<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, 2001

                           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  [X]      No  [ ]

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  [X]      No  [ ]

As of July 25, 2001, 13,691,085 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,
                                                                                           2000               2001
                                                                                       -----------          ---------
                                                                                            (dollars in thousands)
<S>                                                                                    <C>                  <C>
ASSETS
Current assets:
     Cash                                                                                $   1,019          $     686
     Receivables, less allowance for doubtful accounts
           of $2,154 in 2000 and $1,664 in 2001                                              4,338              4,110
     Inventories                                                                               325                264
     Notes receivable                                                                        2,700                 --
     Investment in subsidiary held for sale                                                     --              2,700
     Prepaids and other assets                                                                 807                995
                                                                                         ---------          ---------

              Total current assets                                                           9,189              8,755

Furniture, fixtures and equipment, net                                                       1,882              1,617
Intangibles, net                                                                             5,308              3,978
Other assets                                                                                    66                 70
                                                                                         ---------          ---------

              Total assets                                                               $  16,445          $  14,420
                                                                                         =========          =========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
     Bridge Loan                                                                         $     220          $      --
     Current portion of long-term debt                                                         274                228
     Accounts payable                                                                        7,395              4,715
     Customer deposits                                                                       2,234              1,615
     Accrued liabilities                                                                     4,182              3,493
     Income taxes payable                                                                      272                109
     Unearned revenue                                                                        5,423              5,313
                                                                                         ---------          ---------

              Total current liabilities                                                     20,000             15,473

Line of credit                                                                               2,579              2,598
Long-term debt                                                                               5,234              8,561
Other liabilities                                                                              742                761
                                                                                         ---------          ---------

              Total liabilities                                                             28,555             27,393
                                                                                         ---------          ---------

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;
         11,006,658 and 13,691,085 shares issued and outstanding at December 31,
         2000 and June 30, 2001, respectively                                                  113                140

     Additional paid-in capital                                                            220,622            218,034
     Accumulated other comprehensive income                                                     80                 90
     Accumulated deficit                                                                  (232,925)          (231,237)
                                                                                         ---------          ---------

              Total stockholders' deficiency                                               (12,110)           (12,973)
                                                                                         ---------          ---------


              Total liabilities and stockholders' deficiency                             $  16,445          $  14,420
                                                                                         =========          =========
</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,
                                                                       2000           2001           2000           2001
                                                                    ---------       ----------     --------       ---------
                                                                    (in thousands, except per     (in thousands, except per
                                                                            share data)                   share data)
<S>                                                                 <C>             <C>            <C>            <C>
Revenue
     Software, networks and professional services:
           Software sales                                            $  1,769       $  1,543       $  3,291       $  3,326
           Network and computer equipment                                 143            221            646            445
           Professional  services                                       6,193          4,987         11,250         10,083
                                                                     --------       --------       --------       --------
                                                                        8,105          6,751         15,187         13,854

     Legacy revenue                                                     1,812            996          3,702          2,025
                                                                     --------       --------       --------       --------

                    Total revenue                                       9,917          7,747         18,889         15,879

Direct costs                                                            4,578          2,785          9,373          6,037
                                                                     --------       --------       --------       --------

                    Gross profit                                        5,339          4,962          9,516          9,842

Selling, general and administrative expenses                            2,963          2,409          6,257          4,843
Research and development costs                                          1,155          1,219          2,198          2,490
Amortization of intangibles                                               642            664          1,297          1,329
Other operating (income) expense, net                                      21            (30)            58         (1,396)
                                                                     --------       --------       --------       --------

                    Operating income (loss)                               558            700           (294)         2,576

Interest income                                                            97              4            155             56
Interest expense                                                         (387)          (410)          (748)          (865)
                                                                     --------       --------       --------       --------

                    Income (loss) before income taxes                     268            294           (887)         1,767

Provision for income taxes                                                 --              1             --             79
                                                                     --------       --------       --------       --------

Net income (loss)                                                    $    268       $    293       $   (887)      $  1,688
                                                                     ========       ========       ========       ========

Income (loss) per share:


Basic income (loss) per share                                        $   0.02       $   0.02       $  (0.08)      $   0.13
                                                                     ========       ========       ========       ========


Diluted income (loss) per share                                      $   0.02       $   0.02       $  (0.08)      $   0.13
                                                                     ========       ========       ========       ========

