects, financial condition or results of operations. Many of these
relationships are terminable at will or upon short notice. Furthermore, none of
our relationships with these third parties includes long-term contractual
commitments to continue the relationship, and many of these relationships are in
the early stages of development. Although we believe that individually none of
these relationships is material to our business, we consider our strategic
alliances in their entirety to be important to our future success.



                                      -11-


<PAGE>   12

AMERICAN STOCK EXCHANGE MARKET LISTING

We were notified by The American Stock Exchange that we no longer comply with
the requirements for continued listing and have subsequently met with exchange
officials to review such requirements. Based upon this meeting the American
Stock Exchange has determined that it will continue our listing pending review
of our Form 10-K for 2000 and has requested a report updating the exchange on
financial projections and other operational matters on or before March 30, 2001.
We are cooperating with the American Stock Exchange in its decision making
process. We cannot provide any assurance that we will remain listed on the
American Stock Exchange or that we will not be delisted at some later time. In
the event of a delisting, we will attempt to have our common stock listed on the
over-the-counter electronic bulletin board sponsored by Nasdaq. In such event,
investors may find it more difficult to trade in our common stock or to obtain
accurate, current information concerning market prices. This could have a
substantially negative impact on the trading prices and the liquidity of the
market for our common stock. In addition, there would likely be a more negative
perception of our company by investors, customers and third parties doing
business or considering doing business with us. Also, following delisting, our
company would be treated less favorably with respect to regulatory requirements
that are dependent upon listing on a national stock exchange. For example, our
common stock would cease to be a covered security for purposes of Section 18 of
the Securities Act of 1933, which provides an exemption from state securities
registration or qualification requirements.

FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN

Some statements under the caption "Risk Factors," and elsewhere in this
prospectus or in the documents incorporated by reference in this prospectus are
forward-looking statements. These forward-looking statements include, but are
not limited to, statements about our industry, plans, objectives, expectations,
intentions and assumptions and other statements that are not historical facts.
When used in this prospectus or in the incorporated documents, the words
"expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and
similar expressions are generally intended to identify forward-looking
statements. Because these forward-looking statements involve risks and
uncertainties, including those described in this "Risk Factors" section, actual
results may differ materially from those expressed or implied by these
forward-looking statements. We do not intend to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

ITEM 2. PROPERTIES

As of February 28, 2001, the principal properties utilized by the Company were
as follows:

<TABLE>
<CAPTION>
                                                                                            Approximate
                                                                                            Total Square
                              Type of Facility                                                Footage           Location
                              ----------------                                              ------------        --------
<S>                                                                                         <C>            <C>
Corporate and Hospitality Headquarters, warehousing, administration, marketing,                50,210      Irvine, California
sales, development and support
Product development, sales and support                                                          3,151      Concord, California
Process Manufacturing headquarters, marketing, sales, development, and support                 16,370      Tarrytown, New York
MAI Canada Ltd. Administration, sales, education, warehousing, test and repair                  6,710      Ontario, Canada
Hotel Information Systems (Ltd) Hong Kong headquarters, marketing, sales, and support           3,638      Hong Kong
Hotel Information Systems (Ltd) Singapore sales and support                                     4,527      Singapore
MAI Information Solutions Limited, European Headquarters, marketing, sales and support          2,201      London
</TABLE>

All of the properties noted above were occupied by the Company pursuant to
leases with various expiration dates. In addition to the premises identified
above, the Company leases an office in one additional location in the United
States, one additional location in Canada and five other locations around the
world. Generally such leases are for terms of five years or less.

ITEM 3. LEGAL PROCEEDINGS

Chapter 11 Bankruptcy Proceedings

At December 31, 2000, there was only one material claim to be settled before our
Chapter 11 proceeding could be formally closed, a tax claim with the United
States Internal Revenue Service (the "Service"). The amount of this claim is in
dispute. We have reserved $712,000 for settlement of this claim, which it is
anticipated would be payable to the Service in equal monthly installments over a
period of six (6) years from the settlement date at an interest rate of 6%.



