<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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 Office)


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

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

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.

 Yes         No
 [X]        [ ]

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 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     No
   [X]     [ ]

As of July 25, 2000, 10,842,071 shares of the registrant's Common Stock, $0.01
par value, were outstanding.

================================================================================

<PAGE>   2
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             MAI Systems Corporation
                      Condensed Consolidated Balance Sheets
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 December 31,      June 30,
                                                                     1999            2000
                                                                  ---------       ---------
                                                                    (dollars in thousands)
<S>                                                               <C>             <C>
ASSETS
Current assets:
     Cash                                                         $   2,645       $   1,097
     Receivables, less allowance for doubtful accounts
           of $3,622 in 1999 and $3,315 in 2000                       7,189           5,419
     Inventories                                                        625             465
     Notes receivable, less deferred gain of $1,227                   2,700           2,700
     Prepaids and other assets                                          782           1,194
                                                                  ---------       ---------

              Total current assets                                   13,941          10,875

Furniture, fixtures and equipment, net                                2,609           2,306
Intangibles, net                                                      7,974           6,676
Other assets                                                            106             118
                                                                  ---------       ---------

              Total assets                                        $  24,630       $  19,975
                                                                  =========       =========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
     Bridge Loan                                                  $   1,450       $     700
     Current portion of long-term debt                                  447             298
     Accounts payable                                                10,705           9,611
     Customer deposits                                                2,236           1,492
     Accrued liabilities                                              5,136           3,932
     Income taxes payable                                               575             422
     Unearned revenue                                                 7,773           7,654
                                                                  ---------       ---------

              Total current liabilities                              28,322          24,109

Line of credit                                                        2,892           2,939
Long-term debt                                                        5,270           5,263
Other liabilities                                                       715             730
                                                                  ---------       ---------

              Total liabilities                                      37,199          33,041
                                                                  ---------       ---------

Stockholders' deficiency:
     Preferred Stock, par value $0.01 per share; 1,000,000
         shares authorized, none issued and outstanding                  --              --
     Common Stock, par value $0.01 per share; authorized
         24,000,000 shares; 10,906,658 shares issued and
         issuable at December 31, 1999 and June 30, 2000                112             112
     Additional paid-in capital                                     220,567         220,567
     Accumulated other comprehensive income                             494             884
     Accumulated deficit                                           (233,742)       (234,629)
                                                                  ---------       ---------

              Total stockholders' deficiency                        (12,569)        (13,066)
                                                                  ---------       ---------

              Total liabilities and stockholders' deficiency      $  24,630       $  19,975
                                                                  =========       =========
</TABLE>



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



                                      -2-
<PAGE>   3
                             MAI Systems Corporation
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                         For the Three Months Ended      For the Six Months Ended
                                                                    June 30,                     June 30,
                                                             1999           2000           1999          2000
                                                           --------       --------       --------       --------
                                                           (in thousands, except        (in thousands, except per
                                                               per share data)                 share data)
<S>                                                        <C>            <C>            <C>            <C>
Revenue
     Software, networks and professional services:
           Software sales                                  $  3,448       $  1,791       $  8,293       $  3,364
           Network and computer equipment                     2,210            273          3,085            918
           Professional  services                             8,010          6,253         15,197         11,349
                                                           --------       --------       --------       --------
                                                             13,668          8,317         26,575         15,631

     Legacy revenue                                           2,617          1,600          5,794          3,258
                                                           --------       --------       --------       --------

                    Total revenue                            16,285          9,917         32,369         18,889

Direct costs                                                  7,212          4,578         14,228          9,373
                                                           --------       --------       --------       --------

                    Gross profit                              9,073          5,339         18,141          9,516

Selling, general and administrative expenses                  6,225          2,963         12,061          6,257
Research and development costs                                1,205          1,155          2,407          2,198
Amortization and impairment of intangibles                      599            642          1,209          1,297
Other operating (income) expense, net                           (69)            21           (110)            58
                                                           --------       --------       --------       --------

                    Operating income (loss)                   1,113            558          2,574           (294)

Equity in net income of unconsolidated subsidiaries              13             --             28             --
Interest income                                                  33             97             63            155
Interest expense                                               (353)          (387)          (650)          (748)
                                                           --------       --------       --------       --------

                    Income (loss) before income taxes           806            268          2,015           (887)
Provision for income taxes                                       --             --             --             --
                                                           --------       --------       --------       --------

Net income (loss)                                          $    806       $    268       $  2,015       $   (887)
                                                           ========       ========       ========       ========

Income (loss) per share:


Basic income (loss) per share                              $   0.07       $   0.02       $   0.18       $  (0.08)
                                                           ========       ========       ========       ========


Diluted income (loss) per share                            $   0.07       $   0.02       $   0.18       $  (0.08)
                                                           ========       ========       ========       ========

Weighted average common shares used in
  determining income (loss) per share:

     Basic                                                   10,907         10,907         10,871         10,907
                                                           ========       ========       ========       ========

     Diluted                                                 11,019         10,986         10,983         10,907
                                                           ========       ========       ========       ========
</TABLE>



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



                                      -3-
<PAGE>   4
                             MAI Systems Corporation
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                 For the Six Months Ended
                                                                          June 30,
                                                                  (in thousands, except
                                                                      per share data)
                                                                   1999          2000
                                                                  -------       -------
<S>                                                               <C>           <C>
Net cash provided by (used in) operating activities               $   726       $  (553)
                                                                  -------       -------
Cash flows from investing activities:

