<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, 1997

                           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: (714) 598-6000

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

           Securities registered pursuant to Section 12(b) of the Act:
                      Common Stock $0.1 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
25,000,000 shares of $.01 par value Common Stock. As more fully described in
this report, shares of Common Stock are currently being distributed by the
registrant to its former creditors pursuant to its Chapter 11 Plan of
Reorganization. At March 31, 1998, the number of issued and outstanding shares
of the Company's Common Stock was 10,298,539 shares. The aggregate market value
of all of the shares of Common Stock held by non-affiliates of the registrant as
of March 31, 1998 was approximately $31,356,288. 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 1997 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 held May 29, 1998 are incorporated
herein by reference into Part III.

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<PAGE>   2

                                     PART I
ITEM 1. BUSINESS
                                   THE COMPANY

MAI Systems Corporation provides total information technology solutions
primarily to the hospitality, resort and destination industry and to mid-sized
process manufacturers. The solutions provided by the Company typically include
applications software, computer hardware, peripherals and wide and local area
network design, implementation, installation and support. The software
applications are generally the Company's proprietary software, or software which
is licensed to the Company on an exclusive or non-exclusive basis. The hardware,
peripherals and networking systems are generally third-party products which the
Company distributes. Directly and through its arrangement with Olivetti North
America and Olivetti Canada Ltd., the Company provides on-site service and
support to users of its network and systems hardware.

The Company was incorporated under the laws of the State of Delaware on
September 6, 1984. The Company's name was changed from MAI Basic Four, Inc. to
MAI Systems Corporation on November 6, 1990. As used herein, the terms the
"Company" and "MAI" include MAI Systems Corporation and its subsidiaries unless
the context indicates otherwise. The Company commenced operations on January 29,
1985.

                           DESCRIPTION OF THE BUSINESS

MAI's mission is to put in place long-term information technology partnerships
with its 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, it designs, sells, installs and supports information management
solutions featuring complex wide area networks ("WANs") and local area networks
("LANs"). It provides a wide array of products and services to its installed
base of approximately 6,000 customers and continues to make direct sales of
certain products and services which enhance, upgrade and extend the useful life
of the Company's legacy systems.

MAI markets its products and services primarily through a team selling approach,
which utilizes the Company's nationwide network of sales offices. The Company
also markets certain products and services through a limited number of
distributors, independent value-added resellers ("VARs"), authorized service
representatives and independent software vendors ("ISVs").

The Company's activities are conducted principally in the United States, Canada,
the United Kingdom, Hong Kong, Singapore and Mexico. The Company also operates
subsidiaries in Puerto Rico and Venezuela and operates offices in the People's
Republic of China and Malaysia. Additionally, the Company sells its products
through indirect channels in the United States and abroad. These independent
channels include VARs, distributors, ISVs and local sales agents.

The Company provides software support services (both procedural and technical
support) to its hospitality, process manufacturing and gaming systems customers
from its offices in the United States, the United Kingdom and Singapore. In some
countries the Company relies on certain foreign distributors of its products to
provide software support services to customers located within the distributors'
regions.

The Company provides on-site service and help support desk services to its
legacy system customers in the United States, Canada, Puerto Rico and Venezuela.
In the United States and Canada, the Company and its subcontractors, Olivetti
North America, Inc. and Olivetti Canada, Ltd. (sometimes collectively referred
to as "Olivetti"), provide on-site services to the Company's new and legacy
system customers.

PRODUCTS AND SERVICES

In 1997, the Company's revenue was derived from the following sources:

<TABLE>
<CAPTION>
                         Percentage of 
                         Total Revenue
                         -------------
<S>                     <C>  
Hospitality                   46.1%
Process Manufacturing         15.4%
Gaming                         6.5%
Legacy                        28.9%
Other                          3.1%
                           -------
             Total           100.0%
                           =======
</TABLE>

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Products and Services

MAI designs, implements, maintains and supports total information system
solutions utilizing WANs and LANs. In conjunction with these solutions, the
Company's approach is to analyze a customer's information system requirements,
propose a solution and then design, integrate, install and maintain the system.
One of the principal objectives of the Company is to help its 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, the Company
typically continues its relationship with the customer by providing
around-the-clock telephonic support and, through its contracts with Olivetti,
on-site field support. The systems designed by the Company utilize the Company's
property management system for hotels, resorts and destinations and enterprise
resource planning ("ERP") applications software for midsize process
manufacturers, which the Company markets with industry-standard hardware and
software products from leading technology vendors including Cisco Systems,
Compaq Computer, Hewlett Packard, IBM, Data General, Larscom, Microsoft and
Novell.

Hospitality - 46.1%

The Company markets three property management systems. Hotel CompuSystem II has
been marketed by the Company since 1990, when the Company acquired Computerized
Lodging Systems ("CLS"). In August 1996 the Company acquired Hotel Information
Systems, Inc. ("HIS") and began marketing its Paragon product line. In October
1996, the Company became the exclusive distributor of the Lodging Touch
International products from Enterprise Hospitality Solutions. 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 front desk, night audit, housekeeping and numerous other
functions. Additionally, the CLS products interface to more than 250 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 is installed in over 1,500 sites worldwide.