                                      -12-


<PAGE>   13

CSA Private Limited v. MAI Systems Corporation

CSA is one of our shareholders. On August 9, 1996, we acquired from Hotel
Information Systems, Inc. ("HIS") substantially all their assets and certain of
their liabilities (the "HIS Acquisition"). At the time of our acquisition of HIS
in 1996, CSA was a shareholder of HIS and, in connection with the purchase, we
agreed to issue to CSA shares of our common stock worth approximately $4.8
million in August 1996, which amount has increased to approximately $6.9 million
as of January 31, 2001, pursuant to the agreement. We also granted CSA demand
registration rights with respect to such stock. CSA requested registration of
their shares, but we delayed registration based upon our good faith exercise of
our rights under our agreement with CSA. On October 5, 1998, CSA filed a lawsuit
against us in the U.S. District Court for the Central District of California.
Pursuant to a settlement agreement entered into as of May 13, 1999 we agreed by
November 1, 1999 to file, or at a minimum to commence the process to file, a
registration statement with the Securities and Exchange Commission ("SEC") for
the purpose of registering CSA's shares. CSA initiated another lawsuit in
December 1999 in the above-referenced court (a) seeking damages in excess of $5
million; (b) enforcement of the settlement agreement; and (c) and injunctive
relief through court order to cause us to file the registration statement. On
March 6, 2000, we answered the complaint. Because we did not conclude the
registration statement filing by November 1, 1999, CSA initiated a second
lawsuit in January 2000 to enforce the settlement agreement and secure
injunctive relief through court order to cause us to file the registration
statement. We entered into a second settlement agreement with CSA in February,
2001, whereby we agreed to take the following steps on or before March 1, 2001:
(i) issue CSA additional shares of our common stock to bring CSA's total share
ownership to 2,433,333 shares; (ii) immediately file a registration statement
for all of CSA's shares of our common stock; and (iii) execute a secured debt
instrument in favor of CSA in the principal sum of $2,800,000 which is
subordinate only to our present group of three (3) senior secured leaders which
requires cash installment payments to commence June 1, 2002. The number of
shares which may be sold by this selling shareholder includes: (i) CSA's current
ownership of 517,319 shares, and (ii) 1,916,014 additional shares which we will
issue to CSA pursuant to the settlement agreement.
See "Principal and Selling Shareholders."

Enterprise Hospitality Solutions, Inc. v. MAI Systems Corporation

On November, 30, 1999, Enterprise Hospitality Solutions, Inc. ("EHS") and
Christian Rivadella commenced an action against us in the United States District
Court for the Central District of California, alleging that we had failed to pay
certain royalties to EHS under the parties' exclusive license agreement. The
Complaint asserted claims for breach of contract, unjust enrichment, accounting
and unfair competition. The Complaint sought damages, preliminary and permanent
injunctive relief, imposition of a constructive trust, an order canceling our
exclusive right to license the software at issue under the parties' agreement,
and the appointment of a receiver to conduct an audit. On February 1, 2000, we
answered the Complaint by denying its material allegations and asserted a
Counterclaim against the plaintiffs. The Counterclaim asserts claims for breach
of the parties exclusive license agreement, breach of the covenant of good faith
and fair dealing, unfair business practices, interference with contractual
relations and declaratory relief, and a declaration that we were not in breach
of the parties' license agreement.

Effective June 30, 2000, the parties entered into an agreement pursuant to which
we acquired from EHS the exclusive worldwide marketing rights to the Lodging
Touch products and the royalty free use of the Lodging Touch name and trademark.
As part of that agreement, all prior agreements between the us and EHS were
terminated. The parties executed mutual general releases, and the litigation was
dismissed with prejudice.

Wang Global Corporation v. MAI Systems Corporation

On December 2, 1996 we executed outsource agreements with Olivetti North
America, Inc. ("ONA") in the United States and with Olivetti Canada Ltd. in
Canada, for on-site repair and warranty service and telephonic support for our
Legacy customers. On July 26, 1999, Wang Global Corporation ("Wang"), asserting
that it was the parent of ONA, filed for arbitration in this matter, alleging
breach of contract for payments due for maintenance services provided by Wang.
Wang claims that the amounts due from us exceed $3.7 million.

We filed a counterclaim for breach of contract and unfair business practices.
Getronics Corporation ("Getronics") answered the Counterclaim in the
arbitration, asserting that it was the successor-in-interest to ONA and Wang.

In September 2000, the parties settled all of their disputes. Pursuant to that
settlement, the parties dismissed the arbitration proceeding and terminated
their outsourcing agreements. We agreed to pay Getronics a total of $1,124,000
payable as follows: (a) $134,000 on or before September 15, 2000, which has been
paid; (b) $150,000 on or before June 30, 2001; and (c) $35,000 on the first day
of each month from October 2000 through September 2002.