         Capital expenditures                                        (751)         (172)
         Capitalized software costs                                  (468)           --
                                                                  -------       -------

Net cash used in investing activities                              (1,219)         (172)
                                                                  -------       -------

Cash flows from financing activities:

         Short-term borrowings, net                                    31            47
         Proceeds from issuance of common stock, net                  500            --
         Repayments of long-term debt                                  --          (156)
         Repayments of Bridge Loan                                     --          (750)
         Proceeds from the exercise of stock
           options and warrants                                         9            --
                                                                  -------       -------

Net cash provided by (used in) financing activities                   540          (859)
                                                                  -------       -------
Effect of exchange rate changes on cash and cash equivalents          (23)           36
                                                                  -------       -------
Net change in cash and cash equivalents                                24        (1,548)
                                                                  -------       -------

Cash and cash equivalents at beginning of period                    2,029         2,645
                                                                  -------       -------

Cash and cash equivalents at end of period                        $ 2,053       $ 1,097
                                                                  =======       =======
</TABLE>



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


                                      -4-

<PAGE>   5
                             MAI Systems Corporation
              Notes to Condensed Consolidated Financial Statements
                         Six Months ended June 30, 2000
                                  (Unaudited)

1.      BASIS OF PRESENTATION

        Companies for which this report is filed are MAI Systems Corporation and
        its wholly-owned subsidiaries (the "Company"). The information contained
        herein is unaudited, but gives effect to all adjustments (which are
        normal recurring accruals) necessary, in the opinion of Company
        management, to present fairly the condensed consolidated financial
        statements for the interim period. All significant intercompany
        transactions and accounts have been eliminated in consolidation.

        Although the Company believes that the disclosures in these financial
        statements are adequate to make the information presented not
        misleading, certain information and footnote disclosures normally
        included in financial statements prepared in accordance with generally
        accepted accounting principles have been condensed or omitted pursuant
        to the rules and regulations of the Securities and Exchange Commission
        (the "SEC"), and these financial statements should be read in
        conjunction with the financial statements included in the Company's
        Annual Report on Form 10-K for the year ended December 31, 1999, which
        is on file with the SEC.

2.      INVENTORIES

        Inventories are summarized as follows:


<TABLE>
<CAPTION>
                             December 31,         June 30,
                                1999               2000
                             ------------         -------
                                 (dollars in thousands)
<S>                          <C>                  <C>
Finished goods                  $251               $176
Replacement parts                374                289
                                ----               ----
                                $625               $465
                                ====               ====
</TABLE>

3.      PLAN OF REORGANIZATION

        In 1993, the Company emerged from a voluntary proceeding under the
        bankruptcy protection laws. Notwithstanding the confirmation and
        effectiveness of its Plan of Reorganization (the "Plan"), the Bankruptcy
        Court continues to have jurisdiction to resolve disputed pre-petition
        claims against the Company to resolve matters related to the
        assumptions, assignment or rejection of executory contracts pursuant to
        the Plan and to resolve other matters that may arise in connection with
        the implementation of the Plan.

        Shares of common stock may be distributed by the Company to its former
        creditors. As of July 25, 2000, 6,758,251 shares of Common Stock had
        been issued pursuant to the Plan and were outstanding. The Company
        estimates that approximately 6,820,338 shares will have been issued to
        creditors at completion of the Plan.

4.      BUSINESS ACQUISITIONS

        HOTEL INFORMATION SYSTEMS, INC. ("HIS"):

        During 1996, the Company entered into arbitration proceedings regarding
        the purchase price of HIS. The Company placed approximately 1,100,000
        shares of Common Stock issued in connection with the acquisition of HIS
        in an escrow account to be released in whole, or in part, upon final
        resolution of post closing adjustments.



                                      -5-
<PAGE>   6
        In November 1997, the purchase price for the acquisition of HIS was
        reduced by $931,000 pursuant to arbitration proceedings. As a result,
        goodwill was reduced $931,000 and approximately 100,650 price protected
        shares will be released from the escrow account and returned to the
        Company. In addition, further claims relating to legal costs and certain
        disbursements currently estimated at approximately $650,000 are
        presently pending. Resolution of such claims may result in release of
        additional escrow shares to the Company. The amount and number of shares
        will be determined based on the final resolution of such claims.
        Accordingly, as of June 30, 2000, the final purchase price has not been
        determined.

        The Company will, as needed, pursuant to the asset purchase agreement
        and related documents, issue additional shares of Common Stock in order
        that the recipients ultimately receive shares worth a fair value of
        $9.25 per share (subject to increase in such amount to approximately
        $12.56 per share). This adjustment applies to a maximum of 590,785
        shares of Common Stock (see Note 10).

5.      BUSINESS DIVESTITURE

        On June 19, 1999, the Company sold its wholly owned subsidiary Gaming
        Systems International ("GSI") for an amount in excess of its book value.
        The Company received three promissory notes totaling $4,925,000 with
        face values of $1,100,000, $1,500,000 and $2,325,000, respectively.
        Interest is paid monthly at the rate of 10% per annum on both the
        $1,100,000 and $1,500,000 notes, with the principal due and payable on
        June 19, 2001 and June 19, 2003, respectively. The $1,100,000 promissory
        note is guaranteed by a third party. Principal payments and interest, at
        prime plus 1%, commence for the $2,325,000 promissory note on October 1,
        2002 in 48 monthly installments of approximately $48,000 of principal,
        plus accrued interest.