The Paragon property management system, from HIS, is designed to serve the needs
of larger hotels and resorts. Running on IBM AS/400 or System 36 minicomputers,
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 is installed in more than 1,000 hotels and resorts around
the world, and is a major presence in the Pacific Rim.

The Lodging Touch International ("LTI") products comprise a state-of-the-art
suite of products designed to take full advantage of the versatility of
Microsoft's Windows 95 and Windows NT operating systems. They are the industry's
first fully graphical products to fully utilize the features of the Windows NT
operating system and Microsoft Sequel Server. With the LTI products, MAI has
been named a Microsoft Solutions Partner.

Process Manufacturing - 15.4%

MAI develops and markets MANBASE and CIMPRO, both of which are ERP applications,
used by midsize process manufacturers. The Company's 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 the Company's ERP product would be manufacturers
who convert raw milk into cheese and other dairy products, or pharmaceutical
manufacturers who convert raw chemicals into medicinal products. These process
manufacturers have unique requirements in quality control, regulatory
compliance, inventory control and production planning that require an integrated
application and system solution.

CIMPRO, which the Company 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.



                                      -3-

<PAGE>   4

MANBASE, the rights to which the Company 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.

The Company intends to provide continuing support for its MANBASE customers but
will concentrate its sales efforts on the CIMPRO product.

Gaming - 6.5%

The Company markets the Gaming Systems International ("GSI") products for the
gaming industry. GSI's on-line slot accounting and player tracking product is
comprised of a proprietary circuit board which is installed inside electronic
slot machines, and database software which gathers and maintains data collected
by the circuit boards. The Company utilizes Novell-based LANs to link the slot
machines. The GSI system monitors the activity in the individual gaming machines
in real time, providing information on the activity of each machine, the amount
of money in the machine, whether or not the machine is operating properly and
alerting the casino management if the machine has been tampered with. The
software modules include stand-alone player tracking, cage/pit management, table
games accounting, slot maintenance, employee time and attendance, and numerous
other functions.

Legacy - 28.9%

The Company continues to provide principally maintenance services to its
installed base of customers. These products and services are designed to enable
customers to benefit from their investment in the Company's host-based
information systems. The Company's 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 its own personnel and through an outsource agreement with Olivetti North
America, Inc. in the United States and with Olivetti Canada Ltd. in Canada, and
directly in Venezuela and Puerto Rico, the Company offers on-site repair and
warranty service and around-the-clock telephonic support to its customers. The
Company also provides a range of customer education, training and consulting
services for its application software packages and hardware and horizontal
software products. These services are offered to the Company's customers as part
of the Company's strategy of supplying the total information solution to its
customers.

Other - 3.1%

During 1997, the Company closed down a business it had entered in 1996 in which
the Company provided customers outside its core markets with integration and
implementation services. These customers utilized the Company's professional
services, consulting, network and system products and/or partner products, to
re-host their legacy application to modern client/server technology. These
customers did not use the Company's hospitality or process manufacturing
applications, but had an in-house or third party application. The Company no 
longer conducts that business, but it continued to have revenue from contracts 
commenced in 1996 and 1997.

MARKETING AND SALES

MAI markets its products and services primarily through a team-selling approach,
which utilizes the Company's nationwide network of sales offices and its Irvine,
California-based account representatives. The Company also markets certain
products and services through limited numbers of VARs, authorized service
representatives and ISVs.

In the United States, the Company's systems are marketed by a direct sales and
marketing organization which included, as of February 28, 1998, 33 sales and
marketing personnel located in the corporate headquarters and five satellite
offices. In addition, the Company markets its systems internationally through
its subsidiaries which operate in Canada, the United Kingdom, Mexico, Hong Kong,
Singapore, Puerto Rico and Venezuela and through various distributors that are
exclusive in their jurisdictions. The Company's international subsidiaries
employed, as of February 28, 1998, 25 sales and marketing personnel who are
engaged in the marketing of MAI products from sales offices in Canada, Mexico,
the 

                                      -4-
<PAGE>   5

United Kingdom, the Netherlands, Hong Kong, Singapore, Malaysia, the People's
Republic of China and Venezuela. Additionally, the Company also sells its
products through indirect channels both within and outside the United States.
These indirect channels include VARs, distributors, ISVs and local sales agents.

During 1997, the Company's aggregate revenue was derived from geographic areas
as follows:
<TABLE>
<CAPTION>

                         Percentage of Total
                         -------------------
                              Revenues
                              --------
<S>                      <C>  
United States                   80.8%
Pacific Rim                      9.3%
Canada                           6.9%
Other Areas                      3.0%
                               -----
                  Total        100.0%
                               =====
</TABLE>
The financial performance of the Company is affected by the fluctuation in value
of the US dollar in relation to the local currencies of the countries in which
the Company does business. In addition, the Company's 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 19.2% of the Company's 1997 revenues were generated outside the
United States, even though most of this activity is in the Pacific Rim which has
recently incurred significant economic and currency disruptions, the risk 
associated with these foreign operations in relation to the Company's overall 
financial performance is limited.

SUPPORT AND MAINTENANCE

The provision of around-the-clock customer service is a cornerstone of the
Company's business. As of February 28, 1998, the Company had software support
agreements with approximately 2,000 customers. Additionally, it had hardware
maintenance agreements with approximately 4,000 other customers. The Company
employs approximately 45 technicians to provide support for the Company's
applications software products.