                                      -13-


<PAGE>   14

Additionally, (a) we executed a security agreement in Getronics's favor in the
amount of $2,000,000 on all of our assets; (b) the parties mutually released all
claims against each other, other than as stated in the Stipulation; and (c)
Getronics agreed to provide services through September 15, 2000 at which time we
assumed the responsibility of servicing our customers under hardware support
service agreements.

Other Litigation

We are also involved in various other legal proceedings that are incident to our
business. Management believes the ultimate outcome of these matters will not
have a material adverse effect on our consolidated financial position, results
of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.



                                      -14-



<PAGE>   15

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our shares are traded on the American Stock Exchange, Inc. under the AMEX symbol
"NOW". Prior to listing on the AMEX, which occurred August 29, 1995, our shares
were traded over-the-counter by various market makers under the ticker symbol
"MAIS". The following table sets forth the high and low closing sales prices for
our common stock for the indicated periods during 1999 and 2000, as reported by
the AMEX. On March 20, 2001, the closing price of our common stock as reported
by the AMEX was $0.48. At March 20, 2001, there were 553 stockholders of record
(See "Risk Factors" -- American Stock Exchange Market Listing").

We have never paid any dividends and do not anticipate declaring or paying cash
dividends in the foreseeable future. We intend to retain future earnings, if
any, to reinvest in our business. The covenants in our current or future
financing agreements may prohibit or limit our ability to declare or pay cash
dividends.

<TABLE>
<CAPTION>
Period                                                  High          Low
------                                                  ----          ---
<S>                                                    <C>           <C>
Fiscal 1999:
           First Quarter                               $3.25         $2.13
           Second Quarter                               4.00          1.88
           Third Quarter                                3.31          1.06
           Fourth Quarter                               1.25          0.44

Fiscal 2000
           First Quarter                               $1.56         $0.81
           Second Quarter                               1.13          0.50
           Third Quarter                                0.69          0.31
           Fourth Quarter                               0.44          0.19

Fiscal 2001
           First Quarter (through March 20, 2001)      $0.67         $0.19
</TABLE>

ITEM 6. SELECTED FINANCIAL INFORMATION

The information required by this item is incorporated by reference to our Annual
Report under the heading, "Selected Financial Information".

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The information required by this item is incorporated by reference to our Annual
Report under the heading, "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK DISCLOSURES

The following discussion about our market risk disclosures contains
forward-looking statements. Forward-looking statements are subject to risks and
uncertainties. Actual results could differ materially from those discussed in
the forward-looking statements. We are exposed to market risk related to changes
in interest rates and foreign currency exchange rates. We do not have derivative
financial instruments for hedging, speculative, or trading purposes.

INTEREST RATE SENSITIVITY

Of our $8.7 million principal amount of indebtedness at December 31, 2000, $2.8
million bears interest at a rate that fluctuates based on changes in prime rate.
A 1% change in the underlying prime rate would result in a $28,000 change in the
annual amount of interest payable on such debt. Of the remaining amount of $5.9
million, $5.25 million bears interest at a fixed rate of 11% and $0.6 million
bears fixed interest rates ranging from 6% to 17.5% The face amount of our notes
receivable totals $4,925,000. Of that amount, $2.6 million bears interest at a
fixed rate of 10%. The remaining balance consisting of a $2,325,000 note (which
has been discounted at the rate of 10% for




                                      -15-


<PAGE>   16

financial reporting) is non-interest bearing until October 2002, at which time
interest is payable at the rate of prime plus 1%. A one-percentage point change
in the interest rate of this note would result in a $23,250 annual change in
interest income beginning in October 2002. The impact reduces as the principal
is paid down over the following four years.

FOREIGN CURRENCY RISK

We believe that our exposure to currency exchange fluctuation risk is reduced
because our transactions with international vendors and customers are generally
denominated in US dollars. The currency exchange impact on intercompany
transactions was immaterial in 2000, 1999 and 1998.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference to our Annual
Report under the headings, "Consolidated Balance Sheets", "Consolidated
Statements of Operations", "Consolidated Statement of Stockholders' Equity
(Deficiency) and Comprehensive Income (Loss)", "Consolidated Statements of Cash
Flows", "Notes to Consolidated Financial Statements" and "Independent Auditors'
Report".

Schedule II Valuation and Qualifying Accounts is set forth in this Annual Report
on Form 10-K.

All other schedules and financial statements are omitted because they are not
applicable or the required information is shown in the consolidated financial
statements or notes thereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.