        Imputing interest at a rate of 10%, the present value of the $2,325,000
        promissory note at the date of sale was $1,682,000 resulting in a
        combined carrying value of $4,282,000 for all three promissory notes.
        The Company is amortizing the imputed interest over the contractual life
        of the promissory notes using the interest method. The gain on sale of
        $1,227,000 has been deferred until collection of the proceeds
        representing the gain can be assured. The promissory notes are currently
        held for sale and the Company has executed a letter of intent with a
        third party to sell the notes at an amount approximately $355,000 less
        than the carrying value of such notes. Accordingly, the promissory notes
        have been written down to their estimated net realizable value of
        $2,700,000 and are classified as current in the accompanying
        consolidated balance sheets.

        Summarized below is historical financial information about GSI (in
        thousands):

<TABLE>
<CAPTION>
                                                  January 1, 1999 -
                                                    June 19, 1999
<S>                                               <C>
         Revenue                                        $1,696
         Operating  income                                  80
         Total assets at period end                      3,800
</TABLE>


6.      LINE OF CREDIT, BRIDGE LOAN AND LONG-TERM DEBT

        On July 28, 1999, the Company obtained a Bridge Loan from Coast Business
        Credit ("Coast") in the amount of $2,000,000. The Bridge Loan originally
        boar interest at prime plus 5% (prime plus 8% when default interest
        rates apply) and was payable interest only on a monthly basis with all
        accrued and unpaid principal and interest due on the earlier of June 30,
        2000 or the date the Company receives a debt or equity infusion of at
        least $10,000,000. Loan origination fees of $75,000 paid to Coast in
        connection with the Bridge Loan are included in prepaids and other
        assets and are being amortized to interest expense over the term of the
        loan. 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, the Company began making weekly principal payments
        of $25,000 on the Bridge Loan commencing in September 1999. During the
        default period, the Company also paid $40,000 in default fees to Coast
        in 1999 and $30,000 in 2000.


        In April 1998, the Company negotiated a $5,000,000 secured revolving
        credit facility with Coast. The availability of this facility is based
        on a calculation using a rolling average of certain cash collections.
        The facility was amended on July 28, 1999 to allow for aggregate
        borrowings on an interest only basis under the credit facility and
        Bridge Loan not to exceed $6,000,000. The facility is secured by all
        assets, including intellectual property of the Company, and bears



                                      -6-
<PAGE>   7
        interest at prime plus 2.25% (prime plus 5.25% when default interest
        rates apply) and expires on April 30, 2002. The facility was again
        amended on April 13, 2000. In accordance with the amendment, the Bridge
        Loan and the credit facility bear interest at prime plus 4.5% and
        require $35,000 weekly principal payments on the Bridge Loan until it is
        paid in full. As of June 30, 2000, the unpaid balance of the Bridge Loan
        was $700,000. Additionally, the credit facility was amended to allow for
        aggregate borrowings on an interest only basis under the credit facility
        not to exceed $3,360,000. In connection with the amendment, Coast waived
        all existing defaults. Additionally, the Company will pay Coast a fee of
        $300,000. This fee will be paid by the Company in weekly installments of
        $35,000 commencing after the Bridge Loan is paid in full. The facility
        contains various restrictions and covenants, including a minimum
        consolidated net worth, debt coverage ratio and minimum quarterly
        profitability. The Company was in compliance with these covenants as of
        June 30, 2000.

        At December 31, 1999 and June 30, 2000, approximately $2,892,000 and
        $2,939,000, respectively, was available and drawn down under the credit
        facility.


        Loan restructuring fees of $300,000 were incurred in connection with the
        line of credit and Bridge Loan, are classified in prepaids and other
        current assets and are being amortized to interest expense over the term
        of the facility.

        In March 1997 the Company 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 indebtness 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 3, 1999, the Company failed to make the
        semi-annual interest payment due on that date in the amount of $288,750.
        Accrued interest on the subordinated notes payable is $446,000 as of
        June 30, 2000.

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

        On April 13, 2000, the Company entered into an agreement with Canyon
        which waived all existing events of default, accelerated the 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. Upon
        repayment of the Bridge Loan, the Company will be required to pay Canyon
        weekly interest payments of $25,000 until all interest on the
        subordinated notes is paid in full. Thereafter, the Company will pay
        weekly interest payments of approximately $11,000.

7.      COMMON STOCK

        On February 3, 1999, the Company's Chairman purchased 201,106 shares of
        the Company's Common Stock valued at $500,000.

8.      INCOME (LOSS) PER SHARE OF COMMON STOCK

        Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings
        Per Share". This statement replaces the previously reported primary and
        fully diluted earnings per share with basic and diluted earnings per
        share. Unlike primary earnings per share, basic earnings per share
        excludes any dilutive effects of options. Diluted earnings per share is
        very similar to the previously reported fully diluted earnings per
        share.

        Basic and diluted loss per share is computed using shares of common
        stock issued to date and expected to be issued in accordance with the
        Plan of Reorganization ("Common Stock") as discussed in Note 3. As of
        June 30, 2000, 6,758,251 shares had been issued pursuant to the Plan of
        Reorganization. All outstanding options and warrants have been excluded
        from diluted loss per share for loss periods presented as their effect
        would be anti-dilutive.