Telephonic support, which is primarily to assist licensees of the Company's
applications products, is provided from the Company's response centers located
in Irvine, California, Dallas, Texas, Tarrytown, New York, Singapore and the
United Kingdom. The Company utilizes the latest developments in telephony and
artificial intelligence-enhanced technology to enable its support technicians to
quickly identify and resolve customers' software related computing problems.

The Company's 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 annual cancellation rights and require advance payment of fees to the
Company. Substantially all of the revenue earned by maintenance operations is
invoiced to customers in advance.

PRODUCTION AND PROCUREMENT

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

Delay or failure in the delivery of products or components purchased from third
parties could adversely affect shipments by the Company and its ability to
conclude sales. The Company has purchased many products and components from
single sources of supply. Because the Company's 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 the
Company in the event of any interruption of delivery of a single source
supplier.


                                      -5-

<PAGE>   6
ORDER, SHIPMENT AND BACKLOG

The Company records and enters into backlog a purchase order for equipment and
software when it 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 1997 and 1996:
<TABLE>
<CAPTION>

                                            (dollars in millions)
                                              1997       1996
                                              ----       ----
<S>                                         <C>        <C>    
Orders received (net of cancellations)      $  22.4    $  32.8
Shipments (net of equipment returns)           30.0       23.8
Backlog (at period end)                         8.1       15.7
</TABLE>

The Company's backlog is not necessarily indicative of future revenues. The 1996
Backlog reflects unfulfilled orders acquired from HIS recorded as a backlog
adjustment by the Company. In addition, it includes orders for hardware in the
networking business where the Company no longer competes. Further, in the
second half of 1997, the Company began directing a large portion of the
hardware component of its system sales to its strategic partners.

RESEARCH AND DEVELOPMENT

The Company's 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. The Company also maintains and
expands OpenBASIC, an operating system which enables users of the Company's
proprietary environment, BusinessBASIC, to run their applications under UNIX.
The Company's use of the OpenBASIC application environment and its system
integration capability permits it to have substantial independence from
individual hardware manufacturers and minimizes the need for hardware research
and development.

As of February 28, 1998, the Company employed 41 engineers, programmers and
other technical personnel in research and development activities. During 1995,
1996 and 1997, the Company incurred $2,667,000, $3,117,000, and $5,583,000
respectively, for research and development activities. The Company's research
and development expenditures related primarily to support and enhancement of
existing software products.

CUSTOMERS

The Company's customers in hospitality are generally hotels and resorts with
fifty or more rooms, in gaming are casinos with electronic gaming equipment such
as slot machines, 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 MAI over the years. During 1997, no
single customer accounted for ten percent or more of the Company's 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. The Company
has numerous competitors (and potential competitors, including the manufacturers
of products which the Company distributes) varying widely in their size,
capabilities, market segment and geographic area, many of which are larger and
have financial resources far greater than the Company.

Within its targeted application markets, the Company has positioned itself to
sell complete solutions featuring WANs and LANs to its customers. Within this
marketplace, competition comes primarily from vendors of competing information
technology in the markets in which the Company competes. There are several
providers of information technology to the hotel, resort and destination
industry against which the Company regularly competes. The primary competitors
are of similar size to the Company, and provide technology that is also similar
to the Company. They also cover essentially the same territory, which is
anywhere in the developed world.

The competition in the ERP market is diffuse and new or different competitors
often appear with each sales opportunity. In the lower end of the market, the
Company competes 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, the 

                                      -6-
<PAGE>   7
Company competes with several companies of similar size and technology. On the
high end of the market, the Company competes with companies that are much larger
and have financial resources far greater than the Company.

Within the gaming industry, the Company competes with manufacturers of gaming
equipment. Some of those competitors are substantially larger than the Company.
In the legacy arena, there are some third-party maintenance organizations
("TPMS") who provide service to users of the Company's hardware products. The
competition is minimal, as outside companies cannot provide complete solutions
to the Company's existing proprietary customer base.

TRADEMARKS, COPYRIGHTS AND LICENSES

The Company is the owner or licensee of certain trademarks, copyrights and other
property rights associated with its businesses, including rights associated with
its proprietary application software. The Company owns or has licensing rights,
generally with terms of three years (although the term of the license to the LTI
software is perpetual), to the principal application software products marketed
by the Company. 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 the Company and enter into exclusive
arrangements with, or elect to install their software on systems sold by
competitors of the Company, such vendors generally tend to continue to support
the Company's marketing efforts so long as the Company's systems provide a good
opportunity for them to market their products.

The Company is 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 the Company's option and
certain of the licenses require the Company to make royalty payments.

OpenBASIC and certain other intellectual property formerly owned by the Company
is currently owned by Triple P management BV ("Triple P"), a corporation
organized under the laws of the Netherlands, which acquired the rights from
Application Systems, Inc., a Delaware corporation controlled by the Company's
former bank lenders (the "Banks"), which held the stock of certain of the
Company's former European subsidiaries, originally acquired by the Banks in
connection with the foreclosure described under "Chapter 11 Bankruptcy
Proceedings". MAI retained an exclusive license to use OpenBASIC and other
intellectual property in the western hemisphere and has 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, 1998, the Company had 467 employees, of which 291 were
employed in the United States, 14 in Canada, 10 in Mexico, 10 in Puerto Rico, 4
in the Netherlands, 8 in the United Kingdom, 74 in Asia (Hong Kong, Indonesia,
Malaysia, Singapore and the People's Republic of China) and 56 in Venezuela. The
Company has not experienced any work stoppages and considers its relationship
with its employees to be good.