                                      -16-


<PAGE>   17

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this Item with respect to Directors may be found in the
section captioned "Election of Directors" appearing in the definitive Proxy
Statement to be delivered to stockholders in connection with the Annual Meeting
of Stockholders to be held in 2001. Information required by this Item with
respect to executive officers may be found in the section captioned "Proposal 1
- Election of Directors, Executive Officers" appearing in the definitive Proxy
Statement to be delivered to stockholders in connection with the Annual Meeting
of Stockholders to be held in 2001. Such information is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this Item may be found in the section captioned
"Executive Compensation" appearing in the definitive Proxy Statement to be
delivered to stockholders in connection with the Annual Meeting of Stockholders
to be held in 2001. Such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to this Item may be found in the section captioned
"Security Ownership of Management" appearing in the definitive Proxy Statement
to be delivered to stockholders in connection with the Annual Meeting of
Stockholders to be held in 2001. Such information is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information with respect to this Item may be found in the section captioned
"Executive Compensation - Employment Contracts and Change of Control
Arrangements; Certain Transactions with Management" appearing in the definitive
Proxy Statement to be delivered to stockholders in connection with the Annual
Meeting of Stockholders to be held in 2001. Such information is incorporated
herein by reference.



                                      -17-



<PAGE>   18

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE AND REPORTS ON FORM 8-K

(a)         1. Financial Statements

               Independent Auditors' Report
               Consolidated Balance Sheets
               Consolidated Statements of Operations
               Consolidated Statements of Stockholders' Equity
               (Deficiency) and Comprehensive Income (Loss)
               Consolidated Statements of Cash Flows
               Notes to Consolidated Financial Statements

            2. Financial Statement Schedule

               The consolidated financial statements of the Company, the notes
               thereto and the Independent Auditors' Report are incorporated
               herein by reference to the Company's 2000 Annual Report.

               Schedule II Valuation and Qualifying Accounts

            3. Exhibits:

Number         Exhibit
------         -------

2.1            First Amended Joint Chapter II Plan of Reorganization of MAI
               Systems Corporation, Brooke Acquisition Corp. and CLS Software,
               Inc., as confirmed by the United States Bankruptcy Court for the
               District of Delaware, on November 13, 1993, filed as Exhibit 2.1
               to the Registrant's Current Report on Form 8-K dated January 15,
               1994.

2.2            Consent Order Modifying Confirmed Plan of Reorganization and
               Fixing Effective Date, as entered by the United States Bankruptcy
               Court for the district of Delaware on January 27, 1994, as filed
               as Exhibit 2.2 to the Registrant's Current Report on form 8-K
               dated February 9, 1994.

3.1            Amended and Restated Certificate of Incorporation of MAI Systems
               Corporation, filed as Exhibit 3.1 to the Company's 1996 Annual
               Report on Form 10-K.

3.2            Amendment No. 1 to the Amended and Restated Certificate of
               Incorporation of MAI Systems Corporation, filed as Exhibit 3.2 to
               the Company's 1996 Annual Report on Form 10-K.

3.3            By-laws of MAI Systems Corporation, filed as Exhibit 2(b) to the
               Registrant's Registration Statement on Form 8-A/A filed with the
               Securities and Exchange Commission on February 24, 1994.

3.4            Amendment No. 2 to the Amended and Restated Certificate of
               Incorporation of MAI Systems Corporation, filed as Exhibit 3.4 to
               the Company's 1998 Annual Report on Form 10-K.

10.1           Coast Business Credit Loan and Security Agreement, dated April
               23, 1998, filed as Exhibit 10.2 to the Company's 1998 Annual
               Report on Form 10-K.

10.2           Amendment Number One dated September 30, 1998 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.2 to the Company's 1998
               Annual Report on Form 10-K.

10.3           Amendment Number Two dated March 2, 1999 to the Loan and Security
               Agreement between Coast Business Credit and the Company dated
               April 23, 1998, filed as Exhibit 10.3 to the Company's 1999
               Annual Report on Form 10-K.

10.4           Amendment Number Three dated June 16, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.4 to the Company's 1999
               Annual Report on Form 10-K.

10.5           Amendment Number Four dated July 28, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.3 to the Company's
               Quarterly Report on Form 10-Q for the period ending September 30,
               1999.


                                      -18-

<PAGE>   19

10.6           Letter Agreement Amendment dated October 1, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.6 to the Company's 1999
               Annual Report on Form 10-K.