                                      -7-
<PAGE>   8
        The following table illustrates the computation of basic and diluted
        earnings (loss) per share under the provisions of SFAS 128:


<TABLE>
<CAPTION>
                                                  For The Three Months Ended        For The Six Months Ended
                                                           June 30,                         June 30,
                                                    1999            2000              1999             2000
                                                  --------         --------         --------         --------
                                                  (in thousands, except per         (in thousands, except per
                                                         share data)                       share data)
<S>                                               <C>              <C>              <C>              <C>
Numerator:

Numerator for basic and diluted earnings
   (loss) per share - net (loss) income           $    806         $    269         $  2,015         $   (887)
                                                  ========         ========         ========         ========

Denominator:

Denominator for basic earnings (loss) per
   share-weighted average number of
   common shares outstanding during
   the period                                       10,907           10,907           10,871           10,907

Incremental common shares attributable
   to exercise of outstanding options                  112               79              112               --
                                                  --------         --------         --------         --------

Denominator for diluted earnings (loss)
   per share                                        11,019           10,986           10,983           10,907
                                                  ========         ========         ========         ========

Basic earnings (loss) per share                   $   0.07         $   0.02         $   0.18         $  (0.08)
                                                  ========         ========         ========         ========

Diluted earnings (loss) per share                 $   0.07         $   0.02         $   0.18         $  (0.08)
                                                  ========         ========         ========         ========
</TABLE>


9.      ACCOUNTING PRONOUNCEMENTS

        In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
        Instruments and Hedging Activities." SFAS No. 133, as amended, is
        effective for transactions entered into after January 1, 2001. This
        statement requires that all derivative instruments be recorded on the
        balance sheet at fair value. Changes in the fair value of derivatives
        are recorded each period in current earnings or other comprehensive
        income, depending on whether a derivative is designated as part of a
        hedge transaction and the type of hedge transaction. The ineffective
        portion of all hedges will be recognized in earnings. The Company is in
        the process of determining the impact that the adoption of SFAS No. 133
        will have on its results of operations and financial position.

        In December 1999, the SEC staff issued Staff Accounting Bulletin No.,
        101, "Revenue Recognition in Financial Statements" and in March 2000,
        the SEC staff issued Staff Accounting Bulletin No. 101A "Implementation
        Issues Related to SAB 101." These bulletins summarize certain of the
        staff's views about applying generally accepted accounting principles to
        revenue recognition in financial statements. The staff is providing this
        guidance due, in part, to the large number of revenue recognition issues
        that registrants encounter. The provisions of these pronouncements are
        effective for the Company commencing with the fourth quarter of 2000.
        Management is in the process of analyzing the implications of these
        bulletins and is anticipating that further implementation guidance will
        be forthcoming from the SEC. Accordingly, there is uncertainty as to the
        ultimate impact to the Company in applying these bulletins.

10.     LEGAL PROCEEDINGS

        Chapter 11 Bankruptcy Proceedings

        At June 30, 2000, there was only one material claim to be settled before
        the Company's 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. The Company has 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%.



                                      -8-
<PAGE>   9

        CSA Private Limited ("CSA")

        CSA is a Company shareholder. On August 9, 1996, the Company acquired
        from Hotel Information Systems, Inc. ("HIS") substantially all their
        assets and certain of their liabilities (the "HIS Acquisition"). At the
        time of the Company's acquisition of HIS in 1996, CSA was a shareholder
        of HIS and, in connection with the purchase, the Company agreed to issue
        to CSA shares of our common stock worth approximately $4.8 million in
        August 1996, which amount has increased to approximately $6,496,000 as
        of June 30, 2000, pursuant to the agreement. The Company also granted
        CSA demand registration rights with respect to such stock. CSA requested
        registration of their shares, but the Company delayed registration based
        upon its good faith exercise of its rights under its agreement with CSA.
        On October 5, 1998, CSA filed a lawsuit against the Company in the U.S.
        District Court for the Central District of California. Pursuant to a
        settlement agreement entered into as of May 13, 1999 the Company 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. The
        number of shares which may be sold by CSA includes: (i) CSA's current
        ownership of 590,785 shares, and (ii) 8,851,000 additional shares,
        assuming a stock price of $0.688 per share, which the Company would
        issue to CSA in order for them to receive net proceeds of approximately
        $6,496,000 after deducting any discounts or commissions.  The Company
        has not yet filed the registration statement called for by the
        settlement agreement. 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 the Company to file the S-1
        registration statement. On March 6, 2000, the Company answered the
        complaint. A trial date has been set for December 18, 2000. The Company
        is currently in discussions with CSA attempting to settle this matter.


        Enterprise Hospitality Solutions, Inc.

        On November, 30, 1999, Enterprise Hospitality Solutions, Inc. ("EHS")
        and Christian Rivadella commenced an action against the Company in the
        United States District Court for the Central District of California,
        alleging that the Company 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 the Company's 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, the Company answered the
        complaint by denying its material allegations and asserted a
        Counterclaim against the plaintiffs. The Counterclaim asserted 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 the Company was not in breach of the parties' license
        agreement.

        Effective June 30, 2000, the parties entered into an agreement pursuant
        to which the Company acquired from EHS the exclusive worldwide marketing
        rights to certain 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 Company and EHS were terminated. The parties
        executed mutual general releases, and the litigation was dismissed with
        prejudice.


        Wang Global Corporation

        On December 2, 1996 the Company 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"), 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 the Company exceed $3.7 million.