                        CHAPTER 11 BANKRUPTCY PROCEEDINGS

Prior to its Chapter 11 bankruptcy proceedings, the Company had followed certain
business strategies that eventually led to its defaulting on its and its
Canadian subsidiary's US and Canadian Credit Agreements (the "Credit
Agreements"). Thereafter, shortly before the Company filed for bankruptcy
protection, the Company's banks, parties to the Credit Agreements, foreclosed on
all of the outstanding capital stock of certain of the Company's former European
subsidiaries (the "Foreclosure") in satisfaction of all amounts due under the
Credit Agreements, which, at such date amounted to approximately $84,500,000.

The business strategies of the Company that led to the Foreclosure reflected the
nature of the information technology industry as it existed at that time.
Historically, organizations relied upon proprietary, host-based computing
systems to implement software applications, accounting and financial functions.
The Company, like others in the industry, manufactured and serviced its own
host-based information systems. However, with the declining costs of the
personal computer and developments in the design and implementation of WANs and
LANs, the information technology industry shifted away from centralized,
host-based information systems to a system of workstations or personal computers
sharing data and networked resources over WANs and LANs. This occurred when the
Company had become highly leveraged due to the leveraged acquisition of a
computer maintenance business that the Company had previously owned.


                                      -7-
<PAGE>   8

Eventually, the Company and its subsidiary were in default under its Credit
Agreements, which indebtedness matured on November 16, 1992.

EMERGENCE FROM CHAPTER 11 BANKRUPTCY PROCEEDINGS

On November 18, 1993, the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") entered an order confirming the Company's Plan
of Reorganization. The Company had been operating under Chapter 11 protection
since April 12, 1993. The order was not appealed and became final and
non-appealable on November 29, 1993. On January 27, 1994, the Bankruptcy Court
entered an order which fixed January 27, 1994 as the effective date (the
"Effective Date") of the Plan of Reorganization. The summary of the material
features of the Plan of Reorganization, contained in the Company's 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.

The Plan of Reorganization provided for, among other things, (i) the
satisfaction of substantially all of the unsecured (non-priority) indebtedness
of MAI, Brooke Acquisition Corporation and CLS Software, Inc., the Company's
wholly-owned subsidiaries which were parties to the bankruptcy proceeding (all
of which are collectively referred to as the "Debtors"), through the issuance of
the Company's Common Stock and (ii) the cancellation of existing equity
interests in the Debtors. The Plan of Reorganization also provided for the
substantive consolidation and merger of the Debtors and the corresponding
extinguishment of intercompany liabilities and contracts among the Debtors. At
December 31, 1997, the aggregate amount of tax claims had been reduced to
approximately $970,000 and the Company continues to dispute certain tax claims.

The Company commenced distribution of Common Stock to holders of unsecured
claims on April 14, 1994. The Common Stock is issued pursuant to section 1145 of
the Bankruptcy Code, which contains an exemption from registration under the
Securities Act of 1933, as amended. Through December 31, 1997, the Company had
distributed 6,755,751 shares of Common Stock to its former creditors and the
Company estimated that an approximate additional 65,000 shares will be issued in
settlement of other creditor claims. The Plan of Reorganization provided holders
of unsecured claims the right to elect a limited cash recovery, and through
December 31, 1997, $74,570 in cash had been distributed pursuant to such
provision.

Under the Plan of Reorganization, there is no recovery for holders of the
Company's $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 on the
Effective Date.

Pursuant to the terms of the Plan of Reorganization, the Company filed an
Amended Certificate of Incorporation pursuant to which new shares of Common
Stock were authorized for issuance. Such shares are being issued to holders of
allowed unsecured claims as described above and will also be issued to optionees
under the Company's stock option plans.

                     FACTORS THAT MAY AFFECT FUTURE RESULTS

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 which arise in the
future which may affect the future performance of the Company.

COMPETITION

Competition is vigorous in all sectors of the market for computer-based
solutions and support and maintenance services which the Company offers. The
Company has numerous competitors in each of its business lines, which vary
widely in their size, capabilities, market segments and geographic areas, many
of which are larger and have financial resources far greater than the Company.
Within its markets, competition comes primarily from vendors of competing
information technology in the markets in which it competes. There are several
providers of information technology to the hotel, resort and destination
industry against which the Company regularly competes. The competition in the
ERP market is diffuse and new or different competitors often appear with each
sales opportunity. The Company also competes against local VARs and ISVs, who
usually resell hardware or networking products of larger original equipment
manufacturers, ISOs, which provide service to end users of the Company's
software products, and TPMs, which provide service to users of the Company's
hardware products. Many of the Company's services are also provided by in-house
MIS departments.


                                      -8-


<PAGE>   9

There can be no assurance that the Company can effectively compete with any or
all of its competitors in any of its business lines.

PRODUCTION AND PROCUREMENT

The networking products and services implemented, maintained and supported by
the Company utilize hardware and software products from technology vendors.
Accordingly, the Company is and will remain dependent on the demand for 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 the
Company and its ability to conclude sales. The Company has purchased many
products and components from single sources of supply. Because the Company's
current products are industry standard, management believes that alternative
sources of supply of similar products would be available to the Company in the
event of any interruption of delivery from a single source supplier. However,
there can be no assurances that any such products will be available or be
accepted by the Company's customers.