10.7           Consulting Agreement dated as of August 15, 1994, as amended as
               of October 17, 1994, August 16, 1996, August 31, 1997, August 31,
               1998, August 31, 1999 and August 31, 2000 by and between the
               Company and Orchard Capital Corporation, relating to the services
               of Richard S. Ressler, Chairman of the Board. The original
               agreement and the October 17, 1994 amendment are incorporated
               herein by reference to the Company's 1994 Annual Report on Form
               10-K. The August 16, 1996 amendment is incorporated herein by
               reference to the Company's 1996 Annual Report on Form 10-K. The
               August 31, 1997 amendment is incorporated herein by reference to
               the Company's 1997 Annual Report on Form 10-K. The August 31,
               1998 amendment is incorporated herein by reference to the
               Company's 1998 Annual Report on Form 10-K. The August 31, 1999
               amendment is incorporated herein by reference to the Company's
               1999 Annual Report on Form 10-K. The August 2000 amendment is
               incorporated herein by reference to the Company's 2000 Annual
               Report on Form 10-K.

10.8           Richard S. Ressler Stock Purchase Letter, dated February 3, 1999,
               filed as Exhibit 10.4 to the Company's 1998 Annual Report on Form
               10-K.

10.9           Stock Option Agreement between Luke Brown and the Company dated
               November 2, 1999, filed as Exhibit 10.9 to the Company's 1999
               Annual Report on Form 10-K.

10.10          Stock Option Agreement between James Dolan and the Company dated
               November 2, 1999, filed as Exhibit 10.10 to the Company's 1999
               Annual Report on Form 10-K.

10.11          Stock Option Agreement between W. Brian Kretzmer and the Company
               dated August 2, 1999, filed as Exhibit 10.11 to the Company's
               1999 Annual Report on Form 10-K.

10.12          Stock Option Agreement between Sasun Musilyan and the Company
               dated August 2, 1999, filed as Exhibit 10.12 to the Company's
               1999 Annual Report on Form 10-K.

10.13          1996 Non-Employee Directors Stock Option Plan, filed as Exhibit
               10.5 to the Company's 1998 Annual Report on Form 10-K.

10.14          MAI Systems Corporation Amended 1993 Stock Option Plan, filed as
               Exhibit 10.6 to the Company's 1998 Annual Report on Form 10-K.

10.15          Termination/Transition Agreement between Christian Rivadalla
               d/b/a Enterprise Hospitality Solutions and Enterprise Hospitality
               Solutions, Inc., and the Company dated August 2, 1999, filed as
               Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
               the period ending September 30, 1999.

10.16          Exclusive Worldwide Software License Agreement between Christian
               Rivadalla d/b/a Enterprise Hospitality Solutions and Enterprise
               Hospitality Solutions, Inc., and the Company dated August 20,
               1999, filed as Exhibit 10.5 to the Company's Quarterly Report on
               Form 10-Q for the period ending September 30, 1999.

10.17          Forebearance Agreement between MAI Systems Corporation and CPI
               Securities LP, The Value Realization Fund, L.P., The Canyon Value
               Realization Fund and GRS Partners II dated October 28, 1999,
               filed as Exhibit 10.7 to the Company's Quarterly Report on Form
               10-Q for the period ending September 30, 1999.

10.18          Amendment No. 1 dated February 14, 2000 to Forebearance Agreement
               between MAI Systems Corporation and CPI Securities LP, The Value
               Realization Fund, L.P., The Canyon Value Realization Fund and GRS
               Partners II dated October 28, 1999, filed as Exhibit 10.18 to the
               Company's 1999 Annual Report on Form 10-K.

10.19          Amendment No. 2 dated April 13, 2000 to Forebearance Agreement
               between MAI Systems Corporation and CPI Securities LP, The Value
               Realization Fund, L.P., The Canyon Value Realization Fund and GRS
               Partners II dated October 28, 1999, filed as Exhibit 10.19 to the
               Company's 1999 Annual Report on Form 10-K.

10.20          Amendment Number Five dated April 13, 2000, to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.20 to the Company's
               1999 Annual Report on Form 10-K.

10.21          Stock Option Agreement between Sasun Musilyan and the Company
               dated January 20, 1999, filed as Exhibit 10.21 to the Company's
               1999 Annual Report on Form 10-K.



                                      -19-


<PAGE>   20

10.22          Stock Option Agreement between James Dolan and the Company dated
               March 24, 2000.

10.23          Stock Option Agreement between W. Brian Kretzmer and the Company
               dated March 24, 2000.

10.24          Warrant Agreement between W. Brian Kretzmer and the Company dated
               March 24, 2000, filed as Exhibit 10.1 to the Company's Quarterly
               Report for the period ended June 30, 2000.