        The Company filed a counterclaim for breach of contract and unfair
        business practices. The Company believes that to the extent any amounts
        are outstanding under the parties' agreement, the amount outstanding is
        significantly less than $3.7 million. Getronics Corporation answered the
        Counterclaim in the arbitration, asserting that it was the
        successor-in-interest to ONA and Wang.



                                      -9-
<PAGE>   10
        On June 9, 2000, the Company filed a compliant in California Superior
        Court against Getronics Corporation seeking to enjoin it from proceeding
        with the arbitration on the grounds that the Company had not agreed to
        arbitrate with Getronics Corporation (the "Court Action"). On June 22,
        2000, the arbitration was stayed pending the resolution of the Court
        Action.

        Other Litigation

        The Company is also involved in various other legal proceedings that 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.

11.     COMPREHENSIVE (LOSS) INCOME

        In June 1997, the Financial Accounting Standards Board (FASB) issued
        SFAS No. 130, "Reporting Comprehensive Income," which establishes
        standards for reporting and disclosure of comprehensive income and its
        components (revenue, expenses, gains and losses) in a full set of
        general purpose financial statements. SFAS No. 130 is effective for
        fiscal years beginning after December 15, 1997 and requires
        reclassification of financial statements for earlier periods to be
        provided for comparative purposes. The Company has presented the
        information required by SFAS No. 130 as follows (in thousands):


<TABLE>
<CAPTION>
                                   For The Three Months Ended       For The Six Months Ended
                                            June 30,                        June 30,
                                      1999             2000           1999              2000
                                    -------          -------         -------          -------
<S>                                 <C>              <C>             <C>              <C>
Net (loss) income                   $   806          $   268         $ 2,015          $  (887)

Change in cumulative
translation adjustments                (117)             156            (108)             390
                                    -------          -------         -------          -------

Comprehensive (loss) income         $   689          $   424         $ 1,907          $  (497)
                                    =======          =======         =======          =======
</TABLE>


        Accumulated other comprehensive (loss) income in the accompanying
        consolidated balance sheets consists of cumulative translation
        adjustments.



                                      -10-
<PAGE>   11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2000, working capital improved from a working capital deficiency of
$14,381,000 at December 31, 1999 to a working capital deficiency of $13,234,000.
Excluding unearned revenue of $7,654,000, the Company's working capital
deficiency at June 30, 2000 would be $5,580,000 or a ratio of current assets to
current liabilities of 0.66 to 1.0. Excluding unearned revenue, working capital
deficiency at December 31, 1999 was $6,608,000, with a current ratio of 0.68 to
1.0. Excluding unearned revenue, the decrease in the working capital deficiency
of $1,028,000 was primarily attributable to decreases in the Coast Bridge Loan
of $750,000, accounts payable of $1,094,000, deposits of $744,000 and accrued
liabilities of $1,204,000 offset by decreases in cash of $1,548,000 and
receivables of $1,770,000.

Cash was $1,097,000 at June 30, 2000, as compared to $2,645,000 at December 31,
1999. Availability under the Company's secured revolving credit facility is
based on a calculation using a rolling average of certain cash collections. At
June 30, 2000, approximately $2,939,000 was available and drawn down under this
facility. The facility expires on April 30, 2002.

Net cash used for investing activities for the six months ended June 30, 2000,
totaled $172,000, which represented capital expenditures.

Net cash used by financing activities for the six months ended June 30, 2000
totaled $859,000, which is comprised of $156,000 and $750,000 in repayments of
long-term debt and Bridge Loan, respectively, offset by a $47,000 increase in
the secured revolving credit facility. The Company was temporarily in default on
its revolving credit facility, Bridge Loan and subordinated debt. On April 13,
2000, the Company amended the respective loan agreements to waive all previous
defaults and to require weekly principal payments of $35,000 on the Bridge Loan
and weekly interest payments of $12,500 on the subordinated debt until the
Bridge Loan is paid in full, then interest payments of $25,000 per week on the
subordinated debt until all accrued and unpaid interest on the subordinated debt
is paid in full, then $11,000 per week in interest on the subordinated debt
thereafter. Additionally, the Company will be required to pay Coast a fee of
$300,000.

Stockholders' deficiency increased from $12,569,000 at December 31, 1999 to
$13,066,000 at June 30, 2000, as a result of a net loss for the period of
$887,000 offset by an increase in accumulated comprehensive income of $390,000.
The Company has commitments in connection with lease commitments, which require
payments of $1,405,000 in 2000.

Net cash used in operating activities for the six months ended June 30, 2000
totaled $553,000 and mainly related to the Company's net loss of $887,000,
decreases in accounts payable and customer deposits of $1,838,000, income taxes
payable of $153,000 and accrued liabilities of $1,504,000 offset by non-cash
charges for depreciation and amortization of tangible and intangible assets of
$1,773,000, a provision for doubtful accounts receivable of $713,000, a decrease
in receivables of $1,057,000, and a net loss from foreign currency of $354,000.
The Company expects that it will generate cash from its operating activities
cumulatively for fiscal 2000.