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

     Basic                                                             10,907         13,679         10,907         12,537
                                                                     ========       ========       ========       ========

     Diluted                                                           10,986         13,847         10,907         12,705
                                                                     ========       ========       ========       ========
</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)

                                                           2000          2001
                                                        --------       ----------
<S>                                                     <C>            <C>
Net cash provided by (used in) operating activities      $  (553)      $   143
                                                         -------       -------

Cash flows from investing activities -

         capital expenditures                               (172)         (128)
                                                         -------       -------


Cash flows from financing activities:

         Net increase in line of credit                       47            19
         Repayments of long-term debt                       (156)         (159)
         Repayments of Bridge Loan                          (750)         (220)
                                                         -------       -------

Net cash used in financing activities                       (859)         (360)
                                                         -------       -------

Effect of exchange rate changes on cash and cash
     equivalents                                              36            12
                                                         -------       -------

Net change in cash and cash equivalents                   (1,548)         (333)
                                                         -------       -------

Cash and cash equivalents at beginning of period           2,645         1,019
                                                         -------       -------

Cash and cash equivalents at end of period               $ 1,097       $   686
                                                         =======       =======
</TABLE>


Supplemental disclosure of non - cash investing and financing activities (See
Notes 6 and 7).



   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, 2001
                                   (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, 2000, which
         is on file with the SEC.

2.       INVENTORIES

         Inventories are summarized as follows:


<TABLE>
<CAPTION>
                     December 31,     June 30,
                         2000           2001
                     ------------     --------
                        (dollars in thousands)
<S>                  <C>              <C>
Finished goods           $124           $146
Replacement parts         201            118
                         ----           ----

                         $325           $264
                         ====           ====
</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 were distributed by the Company to its former
         creditors. As of July 25, 2001, 6,758,251 shares of Common Stock had
         been issued pursuant to the Plan and were outstanding.


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 by $931,000 and approximately 100,650 shares will
         be released from the escrow account and returned to the Company. In
         addition, further claims by the Company against HIS relating to legal
         costs and certain disbursements currently estimated at $650,000 are
         presently pending. Resolution of such claims may result in release of
         additional escrow shares to the Company. Upon settlement, the Company
         may, 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. This adjustment applies to a maximum of 73,466 shares of Common
         Stock. As of June 30, 2001, the fair market value of the Company's
         common stock was $0.50 per share, which would result in approximately
         1,622,000 additional shares being issued. Also, included in the escrow
         account at June 30, 2001 is 200,000 shares of Common Stock which do not
         have a guarantee of value. The amount and number of shares will be
         determined based on the final resolution of such claims. Accordingly,
         as of June 30, 2001, the final purchase price has not been determined.

5.       BUSINESS DIVESTITURE

         On June 19, 1999, the Company sold GSI for an amount in excess of the
         book value of net assets sold. Assets sold of approximately $3,749,000
         consisted of accounts receivable of $1,514,000, inventories of
         $364,000, furniture, fixtures and equipment of $218,000, intangible
         assets of $1,573,000 and prepaid expenses of $80,000. Liabilities
         assumed by the buyer consisted of accounts payable and accrued
         liabilities of $197,000, deposits of $100,000, unearned revenue of
         $351,000 and long-term debt of 446,000. 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 was 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 was guaranteed by a third
         party. Principal payments and interest, at prime plus 1%, was to
         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 which resulted in a
         combined carrying value of $4,282,000 for all three promissory notes.
         The gain on sale of $1,227,000 had been deferred until collection of
         the proceeds representing the gain can be assured. As of December 31,
         2000 the Notes were held for sale and have been written down to an
         amount which approximated their estimated net realizable value of
         $2,700,000.