10.25          Settlement Agreement dated September 2000 between GetronicsWang
               Co. LLC and Olsy North America, Inc. and MAI Systems Corporation,
               filed as Exhibit 10.2 to the Company's Quarterly Report for the
               period ended September 30, 2000.

10.26          Security Agreement dated September 2000 between GetronicsWang Co.
               LLC and MAI Systems Corporation, filed as Exhibit 10.3 to the
               Company's Quarterly Report for the period ended September 30,
               2000.

10.27          Settlement Agreement dated December 1, 2000 between CSA and MAI
               Systems Corporation.

10.28          Security Agreement dated December 1, 2000 between CSA and MAI
               Systems Corporation.

10.29          Settlement Agreement and Mutual Release and Purchase Agreement
               dated June 30, 2000 between Enterprise Hospitality Solutions,
               Lodging Touch International and Global Enterprise Technology
               Solutions and MAI Systems Corporation and Hotel Information
               Systems, Inc., filed as Exhibit 10.1 to the Company's Quarterly
               Report for the period ended September 30, 2000.

10.30          Consulting Agreement dated July 15, 2000 between Zohar Loshitzer
               and MAI Systems Corporation.

10.31          Amendment Number Six dated September 12, 2000, to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998.

10.32          Supplement and Amendment dated January 31, 2001 to Forebearance
               Agreement between MAI Systems Corporation and CPI Securities LP,
               The Value Realization Fund, L.P., The Canyon Value Realization
               Fund and GRS Partners II dated October 28, 1999.

13.1           Portions of the Company's Annual Report to Stockholders for the
               year ended December 31, 2000, but only to the extent such report
               is expressly incorporated by reference into Items 6, 7, 8 and
               14(a)(1) of this report and such report is not otherwise deemed
               to be filed as part of this Annual Report on Form 10-K.

21.1           Subsidiaries of MAI Systems Corporation

23.1           Consent of KPMG LLP

(b)            Reports on Form 8-K during the fourth quarter of 2000
               None.



                                      -20-


<PAGE>   21


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           MAI SYSTEMS CORPORATION



                                           By: /s/ William B. Kretzmer
                                               --------------------------------
                                               William B. Kretzmer
                                               Chief Executive Officer
                                               and President

Dated:  March 21, 2001

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 indicated on March 21, 2001.


Signatures                               Title
----------                               -----
/s/Richard S. Ressler                    Chairman, Director
---------------------------------
Richard S. Ressler

/s/William B. Kretzmer                   Chief Executive Officer and President
---------------------------------        (Principal Executive Officer)
William B. Kretzmer

/s/James W. Dolan                        Chief Operating Officer and Chief
---------------------------------        Financial Officer
James W. Dolan                           (Principal Financial and  Accounting
                                         Officer)

/s/Zohar Loshitzer                       Director
---------------------------------
Zohar Loshitzer

/s/Morton O. Schapiro                    Director
---------------------------------
Morton O. Schapiro




                                      -21-

<PAGE>   22


                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 1998, 1999 and 2000
                             (dollars in thousands)



<TABLE>
<CAPTION>
                                         Balance      Charged to     Reductions     Additions                   Balances
                                        Beginning     Costs and     Due to Sale        from                      End of
                                         of Year       Expenses    of Subsidiary   Acquisitions   Write-offs      Year
<S>                                     <C>           <C>          <C>             <C>            <C>           <C>
Year ended December 31, 1998:
Allowance for doubtful accounts          $1,983         $1,340         $  --          $ --         $    --        $3,323

Provision for inventory obsolescence     $2,170           $346         $  --          $ --         $    --        $2,516
                                       =================================================================================

Year ended December 31, 1999:
Allowance for doubtful accounts          $3,323         $2,151         $ (75)         $ --         $(1,777)       $3,622

Provision for inventory obsolescence     $2,516           $413         $(470)         $ --         $   (86)       $2,373
                                       =================================================================================
Year ended December 31, 2000:
Allowance for doubtful accounts          $3,622           $933         $  --          $ --         $(2,401)       $2,154

Provision for inventory obsolescence     $2,373           $170         $  --          $ --         $  (345)       $2,238
                                       =================================================================================
</TABLE>


                                      -22-

<PAGE>   23

                                 EXHIBIT INDEX


Number         Exhibit
------         -------

2.1            First Amended Joint Chapter II Plan of Reorganization of MAI
               Systems Corporation, Brooke Acquisition Corp. and CLS Software,
               Inc., as confirmed by the United States Bankruptcy Court for the
               District of Delaware, on November 13, 1993, filed as Exhibit 2.1
               to the Registrant's Current Report on Form 8-K dated January 15,
               1994.