Although the Company has a net stockholders' deficiency of $13,066,000 at June
30, 2000, the Company believes it will generate sufficient funds from operations
and obtain additional financing, as needed, in 2000 to meet its operating and
capital requirements. The Company's belief is based on the Company significantly
reducing its cost structure through a restructuring effected in 1999 which
included reductions in employee headcount and the use of outside consultants,
the closure and reduction of certain facilities, and the renegotiation,
termination or replacement of certain contracts with service providers.
Additionally, the Company has a $14.1 million backlog as of June 30, 2000. The
Company expects to generate positive cashflow during 2000 from shipping out
products and services from this backlog as well as new orders. Also, the Company
is currently holding its notes receivable for sale and has a letter of intent
for the sale of the notes. If consummated, the amount expected to be realized
upon the sale of these notes is approximately $2,700,000. The Company expects to
sell these notes during 2000 and use the funds to reduce certain current
obligations and other operational purposes.

Lastly, the Company has historically been successful in securing additional
capital, when needed, to meet operating and capital requirements.



                                      -11-
<PAGE>   12
RESULTS OF OPERATIONS

Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 2000

<TABLE>
<CAPTION>
                                Three Months Ended    Percentage    Three Months Ended    Percentage
                                   June 30, 1999      of Revenue      June 30, 2000       of Revenue
                                -------------------   ----------    ------------------    -----------
                                  (in thousands)                       (in thousands)
<S>                             <C>                   <C>           <C>                   <C>
Revenues:
    Hospitality                     $ 10,016              61.5%          $  7,032             70.9%
    Process Manufacturing              2,176              13.4%             1,073             10.8%
    Legacy                             2,617              16.1%             1,812             18.3%
    Gaming                             1,337               8.2%                --               --
    Other                                139               0.8%                --               --
Total revenue                         16,285             100.0%             9,917            100.0%
Gross profit                           9,073              55.7%             5,339             53.8%
Selling, general &
   administrative expenses             6,225              38.2%             2,963             29.9%
Research and development
   costs                               1,205               7.4%             1,155             11.6%
Amortization of intangibles              599               3.7%               642              6.5%
Other operating (income)                 (69)             (0.4%)               21              0.2%
</TABLE>

The quarter-to-quarter decrease in overall revenue of 39.1% was due primarily to
decreases in sales of hospitality enterprise solutions. Hospitality revenue
decreased 29.8% from $10,016,000 in 1999 to $7,032,000 in 2000, largely due to
decreased sales of software and professional services. Process manufacturing
revenue decreased 50.7% from $2,176,000 in 1999 to $1,073,000 in 2000 due to
product transition. Gaming revenue decreased $1,337,000 due to the sale of its
gaming subsidiary in June 1999.

Consistent with the Company's strategy to focus on providing software and
services to its vertical markets, the Company's legacy revenue (traditional
hardware contract service revenues and proprietary add-on sales) declined 30.8%
quarter over quarter, largely due to the expected decrease in volume and
customers replacing their legacy systems due to Year 2000 compliance.

Gross profit decreased to 53.8% in 2000 from 55.7% in 1999 due to decreased
software sales which generate higher gross margins. Revenue on lower margin
functions such as hardware, professional services and legacy also declined.

Selling, general and administrative expenses ("SG&A") decreased 52.4% from
$6,225,000 in 1999 to $2,963,000 in 2000. The decrease is related to the
implementation of several cost reduction measures, including the Company's
restructuring effected in 1999.

Research and development costs decreased 4.1% over the comparable period in
1999. This is primarily as a result of a reduction in the use of contracted
research and development in 2000.

The 7.2% increase in amortization of intangibles versus the comparable period of
1999 is due to the increased amortization expense associated with capitalized
software development costs at the Company's Process Manufacturing division.



                                      -12-
<PAGE>   13
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 2000


<TABLE>
<CAPTION>
                                        Six Months Ended       Percentage       Six Months Ended      Percentage
                                         June 30, 1999         of Revenue        June 30, 2000        of Revenue
                                        ----------------       ----------       ----------------      ----------
                                         (in thousands)                         (in thousands)
<S>                                     <C>                    <C>              <C>                   <C>
Revenues:
    Hospitality                             $ 20,296              62.7%             $ 12,654             67.0%
    Process Manufacturing                      4,444              13.7%                2,533             13.4%
    Legacy                                     5,794              17.9%                3,702             19.6%
    Gaming                                     1,696               5.2%                   --               --
    Other                                        139               0.5%                   --               --
Total revenue                                 32,369             100.0%               18,889            100.0%
Gross profit                                  18,141              56.0%                9,516             50.4%
Selling, general &
   administrative expenses                    12,061              37.3%                6,257             33.1%
Research and development
   costs                                       2,407               7.4%                2,198             11.6%
Amortization of intangibles                    1,209               3.7%                1,297              6.9%
Other operating (income) expense                (110)             (0.3%)                  58              0.3%
</TABLE>

The year-to-year decrease in revenue of 41.6% for the six months ended June 30,
1999 over the comparable period was due primarily to decreases in sales of
hospitality enterprise solutions. Hospitality revenue decreased 37.7% from
$20,296,000 in 1999 to $12,654,000 in 2000, largely due to decreased software
sales and professional services. Process Manufacturing revenue decreased 43.0%
from $4,444,000 in 1999 to $2,533,000 in 2000 due to product transition. Gaming
revenue decreased $1,696,000 due to the sale of its gaming subsidiary in June
2000.

Consistent with the Company's strategy to focus on providing software and
services to its vertical markets, the Company's legacy revenue (traditional
hardware contract service revenues and proprietary add-on sales) declined 36.1%
year over year, largely due to the expected decrease in volume and customers
replacing their legacy systems due to Year 2000 compliance.

Gross profit decreased to 50.4% from 56.0% due to decreased software sales which
generate higher gross margins. Revenue on lower margin functions such as
hardware, professional services and legacy also declined.