         On April 6, 2001 the Company entered into an agreement with the maker
         of the Notes whereby the maker reconveyed 100% of the common stock of
         GSI to the Company for the purpose of selling GSI to a third party. In
         connection with the agreement, the Company canceled the Notes and
         entered into a new $1.1 million secured promissory note with the same
         party. The maker will be paid a commission of 30% of the future sale
         price, which will be first applied to the $1.1 million note and paid in
         cash to the maker thereafter. On July 27, 2001, the Company entered
         into an Asset Purchase Agreement ("Agreement") with the third party for
         approximately $3.2 million whereby all of the assets of GSI will be
         acquired and all of the liabilities assumed, except for approximately
         $300,000 of obligations, which will remain with GSI. The payment terms
         under the Agreement require a $1 million non-refundable cash payment to
         the Company, which was received on July 27, 2001 and a $1.5 million
         payment to be paid the earlier of 120 days from the Agreement date or
         the date the buyer receives the requisite licenses and approvals in all
         gaming jurisdictions. Upon receipt of the $1.5 million payment, the
         third party will also be required to pay $500,000 in April 2002 and the
         remaining $500,000 in January 2003 subject to a maximum of $250,000
         reduction pursuant to the resolution of certain uncertainties as of the
         date of the Agreement. In the event that the buyer does not receive
         certain licenses or approvals from the respective gaming authorities,
         the buyer shall have the right to cancel the Agreement and return the
         GSI business to the Company, including its assets and employees to the
         Company with no further obligation. The Company has deferred any gain
         due to the contingent nature of this sales transaction. The Company
         believes that the $2.7 million carrying value is recoverable and,
         accordingly, is classified as current in the accompanying consolidated
         balance sheets.

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 bore 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


                                      -6-
<PAGE>   7

         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.
         The unpaid balance of the Bridge Loan as of March 31, 2000 was
         $1,100,000. 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
         interest at prime plus 2.25% (prime plus 5.25% when default interest
         rates apply) and expires on April 30, 2003. The facility was again
         amended on April 13, 2000 and September 12, 2000. In accordance with
         the amendments, the Bridge Loan and the credit facility bear interest
         at prime plus 4.5% and required $35,000 weekly principal payments on
         the Bridge Loan, except for the period from September 12, 2000 through
         December 8, 2000, which required monthly payments of $35,000, until it
         was paid in full. During the first quarter of 2001, the remaining
         balance of the Bridge Loan was repaid in full. 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 on April 13, 2000, Coast waived all
         existing defaults. Additionally, the Company agreed to pay Coast a fee
         of $300,000 ("Loan Fee") in weekly installments of $35,000 commencing
         after the Bridge Loan is paid in full. The Loan Fee was fully paid by
         April 23, 2001. 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, 2001.

         At December 31, 2000 and June 30, 2001, approximately $2,579,000 and
         $2,598,000, 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.

         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. On January 31, 2001, the Company entered into an
         agreement with Canyon whereby the specified accrued interest of
         $431,000 was added to the principal balance of the subordinated notes
         payable. As part of this agreement, the Company also agreed to pay
         Canyon an additional $79,000 loan fee, of which $29,000 was added to
         principal.

7.       COMMON STOCK

         In January and February of 2001, the Company entered into agreements
         with several creditors to retire approximately $2.1 million of
         obligations outstanding as of December 31, 2000 in exchange for 798,000
         shares of Common Stock and $470,000 of cash. This resulted in a gain of
         $1,377,000 in the first quarter of 2001. To fulfill its performance
         under the agreement, the Company issued the 798,000 shares of its
         Common Stock and filed an S-3 Registration statement in March 2001 to
         cause them to become tradable with the effectiveness of the
         Registration Statement. As of July 25, 2001 the Company has paid
         approximately $317,000 pursuant to these agreements with the remainder
         to be paid over the next thirteen months.


                                      -7-
<PAGE>   8

         In May 2001, the Company issued 35,000 shares of its Common Stock
         valued at $13,000, its fair market value at the date of issuance, to a
         creditor to satisfy certain of its obligations.


8.       INCOME (LOSS) PER SHARE OF COMMON STOCK

         Basic and diluted income or loss per share is computed using the
         weighted average shares of common stock outstanding during the period.
         Consideration is also given in the diluted income per share calculation
         for the dilutive effect of common stock equivalents which might result
         from the exercise of stock options. However, for the six months period
         ended June 30, 2000 there were no common stock equivalents as the
         effect of common stock equivalents would be anti-dilutive.