2.2            Consent Order Modifying Confirmed Plan of Reorganization and
               Fixing Effective Date, as entered by the United States Bankruptcy
               Court for the district of Delaware on January 27, 1994, as filed
               as Exhibit 2.2 to the Registrant's Current Report on form 8-K
               dated February 9, 1994.

3.1            Amended and Restated Certificate of Incorporation of MAI Systems
               Corporation, filed as Exhibit 3.1 to the Company's 1996 Annual
               Report on Form 10-K.

3.2            Amendment No. 1 to the Amended and Restated Certificate of
               Incorporation of MAI Systems Corporation, filed as Exhibit 3.2 to
               the Company's 1996 Annual Report on Form 10-K.

3.3            By-laws of MAI Systems Corporation, filed as Exhibit 2(b) to the
               Registrant's Registration Statement on Form 8-A/A filed with the
               Securities and Exchange Commission on February 24, 1994.

3.4            Amendment No. 2 to the Amended and Restated Certificate of
               Incorporation of MAI Systems Corporation, filed as Exhibit 3.4 to
               the Company's 1998 Annual Report on Form 10-K.

10.1           Coast Business Credit Loan and Security Agreement, dated April
               23, 1998, filed as Exhibit 10.2 to the Company's 1998 Annual
               Report on Form 10-K.

10.2           Amendment Number One dated September 30, 1998 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.2 to the Company's
               1999 Annual Report on Form 10-K.

10.3           Amendment Number Two dated March 2, 1999 to the Loan and Security
               Agreement between Coast Business Credit and the Company dated
               April 23, 1998, filed as Exhibit 10.3 to the Company's
               1999 Annual Report on Form 10-K.

10.4           Amendment Number Three dated June 16, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.4 to the Company's
               1999 Annual Report on Form 10-K.

10.5           Amendment Number Four dated July 28, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.3 to the Company's
               Quarterly Report on Form 10-Q for the period ending September 30,
               1999.


                                      -23-
<PAGE>   24

10.6           Letter Agreement Amendment dated October 1, 1999 to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.6 to the Company's
               1999 Annual Report on Form 10-K.

10.7           Consulting Agreement dated as of August 15, 1994, as amended as
               of October 17, 1994, August 16, 1996, August 31, 1997, August 31,
               1998, August 31, 1999 and August 31, 2000 by and between the
               Company and Orchard Capital Corporation, relating to the services
               of Richard S. Ressler, Chairman of the Board. The original
               agreement and the October 17, 1994 amendment are incorporated
               herein by reference to the Company's 1994 Annual Report on Form
               10-K. The August 16, 1996 amendment is incorporated herein by
               reference to the Company's 1996 Annual Report on Form 10-K. The
               August 31, 1997 amendment is incorporated herein by reference to
               the Company's 1997 Annual Report on Form 10-K. The August 31,
               1998 amendment is incorporated herein by reference to the
               Company's 1998 Annual Report on Form 10-K. The August 31, 1999
               amendment is incorporated herein by reference to the Company's
               1999 Annual Report on Form 10-K. The August 2000 amendment is
               incorporated herein by reference to the Company's 2000 Annual
               Report on Form 10-K.

10.8           Richard S. Ressler Stock Purchase Letter, dated February 3, 1999,
               filed as Exhibit 10.4 to the Company's 1998 Annual Report on Form
               10-K.

10.9           Stock Option Agreement between Luke Brown and the Company dated
               November 2, 1999, filed as Exhibit 10.9 to the Company's
               1999 Annual Report on Form 10-K.

10.10          Stock Option Agreement between James Dolan and the Company dated
               November 2, 1999, filed as Exhibit 10.10 to the Company's
               1999 Annual Report on Form 10-K.

10.11          Stock Option Agreement between W. Brian Kretzmer and the Company
               dated August 2, 1999, filed as Exhibit 10.11 to the Company's
               1999 Annual Report on Form 10-K.

10.12          Stock Option Agreement between Sasun Musilyan and the Company
               dated August 2, 1999, filed as Exhibit 10.12 to the Company's
               1999 Annual Report on Form 10-K.

10.13          1996 Non-Employee Directors Stock Option Plan, filed as Exhibit
               10.5 to the Company's 1998 Annual Report on Form 10-K.

10.14          MAI Systems Corporation Amended 1993 Stock Option Plan, filed as
               Exhibit 10.6 to the Company's 1998 Annual Report on Form 10-K.