LIMITED HISTORY OF PROFITABILITY

Prior to the bankruptcy the Company incurred significant operating losses. The
Company was profitable in 1994 and 1995, but then incurred significant losses in
1996 and 1997. There can be no assurance that the Company will be able to
achieve or maintain profitability or avoid losses on a quarterly or annual basis
in the future.

FLUCTUATIONS IN OPERATING RESULTS

A variety of factors may cause period-to-period fluctuations in the Company's
operating results, including the timing of significant orders, the timing of
product enhancements and new product introductions by the Company, its
technology vendors and its competitors, the pricing of the Company's products
and services, competitive conditions and general economic conditions. Many of
the Company's systems 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 revenue will be recognized. As a result, the
operating results of the Company may be materially skewed if a single
transaction is completed earlier or later than expected. The Company has
experienced fluctuations in its operating results and expects to continue to
experience such fluctuations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Fluctuations in operating
results may also result in volatility in the market price of the Common Stock.

LIQUIDITY: VOLATILITY OF STOCK PRICE

Historically, trading volume of the Company's Common Stock has been small, and
the market for the Common Stock has been less liquid than that of many other
publicly traded companies. In August 1995 the Company's Common Stock became
listed on the AMEX under the symbol "NOW". Nevertheless, 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
market price of the Common Stock has been and may continue to be volatile.
Factors such as quarterly fluctuations in the Company's results of operations,
trading volume, the announcement of technological innovations or new products by
the Company or its competitors, general conditions in the computer hardware and
software industries, economic conditions generally, variances between actual
results of operations and the results expected by securities analysts, and the
factors mentioned under "Fluctuations in Operation Results", among other
factors, may have significant impact on the market price of the Common Stock.

RISKS OF CONTRACT SERVICES BUSINESS

The Company is subject to the risks associated with a contract services
business, including dependence on reputation with existing customers, volatility
of workload and dependence on ability to retain qualified technical personnel.
The Company is party to an agreement with Olivetti pursuant to which Olivetti
performs certain field engineering services for the Company. If the quality of
services provided by Olivetti is not perceived as comparable to that previously
provided by the Company, there is a probability that some of the Company's field
service customers will terminate their service agreements.

                                      -9-
<PAGE>   10


RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS AND MARKETS

The Company expects that the market for hospitality, resort and destination
information management systems and information systems for midsize process
manufacturers will continue to be subject to frequent and rapid changes in
technology and customer preferences. Customers may delay purchases in
anticipation of technological changes. In addition, the Company's ability to
develop and market information management and network systems and other new
products is dependent upon its ability to attract and retain qualified
employees. Any failure by the Company 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 the Company's
business and operating results.

DEPENDENCE ON PROPRIETARY TECHNOLOGY

The Company's success is dependent upon its proprietary application software and
its licensing rights to the principal application software products marketed by
it. The Company relies on a combination of contractual rights, copyrights,
trademarks and other property rights to establish or protect its proprietary
rights in its products. There can be no assurance that the steps taken by the
Company in this regard will be adequate to deter misappropriation of its
proprietary rights or independent third party development of functionally
equivalent technology. Although the Company does not believe that it is
infringing on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against the Company in the
future or that any attempt to protect its technology will not be challenged.

DEPENDENCE ON KEY PERSONNEL

Competition for qualified personnel in the software industry is intense and
there can be no assurance that the Company will be able to attract and retain a
sufficient number of qualified employees. As the business of the Company grows,
it may become increasingly difficult for it to hire, train and assimilate the
new employees needed. The Company's success depends to a significant degree upon
the continued contributions of its key management, marketing, product
development and operational personnel.

The services of Richard S. Ressler, Chairman of the Board and Director of the
Company, are provided on a non-exclusive basis pursuant to an agreement which
expires in August 1998. There can be no assurances that Mr. Ressler will
continue with the Company after such date or that the Company will be able to
find a replacement in the event that either the Company or Mr. Ressler
determines not to continue their relationship.

RISK OF FOREIGN OPERATIONS

The financial performance of the Company is affected by the fluctuation in the
value of the US dollar in relation to the local currencies of the countries in
which the Company does business. In addition, the Company's 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.

YEAR 2000 COMPLIANCE RISKS

The Year 2000 compliance issue arises from the fact that a significant
percentage of the software utilized by United States businesses relies on
two-digit date codes to perform computations and decision-making functions.
Commencing on January 1, 2000, these computer programs may fail from an
inability to interpret date codes properly, misinterpreting "00" as the year
1900 rather than 2000. The Company is currently in the process of evaluating its
information technology systems for year 2000 compliance and believes that most
of its operating systems have been modified to address Year 2000 issues. At this
time, the Company does not believe that the costs associated with implementing
its Year 2000 compliance plan will be material to the Company's financial
condition or operations.