         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,
                                                  2000         2001           2000          2001
                                             ----------      ----------    --------       ---------
                                              (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         $   268      $   293        $  (887)      $ 1,688
                                                =======      =======        =======       =======

Denominator:

Denominator for basic earnings (loss)
   per share-weighted average number
   of common shares outstanding during
   the period                                    10,907       13,679         10,907        12,537

Incremental common shares attributable
   to exercise of outstanding options                79          168             --           168
                                                -------      -------        -------       -------

Denominator for diluted earnings (loss)
   per share                                     10,986       13,847         10,907        12,705
                                                =======      =======        =======       =======

Basic earnings (loss) per share                 $  0.02      $  0.02        $ (0.08)      $  0.13
                                                =======      =======        =======       =======

Diluted earnings (loss) per share               $  0.02      $  0.02        $ (0.08)      $  0.13
                                                =======      =======        =======       =======
</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
         implementation of SFAS No. 133 did not have a material impact on the
         Company's 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." In addition, in October 2000, the SEC staff
         issued a document containing answers to certain frequently asked
         questions ("FAQ") which further clarified certain accounting issues
         addressed in the bulletins relating to revenue recognition. 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


                                      -8-
<PAGE>   9

         due, in part, to the large number of revenue recognition issues that
         registrants encounter. The provisions of these pronouncements were
         effective for the Company during the fourth quarter of 2000. The
         implementation of these bulletins did not have a material impact on its
         results of operations and financial position.

         In July 2001, the FASB issued SFAS No. 141 "Business Combinations".
         This statement requires that all business initiated after June 30,2001
         be accounted for by a single method - the purchase method. It also sets
         forth criteria for the identification of intangible assets apart from
         goodwill. At the same time, the FASB also issued SFAS No. 142 "Goodwill
         and Other Intangible Assets". This statement addresses how goodwill and
         other intangible assets should be accounted for after they have been
         initially recognized in financial statements. Specifically, SFAS No.
         142 requires that goodwill be tested for impairment annually and that
         amortization of goodwill cease. SFAS No. 142 is required to be
         implemented by the Company commencing on January 1, 2002. The Company
         is currently assessing the impact these new standards will have on the
         Company's results.

10.      LEGAL PROCEEDINGS




         Chapter 11 Bankruptcy Proceedings

         At June 30, 2001, 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 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 had increased to approximately $6.8 million as of December 31,
         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. 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 with the SEC. On March 6, 2000, the Company
         answered the complaint. Because the Company did not conclude the
         registration statement filing by November 1, 1999, CSA initiated a
         second lawsuit in January 2000 to enforce the settlement agreement and
         secure injunctive relief through court order to cause the Company to
         file a registration statement.

         The Company entered into a second settlement agreement with CSA in
         February 2001, whereby it agreed to take the following steps on or
         before March 1, 2001: (i) issue CSA additional shares of its Common
         Stock to bring CSA's total share ownership to 2,433,333 shares; (ii)
         immediately file a registration statement for all of CSA's shares of
         our common stock; and (iii) execute a secured debt instrument in favor
         of CSA in the principal sum of $2,800,000 which is subordinate only to
         our present group of three (3) senior secured leaders and requires cash
         installment payments to commence June 1, 2002. The number of shares
         which may be sold by the selling shareholder includes: (i) CSA's
         current ownership of 517,319 shares, and (ii) 1,916,014 additional
         shares which were issued to CSA pursuant to the settlement agreement.

         In connection with the second settlement agreement with CSA, the
         Company recorded the $2.8 million debt issuance as a reduction in paid
         in capital and the 1,916,014 additional shares at par as an addition to
         common stock and a reduction to additional paid in capital. The $2.8
         million of debt accrues interest at 10% per annum and requires payments
         of $37,500 commencing on March 1, 2002 through September 1, 2002 and
         monthly payments of $107,500 commencing on October 1, 2002 until all
         outstanding principal and accrued interest is paid in full. In any
         event, payment of any unpaid principal and accrued interest is due by
         October 1, 2003.