10.15          Termination/Transition Agreement between Christian Rivadalla
               d/b/a Enterprise Hospitality Solutions and Enterprise Hospitality
               Solutions, Inc., and the Company dated August 2, 1999, filed as
               Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for
               the period ending September 30, 1999.

10.16          Exclusive Worldwide Software License Agreement between Christian
               Rivadalla d/b/a Enterprise Hospitality Solutions and Enterprise
               Hospitality Solutions, Inc., and the Company dated August 20,
               1999, filed as Exhibit 10.5 to the Company's Quarterly Report on
               Form 10-Q for the period ending September 30, 1999.

10.17          Forebearance Agreement between MAI Systems Corporation and CPI
               Securities LP, The Value Realization Fund, L.P., The Canyon Value
               Realization Fund and GRS Partners II dated October 28, 1999,
               filed as Exhibit 10.7 to the Company's Quarterly Report on Form
               10-Q for the period ending September 30, 1999.

10.18          Amendment No. 1 dated February 14, 2000 to Forebearance Agreement
               between MAI Systems Corporation and CPI Securities LP, The Value
               Realization Fund, L.P., The Canyon Value Realization Fund and GRS
               Partners II dated October 28, 1999, filed as Exhibit 10.18 to the
               Company's 1999 Annual Report on Form 10-K.

10.19          Amendment No. 2 dated April 13, 2000 to Forebearance Agreement
               between MAI Systems Corporation and CPI Securities LP, The Value
               Realization Fund, L.P., The Canyon Value Realization Fund and GRS
               Partners II dated October 28, 1999, filed as Exhibit 10.19 to the
               Company's 1999 Annual Report on Form 10-K.

10.20          Amendment Number Five dated April 13, 2000, to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998, filed as Exhibit 10.20 to the Company's
               1999 Annual Report on Form 10-K.

10.21          Stock Option Agreement between Sasun Musilyan and the Company
               dated January 20, 1999, filed as Exhibit 10.21 to the Company's
               1999 Annual Report on Form 10-K.



                                      -24-
<PAGE>   25

10.22          Stock Option Agreement between James Dolan and the Company dated
               March 24, 2000.

10.23          Stock Option Agreement between W. Brian Kretzmer and the Company
               dated March 24, 2000.

10.24          Warrant Agreement between W. Brian Kretzmer and the Company dated
               March 24, 2000, filed as Exhibit 10.1 to the Company's Quarterly
               Report for the period ended June 30, 2000.

10.25          Settlement Agreement dated September 2000 between GetronicsWang
               Co. LLC and Olsy North America, Inc. and MAI Systems Corporation,
               filed as Exhibit 10.2 to the Company's Quarterly Report for the
               period ending September 30, 2000.

10.26          Security Agreement dated September 2000 between GetronicsWang Co.
               LLC and MAI Systems Corporation, filed as Exhibit 10.3 to the
               Company's Quarterly Report for the period ending September 30,
               2000.

10.27          Settlement Agreement dated December 1, 2000 between CSA and MAI
               Systems Corporation.

10.28          Security Agreement dated December 1, 2000 between CSA and MAI
               Systems Corporation.

10.29          Settlement Agreement and Mutual Release and Purchase Agreement
               dated June 30, 2000 between Enterprise Hospitality Solutions,
               Lodging Touch International and Global Enterprise Technology
               Solutions and MAI Systems Corporation and Hotel Information
               Systems, Inc., filed as Exhibit 10.1 to the Company's Quarterly
               Report for the period ended September 30, 2000.

10.30          Consulting Agreement dated July 15, 2000 between Zohar Loshitzer
               and MAI Systems Corporation.

10.31          Amendment Number Six dated September 12, 2000, to the Loan and
               Security Agreement between Coast Business Credit and the Company
               dated April 23, 1998.

10.32          Supplement and Amendment dated January 31, 2001 to Forebearance
               Agreement between MAI Systems Corporation and CPI Securities LP,
               The Value Realization Fund, L.P., The Canyon Value Realization
               Fund and GRS Partners II dated October 28, 1999.

13.1           Portions of the Company's Annual Report to Stockholders for the
               year ended December 31, 2000, but only to the extent such report
               is expressly incorporated by reference into Items 6, 7, 8 and
               14(a)(1) of this report and such report is not otherwise deemed
               to be filed as part of this Annual Report on Form 10-K.

21.1           Subsidiaries of MAI Systems Corporation

23.1           Consent of KPMG LLP

(b)            Reports on Form 8-K during the fourth quarter of 2000
               None.



                                      -25-