The Company does not currently have any information concerning the Year 2000
compliance of its key suppliers or customers. In the event that any of the
Company's key suppliers or customers do not successfully and timely achieve Year
2000 compliance, the Company's business or operations could be adversely
affected. The Company's Year 2000 compliance plan will address the Year 2000
compliance status of key suppliers, customers and other third parties. The
Company has designed and tested the most current versions of its products to be
Year 2000 compliant. However, some of the Company's customers are running
earlier product versions that are not Year 2000 compliant. Although the Company
has been encouraging such customers to upgrade to current product versions, no
assurance can be given that all of them will do so in a timely manner, if at
all. Moreover, the Company also relies on certain software that it licenses 

                                      -10-


<PAGE>   11

from third parties, including software that is integrated with internally
developed software and is used in the Company's products to perform key
functions. There can be no assurance that such third party software will be free
of errors and defects or be Year 2000 compliant. Although the Company has not
experienced any product liability claims to date regarding year 2000 compliance,
there can be no assurance that errors or defects, whether associated with Year
2000 functions or otherwise, will not result in product liability claims against
the Company in the future. The Company's license agreements with customers
typically contain provisions designed to limit the Company's exposure to
potential product liability claims; however, it is possible that such limitation
of liability provisions may not be effective under the laws of certain
jurisdictions. Defective products or releases could result in loss of revenues,
increased service and warranty costs and product liability claims, and could
adversely affect the Company's market penetration and reputation, any of which
could have a material adverse effect on the Company's business, financial
condition and results of operations.

ITEM 2.  PROPERTIES

As of February 28, 1998, the principal properties utilized by the Company were
as follows:
<TABLE>
<CAPTION>

                                                                                      Approximate
                                  Type of Facility                                 Total Square Footage    Location
                                  ----------------                                 --------------------    --------
<S>                                                                                <C>                    <C>
Corporate and Hospitality Headquarters, warehousing, administration, marketing,
  sales, development and support                                                              50,210      Irvine, California
Product development, sales and support                                                         8,911      Concord, California
Product development, sales and support                                                         6,558      Irving, Texas
Process Manufacturing headquarters, marketing, sales, development, and support                16,370      Tarrytown, New York
Gaming Systems International headquarters, marketing, sales, development, 
  support and warehousing                                                                     12,150      Las Vegas, Nevada
MAI Canada Ltd. Administration, sales, education, warehousing, test and repair                24,150      Markham, 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                                                                                      3,000      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 offices in three additional locations in the United
States, one additional location in Canada and seven other locations around the
world. Generally such leases are for terms of five years or less, although
several of the leases in the United States are for terms of one year or less.

ITEM 3.  LEGAL PROCEEDINGS

The Company has filed and will continue to file objections to claims asserted in
its Chapter 11 bankruptcy proceedings. The majority of these claims would, if
upheld, give rise to allowed unsecured claims entitling respective claimants to
distributions of new Common Stock. A number of filed objections in respect of
secured claims, priority claims, tax claims, convenience claims and cure claims
are still outstanding at December 31, 1997. To the extent the Company's
objections to such claims are not sustained, the Company will be obligated to
pay such claims in a lump sum in the case of convenience claims and
administrative claims, and in the case of secured claims, priority claims, tax
claims and cure claims, on a deferred basis over six to seven years, depending
on the type of claim, at an interest rate of 6% in accordance with the Plan of
Reorganization. The Company does not believe the outcome of these objections
will be material.

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

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

None

                                      -11-
<PAGE>   12
                                     PART II

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

The Company's 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,
the Company's shares were traded over-the-counter by various market makers under
the ticker symbol "MAIS".

The Company's Common Stock was issued pursuant to an order of the Bankruptcy
Court dated January 27, 1994. In addition, all previously outstanding equity
interests were canceled. Until April 10, 1993, the principal market for the
Company's previously outstanding common stock (the "Old Common Stock") was the
New York Stock Exchange, where the common stock was traded under the ticker
symbol "MCO". Thereafter, until November 18, 1993, the Company's Old Common
Stock was traded over-the-counter by various market makers.

No cash dividends have been paid to date on the Common Stock. At March 31,
1998, there were 590 stockholders of record.

<TABLE>
<CAPTION>

Period                                                    High        Low
------                                                    ----        ---
<S>                                                   <C>         <C>     
Fiscal 1996:
         First Quarter ............................   $    7.88   $   6.13
         Second Quarter ...........................   $   10.63   $   5.63
         Third Quarter ............................   $    9.50   $   6.75
         Fourth Quarter ...........................   $    8.81   $   5.50

Fiscal 1997:
         First Quarter ............................   $    8.00   $   6.00
         Second Quarter ...........................   $    6.13   $   3.75
         Third Quarter ............................   $    4.88   $   2.94
         Fourth Quarter ...........................   $    4.13   $   2.50

Fiscal 1998:
         First Quarter Through February 28, 1998 ..   $    3.31   $   1.44
</TABLE>

On March 3, 1997, at the same time that it issued its 11% subordinated debt to
four investment funds managed by Canyon Capital Management LP ("Canyon"), the
Company issued to such investment funds detachable warrants to purchase 750,000
shares of the Company's Common Stock at $8.00 per share, and sold as 400,000
shares of the Company's Common Stock for $6.50 per share. The purchase price for
the shares of Common Stock was paid in cash. At the time of issuance of the
detachable warrants, the Company recorded an original issue discount of
$1,027,000 (which represented the fair value of the warrants at the time of
issuance) on the subordinated notes. The fair value of the warrants was
recorded as a reduction in the face value of the subordinated notes.