                                      -9-
<PAGE>   10

         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,
                                    2000        2001              2000         2001
                               ----------      ----------     ---------       --------
<S>                            <C>             <C>            <C>             <C>
Net (loss) income                  $  268      $  293            $ (887)      $1,688

Change in cumulative
translation Adjustments               156           7               390           10
                                   ------      ------            ------       ------

Comprehensive (loss) income        $  424      $  300            $ (497)      $1,698
                                   ======      ======            ======       ======
</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, 2001, working capital improved from a working capital deficiency of
$10,811,000 at December 31, 2000 to a working capital deficiency of $6,718,000.
Excluding unearned revenue of $5,313,000, the Company's working capital
deficiency at June 30, 2001 would be $1,405,000 or a ratio of current assets to
current liabilities of 0.86 to 1.0. Excluding unearned revenue, working capital
deficiency at December 31, 2000 was $5,388,000, with a current ratio of 0.63 to
1.0. Excluding unearned revenue, the decrease in the working capital deficiency
of $3,983,000 was primarily attributable to decreases in the Coast Bridge Loan
of $220,000, accounts payable of $2,680,000 (mainly due to vendor settlements
described in Note 7 to the consolidated financials statements), deposits of
$619,000 and accrued liabilities of $689,000 and an increase in prepaids and
other assets of $188,000 offset by decreases in cash of $333,000 and receivables
of $228,000.

Cash was $686,000 at June 30, 2001, as compared to $1,019,000 at December 31,
2000. 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, 2001, approximately $2,598,000 was available and drawn down under this
facility. The facility expires on April 30, 2003.

Net cash used in investing activities for the six months ended June 30, 2001,
totaled $128,000, which represented capital expenditures.

Net cash used in financing activities for the six months ended June 30, 2001
totaled $360,000, which is comprised of $159,000 and $220,000 in repayments of
long-term debt and Bridge Loan, respectively, offset by a $19,000 increase in
the secured revolving credit facility. The revolving credit facility requires
monthly interest only payments on the average outstanding balance for the
period. The Company is required to make weekly payments of $12,500 on the
subordinated debt. The facility, and subordinated debt pursuant to an
intercreditor agreement between Canyon Capital and Coast Business Credit,
contains various restrictions and covenants, including an adjusted minimum
consolidated net worth of $4,922,000 as of June 30, 2001, minimum quarterly debt
coverage ratio of 1.1:1 and minimum quarterly profitability of $250,000. We were
in compliance with these covenants as of June 30, 2001. In the event that we are
not in compliance with the various restrictions and covenants and were unable to
receive waivers for non-compliance, the facility and subordinated debt would
become immediately due and payable. The restrictions and covenants are assessed
quarterly.

Stockholders' deficiency increased from $12,110,000 at December 31, 2000 to
$12,973,000 at June 30, 2001, mainly as a result of a reduction to additional
paid in capital relating to final resolution of the settlement with CSA.
Principal and interest payments on $2.8 million of CSA debt commence on June 1,
2002. The decrease was offset by net income for the period of $1,688,000 and
approximately $240,000 of common stock issued during the period.


Net cash provided by operating activities for the six months ended June 30, 2001
totaled $143,000 and mainly related to net income for the period of $1,688,000,
non-cash charges for depreciation and amortization of tangible and intangible
assets, of $1,809,000, a gain recorded on the issuance of common stock for
settlement of vendor obligations of $1,377,000 and a decrease in receivables of
$176,000 offset by decreases in accounts payable and customer deposits of
$1,732,000, accrued liabilities of $164,000, taxes payable of $144,000, unearned
revenue of $110,000 and increases in prepaids and other assets of $109,000. The
Company expects that it will continue to generate cash from its operating
activities in fiscal 2001.


Although the Company has a net stockholders' deficiency of $12,973,000 at June
30, 2001, the Company believes it will generate sufficient funds from operations
and obtain additional financing, as needed, in 2001 to meet its operating and
capital requirements. The Company expects to generate positive cashflow during
2001 from shipping out products and services from its $14 million backlog as of
June 30, 2001 as well as new orders. Also, the Company entered into an agreement
for the sale of its investment in GSI for approximately $3.2 million, subject to
adjustment, and has received a $1 million non-refundable cash deposit on July
27, 2001. Subject to certain contingencies being resolved, the Company will
receive $1,500,000 in November 2001, $500,000 in April 2002 and the balance in
January 2003.