Selling, general and administrative expenses ("SG&A") decreased 48.1% to
$6,257,000. The decrease is related to the implementation of several cost
reduction measures, including the Company's restructuring effected in 1999.

Research and development costs decreased 8.7% over the comparable period of
1999. This is primarily as a result of a reduction in the use of contracted
research and development in 2000.

The 7.3% increase in amortization of intangibles versus the comparable period of
1999 is due to the increased amortization expense associated with capitalized
software development costs of the Company's Process Manufacturing division.


ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended, is effective for
transactions entered into after January 1, 2001. This statement requires that
all derivative instruments be recorded on the balance sheet at fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and the type of hedge transaction. The
ineffective portion of all hedges will be recognized in earnings. The Company is
in the process of determining the impact that the adoption of SFAS No. 133 will
have on its results of operations and financial position.



                                      -13-
<PAGE>   14
In December 1999, the SEC staff issued Staff Accounting Bulletin No., 101,
"Revenue Recognition in Financial Statements" and in March 2000, the SEC staff
issued Staff Accounting Bulletin No. 101A "Implementation Issues Related to SAB
101." These bulletins summarize certain of the staff's views about applying
generally accepted accounting principles to revenue recognition in financial
statements. The staff is providing this guidance due, in part, to the large
number of revenue recognition issues that registrants encounter. The provisions
of these pronouncements are effective for the Company commencing with the fourth
quarter of 2000. Management is in the process of analyzing the implications of
these bulletins and is anticipating that further implementation guidance will be
forthcoming from the SEC. Accordingly, there is uncertainty as to the ultimate
impact to the Company in applying these bulletins.

YEAR 2000 COMPLIANCE RISKS

This section is a Year 2000 Readiness Disclosure Statement pursuant to the Year
2000 Information and Readiness Disclosure Act of 1998.

During 1999, the Company successfully completed its program to achieve Year 2000
Readiness. Before June 30, 1999 the Company completed an evaluation of both its
information technology systems and its non-technology systems, such as equipment
containing microprocessors. At that time the Company determined that all
information technology and non-technology systems in its corporate home office
in Irvine, California and in its branch or subsidiary offices in the United
States and internationally had been modified to address Year 2000 issues. "Year
2000 Ready" meant that the performance or functionality of the Company's
internal systems would not be significantly affected by the dates prior to,
during, and after the Year 2000, to include leap year calculations and specific
day-of-the-week calculations.

The Company established a Year 2000 "task force" which prepared and released its
Year 2000 products readiness report on the Company's "Web Pages"
(www.maisystems.com and www.hotelinfosys.com) and made available to clients a
copy of this report on a per request basis. The Company launched a direct
mail/fax campaign in February 1999 to all of its current maintenance agreement
clients as well as to all identifiable clients that may be utilizing the
Company's products, informing clients that the "Year 2000 Readiness Program" was
available to be viewed at the indicated websites. The mailing also provided
clients the opportunity to request information regarding the "Year 2000
Readiness Program" if they so desired. This mailing was executed using the most
current client database available. This notification went to approximately
18,000 domestic customers as well as being faxed to approximately 4,000
international customers from the Company's international offices.

The Company currently knows of no significant year 2000-related failures
occurring in either its products or its internal systems as a result of the date
change from December 31, 1999 to January 1, 2000. As expected, the Company has
not experienced a material adverse impact on its business, products, results of
operations, or financial condition as a result of the Year 2000 issue. Costs
associated with implementing its Year 2000 compliance plan for its corporate
offices were approximately $300,000. These costs were expensed as incurred and
were comprised primarily of the personnel costs required to review all software
for Year 2000 compliance, the informational mailing and website costs and
outside consulting fees.

The Company will continue to monitor its critical processes, and those of
significant third parties that are critical to the company's operations, for
potential Year 2000-related problems. The Company's present "reasonably likely
worst case scenario" for Year 2000 problems involves potential product liability
claims by substantial customers involving collateral (business interruption)
damages. 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.



                                      -14-
<PAGE>   15
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


        MARKET RISK DISCLOSURES

        The following discussion about the Company's 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. The
        Company is exposed to market risk related to changes in interest rates
        and foreign currency exchange rates. The Company does not have
        derivative financial instruments for hedging, speculative, or trading
        purposes.

        INTEREST RATE SENSITIVITY

        Of the Company's $9.7 million principal amount of indebtedness at June
        30, 2000, $3.6 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 $36,000 change in the annual amount of interest payable on
        such debt. Of the remaining amount of $6.1 million, $5.25 million bears
        interest at a fixed rate of 11% and $850,000 million bears fixed
        interest rates ranging from 6% to 17.5%.

        The face amount of the Company's 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 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

        The Company believes that its exposure to currency exchange fluctuation
        risk is insignificant because the Company's transactions with
        international vendors are generally denominated in US dollars. The
        currency exchange impact on intercompany transactions was immaterial for
        the quarter ended June 30, 2000.



                                      -15-
<PAGE>   16
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS


        Chapter 11 Bankruptcy Proceedings

        At June 30, 1999, there was only one material claim to be settled before
        the Company's 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. The Company has 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%.