On March 6, 1997, the Company issued warrants to purchase 50,000 shares of the
Company's Common Stock at $7.50 per share to Orchard Capital Corporation
("Orchard") (which Orchard subsequently transferred to Richard S. Ressler,
Chairman of the Company). These warrants were issued as additional compensation
under the consulting agreement, dated April 15, 1994, as amended, between
Orchard and the Company, pursuant to which Orchard provides the services of Mr.
Ressler.

On September 4, 1997, the Company issued 157,895 shares of its Common Stock to
Mr. Ressler, upon his exercise of previously outstanding warrants, exercisable
at $1.90 per share in cash, and on September 8, 1997, the Company issued 398,510
shares of its Common Stock to Mr. Ressler in payment for services rendered
pursuant to the consulting agreement between Orchard and the Company.

Additionally, in order to induce exercises, on September 12, 1997, the Company
temporarily re-priced all of its outstanding "out of the money" warrants to an
exercise price of $3.04 per share. As a result, holders of warrants, being Mr.
Ressler with respect to 50,000 warrants, and the four Canyon investment funds
with respect to 750,000 warrants, exercised such warrants and acquired an
aggregate of 800,000 shares of the Company's Common Stock at $3.04 per share.
Such exercises were paid in cash except that the investment funds paid a portion
of the consideration for their shares by surrendering $750,000 aggregate
principal of promissory notes of the Company (which were credited at the


                                      -12-

<PAGE>   13
principal amount together with accrued interest). This use of notes to pay a
portion of the warrant exercise price was authorized by the terms of the
warrants and notes. Such issuances closed on September 18, 1997.

The foregoing issuances were made in transactions exempt under Section 4(2)
under the Securities Act of 1933, as transactions not involving any public
offering. The shares issued were legended and appropriate investment
representations were obtained from the purchases.

ITEM 6.   SELECTED FINANCIAL INFORMATION

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

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURS ABOUT MARKET RISK

Not applicable.

ITEM 8.   CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference to the
Company's Annual Report under the headings, "Consolidated Balance Sheets",
"Consolidated Statements of Operations", Consolidated Statement of Stockholders'
Equity (Deficiency)", "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.

                                    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 May 29, 1998. 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 May 29, 1998. 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 May 29, 1998. Such information is incorporated herein by reference.


                                      -13-
<PAGE>   14

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 May 29, 1998. 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 May 29, 1998. Such information is
incorporated herein by reference.


                                     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)
                  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 1997
                      Annual Report.

                  Schedule II       Valuation and Qualifying Accounts

                  3.       Exhibits:

<TABLE>
<CAPTION>
Number            Exhibit
------            -------
<S>               <C>                                                            
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 9-K dated February 9, 1994.

3.1               Amended and Restated Certificate of Incorporation of MAI
                  Systems Corporation, as 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 as 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.

10.1              Stock Option Agreement between George G. Bayz and the
                  Registrant dated September 12, 1997.

10.2              Stock Option Agreement between Lewis H. Stanton and the
                  Registrant dated February 10, 1997.

10.3              Stock Option Agreement between Lewis H. Stanton and the
                  Registrant dated September 12, 1997.
</TABLE>

                                      -14-

<PAGE>   15
<TABLE>
<S>               <C>                                                     
10.4              Stock Option Agreement between Richard DeMayo and the
                  Registrant dated September 12, 1997.

10.5              Stock Option Agreement between Luke Brown and the Registrant
                  dated September 12, 1997.

10.6              Stock Option Agreement between Luke Brown and the Registrant
                  dated September 12, 1997.

10.7              Registration Rights Agreement dated as of September 8, 1997 by
                  and between the Registrant and Orchard Capital Corporation and
                  Richard S. Ressler, Chairman of the Board.

10.8              Consulting Agreement dated as of August 15, 1994, as amended
                  as of October 17,1994, August 16, 1996 and August 31, 1997 by
                  and between Registrant 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.

10.9              Warrant dated March 6, 1997 covering 50,000 shares of the
                  Registrant's common stock and issued by the Registrant to
                  Orchard Capital Corporation (Richard S. Ressler).

10.10             Note Purchase Agreement dated March 3, 1997 between the
                  Registrant and The Value Realization Fund, L.P., Canyon Value
                  Realization Fund (Cayman), Ltd., GRS Partners II and CPI
                  Securities L.P. 

10.11             Amendment No. 1 dated May 6, 1997 to Note Purchase Agreement
                  between the Registrant and The Value Realization Fund, L.P.
                  Canyon Value Realization Fund, Ltd., GRS Partners II and CPI
                  Securities, L.P.

10.12             Registration Rights Agreement dated February 13, 1997 between
                  Registrant and The Value Realization Fund, L.P., Canyon Value
                  Realization Fund (Cayman), Ltd., GRS Partners II and CPI
                  Securities, L.P.

10.13             MAI Systems Corporation Amended 1993 Stock Option Plan.

10.14             MAI Systems Corporation Amended 401(k) Plan.

13.1              Portions of the Company's Annual Report to Stockholders for
                  the year ended December 31, 1997, 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 Peat Marwick LLP.

27.1              Financial Data Schedule Year Ended 1997.

27.2              Financial Data Schedule Restated Year Ended 1995.

              (b) Reports on Form 8-K during the fourth quarter of 1997.