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, 2000 Compared to Three Months Ended June 30, 2001

<TABLE>
<CAPTION>
                                      Three Months Ended    Percentage  Three Months Ended    Percentage
                                        June 30, 2000       of Revenue    June 30, 2001       of Revenue
                                      ------------------    ----------  ------------------    ----------
                                        (in thousands)                    (in thousands)
<S>                                   <C>                   <C>         <C>                   <C>
Revenues:
    Hospitality                         $ 7,032                70.9%      $ 6,272                 81.0%
    Process Manufacturing                 1,073                10.8%          479                  6.2%
    Legacy                                1,812                18.3%          996                 12.8%
    Total revenue                         9,917               100.0%        7,747                100.0%
Gross profit                              5,339                53.8%        4,962                 64.1%
Selling, general &
   Administrative expenses                2,963                29.9%        2,409                 31.1%
Research and development
   costs                                  1,155                11.6%        1,219                 15.7%
Amortization of intangibles                 642                 6.5%          664                  8.6%
Other operating (income) / expense           21                 0.2%          (30)                (0.4%)
</TABLE>

Revenue for the quarter ended June 30, 2001 was $7,747,000 compared to
$9,917,000 in 2000, or a 21.9% decrease. We continue to transition from our
legacy business to the sale of enterprise solutions as 87.2% of our 2001 revenue
resulted from our enterprise solutions business as compared to 81.7% in 2000.
Our revenue from our sales of enterprise solutions in industries in which we
compete (hospitality and process manufacturing), decreased 16.7% compared to the
prior quarter. Hospitality revenue decreased 10.8% from $7,032,000 in 2000 to
$6,272,000 in 2001, as a result of decreased software sales and professional
services mainly due to decreased market spending on information technology in
2001 due to economic uncertainties in the industry. Process Manufacturing
decreased from $1,073,000 in 2000 to $479,000 in 2001 as the process business
unit transitioned from a direct selling model to a reseller model and completed
development of new products. During 2000, we focused on developing enhancements
to our CIMPRO V and CIMPRO classic process manufacturing products which were
released in the first quarter of 2001. Consistent with our strategy to focus on
providing software and services to our vertical markets, our legacy revenue
(traditional hardware contract service revenues and proprietary add-on sales)
declined 45.0% quarter over quarter, largely due to expected decreased volume
and customers replacing their legacy systems due to Year 2000 compliance.

The decrease in revenue for our hospitality, process manufacturing and legacy
business units from 2000 to 2001 were mainly attributable to a decrease in the
volume of sales. Our respective business units continue to generate sufficient
cash from operations to adequately fund the respective ongoing operating
activities.

Revenue in our Asian hospitality operations decreased from $772,000 in 2000 to
$497,000 in 2001. The deterioration of revenue from 2000 to 2001 is mainly due
to the continued generally depressed condition of the Asian economies resulting
in a decrease in sales in the region.

Gross profit increased to 64.1% in 2001 from 53.8% in 2000 due to a decrease of
professional and software support services costs which generated gross margins
of 18% and 76% respectively in 2001 and 9% and 56% respectively in 2000.

Selling, general and administrative expenses ("SG&A") decreased 18.7% from
$2,963,000 in 2000 to $2,409,000 in 2001. The decrease is mainly due to
decreased payroll and facilities costs and the reduction in the use of third
party service providers for the Company's hospitality division. As a result SG&A
for the Company's hospitality division decreased from $2,091,000 in 2000 to
$1,621,000 in 2001.

Research and development costs increased 6% over the comparable period in 2000.
This is primarily a result of increased headcount in the Company's hospitality
division and an increase in the use of contracted research and development
personnel in 2001. Research and development costs for the hospitality division
increased from $930,000 in 2000 to $1,100,000 in 2001 as a result of the
Company's efforts and focus on new product development as well as enhancements
to its current products.


                                      -12-
<PAGE>   13

The 8.6% increase in amortization of intangibles versus the comparable period of
2000 is due to the increased amortization expense associated with capitalized
software development costs at the Company's Process Manufacturing division.



Six Months Ended June 30, 2000 Compared to Six Months Ended June 31, 2001.