        CSA Private Limited ("CSA")

        CSA is a MAI shareholder. On August 9, 1996, MAI acquired from Hotel
        Information Systems, Inc. ("HIS") substantially all their assets and
        certain of their liabilities (the "HIS Acquisition"). At the time of
        MAI's acquisition of HIS in 1996, CSA was a shareholder of HIS and, in
        connection with the purchase, MAI agreed to issue to CSA shares of its
        common stock worth approximately $4.8 million in August 1996, which
        amount has increased to approximately $6,496,000 as of June 30, 2000,
        pursuant to the agreement. MAI also granted CSA demand registration
        rights with respect to such stock. CSA requested registration of their
        shares, but MAI delayed registration based upon its good faith exercise
        of its rights under its agreement with CSA. On October 5, 1998, CSA
        filed a lawsuit against MAI in the U.S. District Court for the Central
        District of California. Pursuant to a settlement agreement entered into
        as of May 13, 1999 MAI 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. The number of shares which may be sold by CSA
        includes: (i) CSA's current ownership of 590,785 shares, and (ii)
        8,851,000 additional shares, assuming a stock price of $0.688 per share,
        which MAI would issue to CSA in order for them to receive net proceeds
        of approximately $6,496,000 after deducting any discounts or
        commissions.  MAI has not yet filed the registration statement called
        for by the settlement agreement. 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 MAI to file the
        S-1 registration statement. On March 6, 2000, the Company answered the
        complaint. A trial date has been set for December 18, 2000. MAI is
        currently in discussions with CSA attempting to settle this matter.


        Enterprise Hospitality Solutions, Inc.

        On November, 30, 1999, Enterprise Hospitality Solutions, Inc. ("EHS")
        and Christian Rivadella commenced an action against MAI in the United
        States District Court for the Central District of California, alleging
        that MAI 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 MAI's 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,
        MAI answered the complaint by denying its material allegations and
        asserted a Counterclaim against the plaintiffs. The Counterclaim
        asserted 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 MAI was not in breach of the parties'
        license agreement.

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



                                      -16-
<PAGE>   17


        Wang Global Corporation

        On December 2, 1996 MAI 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 it's 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 MAI exceed $3.7 million.

        MAI filed a counterclaim for breach of contract and unfair business
        practices. MAI believes that to the extent any amounts are outstanding
        under the parties' agreement, the amount outstanding is significantly
        less than $3.7 million. Getronics Corporation answered the Counterclaim
        in the arbitration, asserting that it was the successor-in-interest to
        ONA and Wang.

        On June 9, 2000, MAI filed a compliant in California Superior Court
        against Getronics Corporation seeking to enjoin it from proceeding with
        the arbitration on the grounds that the Company had not agreed to
        arbitrate with Getronics Corporation (the "Court Action"). On June 22,
        2000, the arbitration was stayed pending the resolution of the Court
        Action.

        Other Litigation

        The Company is also involved in various other legal proceedings that 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 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

        (a)    None.

        (b)    None.

        (c)    None

        (d)    None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

        In March 1997, the Company 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 by $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 3, 1999 the Company failed
        to make the semi-annual interest payment due on that date in the amount
        of $ 288,750.

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

        On April 13, 2000, the Company entered into an agreement with Canyon
        which waived all existing events of default, accelerated the 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. Upon
        repayment of the Bridge Loan, the Company will be required to pay Canyon
        weekly interest payments of $25,000 until all interest on the
        subordinated notes is paid in full. Thereafter, the Company will pay
        weekly interest payments of approximately $11,000.



                                      -17-
<PAGE>   18

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

        (a)    Annual Meeting of Stockholders.

               The Company held its Annual Meeting of Stockholders on May 19,
               2000 at the Hollywood Roosevelt Hotel, 7000 Hollywood Boulevard,
               Los Angeles, California.


        (b)    Elected Directors of Registrant.

               The following persons were elected to serve as directors of the
               Company.

                         Richard S. Ressler
                         Morton O. Schapiro
                         Zohar Loshitzer




        (c)    Items Voted Upon by Stockholders of the Registrant.

               The following matters were voted upon by the stockholders of the
               Company. The number of votes cast for and against are set forth
               below (as well as the applicable number of abstentions and
               broker non-votes):


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                           VOTES
                                          AGAINST
  SUBJECT                 VOTES FOR     OR WITHHELD       ABSTENTIONS      BROKER NON-VOTES
-------------------------------------------------------------------------------------------
<S>                       <C>           <C>               <C>              <C>
Election of
Directors:
                           8,611,424       116,790              0                 0
Zohar Loshitzer            8,611,397       116,817              0                 0
Richard S. Ressler         8,611,056       117,158              0                 0
Morton O. Schapiro
-------------------------------------------------------------------------------------------

Ratification of the        8,584,558        91,195         52,461                 0
Company's selection
of KPMG LLP to act
as the independent
auditors for the
Company.
-------------------------------------------------------------------------------------------
</TABLE>


        (d)    None.


ITEM 5.  OTHER INFORMATION

        None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        (a)    Exhibits.

               27     Financial Data Schedule.

               10.1   Warrant Agreement.

        (b)    Reports on Form 8-K.

               None.



                                      -18-
<PAGE>   19
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                       MAI SYSTEMS CORPORATION
                                       (Registrant)




Date: July 31, 2000                    /s/ James W. Dolan
                                       -----------------------------------------
                                       James W. Dolan
                                       Chief Financial Officer
                                       (Chief Financial and Accounting Officer)


                                      -19-
<PAGE>   20

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
           Exhibit
             No.            Description
<S>                    <C>

             27        Financial Data Schedule.

             10.1      Warrant Agreement.
</TABLE>