                  None.
</TABLE>


                                      -15-

<PAGE>   16

                                   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/ RICHARD S. RESSLER
                                                  ------------------------------
                                                  Richard S. Ressler
                                                  Chairman
Dated:  April 15, 1998

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 April 15, 1998.

<TABLE>
<CAPTION>

       Signatures                     Title
       ----------                     -----

<S>                                   <C>
/s/RICHARD S. RESSLER                 Chairman, Director
---------------------------
Richard S. Ressler


/s/GEORGE G. BAYZ                     President and Chief Executive Officer, 
---------------------------           Director
George G. Bayz


/s/ZOHAR LOSHITZER                    Director
---------------------------
Zohar Loshitzer


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


/s/LEWIS H. STANTON                   Executive Vice President and Chief 
---------------------------           Operating and Financial Officer
Lewis H. Stanton                      (Chief Accounting Officer)

</TABLE>
 

                                      -16-


<PAGE>   17
                                 EXHIBIT INDEX
<TABLE>
<CAPTION>

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

<S>               <C>     
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 9-K dated February 9, 1994.

3.1               Amended and Restated Certificate of Incorporation of MAI
                  Systems Corporation, as 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 as 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.

10.1              Stock Option Agreement between George G. Bayz and the
                  Registrant dated September 12, 1997.

10.2              Stock Option Agreement between Lewis H. Stanton and the
                  Registrant dated February 10, 1997.

10.3              Stock Option Agreement between Lewis H. Stanton and the
                  Registrant dated September 12, 1997.
</TABLE>

                                      -17-

<PAGE>   18
<TABLE>
<S>               <C>                                                     
10.4              Stock Option Agreement between Richard DeMayo and the
                  Registrant dated September 12, 1997.

10.5              Stock Option Agreement between Luke Brown and the Registrant
                  dated September 12, 1997.

10.6              Stock Option Agreement between Luke Brown and the Registrant
                  dated September 12, 1997.

10.7              Registration Rights Agreement dated as of September 8, 1997 by
                  and between the Registrant and Orchard Capital Corporation and
                  Richard S. Ressler, Chairman of the Board.

10.8              Consulting Agreement dated as of August 15, 1994, as amended
                  as of October 17,1994, August 16, 1996 and August 31, 1997 by
                  and between Registrant 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.

10.9              Warrant dated March 6, 1997 covering 50,000 shares of the
                  Registrant's common stock and issued by the Registrant to
                  Orchard Capital Corporation (Richard S. Ressler).

10.10             Note Purchase Agreement dated March 3, 1997 between the
                  Registrant and The Value Realization Fund, L.P., Canyon Value
                  Realization Fund (Cayman), Ltd., GRS Partners II and CPI
                  Securities L.P. 

10.11             Amendment No. 1 dated May 6, 1997 to Note Purchase Agreement
                  between the Registrant and The Value Realization Fund, L.P.
                  Canyon Value Realization Fund, Ltd., GRS Partners II and CPI
                  Securities, L.P.

10.12             Registration Rights Agreement dated February 13, 1997 between
                  Registrant and The Value Realization Fund, L.P., Canyon Value
                  Realization Fund (Cayman), Ltd., GRS Partners II and CPI
                  Securities, L.P.

10.13             MAI Systems Corporation Amended 1993 Stock Option Plan.

10.14             MAI Systems Corporation Amended 401(k) Plan.

13.1              Portions of the Company's Annual Report to Stockholders for
                  the year ended December 31, 1997, 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 Peat Marwick LLP.

27.1              Financial Data Schedule Year Ended 1997.

27.2              Financial Data Schedule Restated Year Ended 1995.

</TABLE>


                                      -18-

<PAGE>   19
                                  SCHEDULE II

                       VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 1995, 1996 and 1997
                             (dollars in thousands)

ADDITIONS

<TABLE>
<CAPTION>
                                    BALANCE    CHARGED TO    CHARGED TO    ADDITIONS                BALANCES
                                   BEGINNING   COSTS AND       OTHER         FROM                    END OF
                                    OF YEAR     EXPENSES      ACCOUNTS    ACQUISITIONS  WRITE-OFFS    YEAR
                                   ---------   ----------    ----------   ------------  ----------  --------
<S>                                <C>         <C>           <C>          <C>           <C>         <C>
Year ended December 31, 1995
Allowance for doubtful accounts    $ 2,588       $  613         $ --         $   --      $ (2,109)   $ 1,092
Provision for inventory
  obsolescence                     $15,980       $  734         $ --         $   --      $ (1,578)   $15,136
                                   =======       ======         ====         ======      ========    =======

Year ended December 31, 1996
Allowance for doubtful accounts    $ 1,092       $  603         $ --         $1,138      $   (255)   $ 2,578
Provision for inventory
  obsolescence                     $15,136       $  490         $ --         $   --      $(12,433)   $ 3,193
                                   =======       ======         ====         ======      ========    =======

Year ended December 31, 1997
Allowance for doubtful accounts    $ 2,578       $    6         $ --         $  646      $ (1,247)   $ 1,983
Provision for inventory
  obsolescence                     $ 3,193       $1,174         $ --         $   --      $ (2,197)   $ 2,170
                                   =======       ======         ====         ======      ========    =======
</TABLE>


                                           S-1