<TABLE>
<CAPTION>
                                          Six Months Ended    Percentage    Six Months Ended     Percentage
                                            June 30, 2000     of Revenue     June 30, 2001       of Revenue
                                          ----------------    ----------     -------------       ----------
                                           (in thousands)                    (in thousands)
<S>                                       <C>                 <C>           <C>                  <C>
Revenues:
    Hospitality                               $ 12,654           67.0%          $ 12,770            80.4%
    Process Manufacturing                        2,533           13.4%             1,084             6.8%
    Legacy                                       3,702           19.6%             2,025            12.8%
   Total revenue                                18,889          100.0%            15,879           100.0%
Gross profit                                     9,516           50.4%             9,842            62.0%
Selling, general &
   administrative expenses                       6,257           33.1%             4,843            30.5%
Research and development
   costs                                         2,198           11.6%             2,490            15.7%
Amortization of intangibles                      1,297            6.9%             1,329             8.4%
Other operating (income) expense                    58            0.3%            (1,396)           (8.8%)
</TABLE>

Revenue for 2000 was $18,889,000 compared to $15,879,000 in 2001 or a 15.9%
decrease. We continue to transition from our legacy business to the sale of
enterprise solutions as 87.2% of our 2001 revenue resulted from our enterprise
solutions business as compared to 80.4% in 2000. Process Manufacturing decreased
from $2,533,000 in 2000 to $1,084,000 in 2001 as the process business unit
transitioned from a direct selling model to a reseller model and completed
development of new products. During 2000, we focused on developing enhancements
to our CIMPRO V and CIMPRO classic process manufacturing products which were
released in the first quarter of 2001. Consistent with our strategy to focus on
providing software and services to our vertical markets, our legacy revenue
(traditional hardware contract service revenues and proprietary add-on sales)
declined 45.3% year over year, largely due to expected decreased volume and
customers replacing their legacy systems due to Year 2000 compliance.

The decrease in revenue for our process manufacturing and legacy business units
from 2000 to 2001 were mainly attributable to a decrease in the volume of sales.
Our respective business units continue to generate sufficient cash from
operations to adequately fund the respective ongoing operating activities.

Revenue in our Asian hospitality operations decreased from $1,675,000 in 2000 to
$1,071,000 in 2001. The deterioration of revenue from 2000 to 2001 is mainly due
to the continued generally depressed condition of the Asian economies resulting
in a decrease in sales in the region. Domestic hospitality revenue increased
from $9,782,000 in 2000 to $10,624,000 in 2001 due to an increase in
professional services revenue.

Gross profit increased from 50.4% to 62.0% due to decrease of professional and
software support services costs which generated gross margins of 29% and 69%
respectively in 2001 and 16% and 57% respectively in 2000.

Selling, general and administrative expenses ("SG&A") decreased 22.6% from
$6,257,000 in 2000 to $4,843,000 in 2001. The decrease is mainly due to
decreased payroll and facilities costs and the reduction in the use of third
party service providers for the Company's hospitality division. As a result SG&A
for the Company's hospitality division decreased from $4,789,000 in 2000 to
$3,491,000 in 2001.

Research and development costs increased 13.3% over the comparable period in
2000. This is primarily a result of increased headcount in the Company's
hospitality division and an increase in the use of contracted research and
development personnel in 2001. Research and development costs for the
hospitality division increased from $1,692,000 in 2000 to $2,175,000 in 2001 as
a result of the Company's efforts and focus on new product development as well
as enhancements to its current products.

The 8.6% increase in amortization of intangibles versus the comparable period of
2000 is due to the increased amortization expense associated with capitalized
software development costs at the Company's Process Manufacturing division.


                                      -13-
<PAGE>   14

Other operating income was $1,396,000 in the first half of 2001 as a result of
the Company issuing common stock to certain creditors to satisfy its obligations
which resulted in a gain of $1,377,000 in the first quarter of 2001. There were
no such transactions in 2000.


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
implementation of SFAS No. 133 did not have a material impact on the Company's
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." In addition, in October 2000, the SEC staff issued a document containing
answers to certain frequently asked questions ("FAQ") which further clarified
certain accounting issues addressed in the bulletins relating to revenue
recognition. 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 were effective for the Company during the
fourth quarter of 2000. The implementation of these bulletins did not have a
material impact on its results of operations and financial position.

In July 2001, the FASB issued SFAS No. 141 "Business Combinations". This
statement requires that all business initiated after June 30,2001 be accounted
for by a single method - the purchase method. It also sets forth criteria for
the identification of intangible assets apart from goodwill. At the same time,
the FASB also issued SFAS No. 142 "Goodwill and Other Intangible Assets". This
statement addresses how goodwill and other intangible assets should be accounted
for after they have been initially recognized in financial statements.
Specifically, SFAS No. 142 requires that goodwill be tested for impairment
annually and that amortization of goodwill cease. SFAS No. 142 is required to be
implemented by the Company commencing on January 1, 2002. The Company is
currently assessing the impact these new standards will have on the Company's
results.


                                      -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 enter into
         derivative financial instruments for hedging, speculative, or trading
         purposes.

         INTEREST RATE SENSITIVITY

         Of the Company's $11.7 million principal amount of indebtedness at June
         30, 2001, $2.6 million bears interest at a rate that fluctuates based
         on changes in prime rate. A one percentage point change in the
         underlying prime rate would result in a $26,000 change in the annual
         amount of interest payable on such debt. Of the remaining amount of
         $9.1 million, $5.7 million bears interest at a fixed rate of 11%, $2.9
         million bears interest at a fixed rate of 10% and $436,000 million
         bears fixed interest rates ranging from 6% to 17.5%.



         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, 2001.


                                      -15-
<PAGE>   16

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


         Chapter 11 Bankruptcy Proceedings

         At March 31, 2001, 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 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 had increased to approximately $6.8 million as of December 31,
         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. 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 with the SEC. On March 6, 2000, the Company
         answered the complaint. Because the Company did not conclude the
         registration statement filing by November 1, 1999, CSA initiated a
         second lawsuit in January 2000 to enforce the settlement agreement and
         secure injunctive relief through court order to cause us to file a
         registration statement.

         The Company entered into a second settlement agreement with CSA in
         February, 2001 whereby we agreed to take the following steps on or
         before March 1, 2001: (i) issue CSA additional shares of our common
         stock to bring CSA's total share ownership to 2,433,333 shares; (ii)
         immediately file a registration statement for all of CSA's shares of
         our common stock; and (iii) execute a secured debt instrument in favor
         of CSA in the principal sum of $2,800,000 which is subordinate only to
         our present group of three (3) senior secured leaders and requires cash
         installment payments to commence June 1, 2002. The number of shares
         which may be sold by the selling shareholder includes: (i) CSA's
         current ownership of 517,319 shares, and (ii) 1,916,014 additional
         shares which were issued to CSA pursuant to the settlement agreement.

         In connection with the second settlement agreement with CSA, the
         Company recorded the $2.8 million debt issuance as a reduction in paid
         in capital and the 1,916,014 additional shares at par as an addition to
         common stock and a reduction to additional paid in capital. The $2.8
         million of debt accrues interest at 10% per annum and requires payments
         of $37,500 commencing on March 1, 2002 through September 1, 2002 and
         monthly payments of $107,500 commencing on October 1, 2002 until all
         outstanding principal and accrued interest is paid in full. In any
         event, payment of any unpaid principal and accrued interest is due by
         October 1, 2003.

         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.


                                      -16-
<PAGE>   17

         (c)      None

         (d)      None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None




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 21,
                  2001 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
                            Stephen Ross
                            Steven F. Mayer


         (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):


                                      -17-
<PAGE>   18

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                               Votes Against Or
        Subject               Votes For            Withheld            Abstentions        Broker Non-Votes
----------------------------------------------------------------------------------------------------------
<S>                           <C>              <C>                     <C>                <C>
      ELECTION OF
       DIRECTORS:
   Richard S. Ressler         8,399,349             197,692                 0                     0
   Morton O. Shapiro          8,393,372             203,669                 0                     0
    Zohar Loshitzer           8,399,452             203,669                 0                     0
      Stephen Ross            8,362,686             234,355                 0                     0
    Steven F. Mayer           8,362,686             234,355                 0                     0
----------------------------------------------------------------------------------------------------------
    RATIFICATION OF           7,564,603             541,654              490,784                  0
   AMENDMENT TO 1993
 EMPLOYEE STOCK OPTION
         PLAN:
----------------------------------------------------------------------------------------------------------
    ADOPTION OF 2001          7,669,636             434,644              492,761                  0
 RESTRICTED STOCK PLAN:
----------------------------------------------------------------------------------------------------------
  RATIFICATION OF THE         8,101,741              6,136               489,164                  0
 COMPANY'S SELECTION OF
KPMG LLP AS INDEPENDENT
AUDITORS FOR THE COMPANY
----------------------------------------------------------------------------------------------------------
</TABLE>



         (d)      None.


ITEM 5.  OTHER INFORMATION

         None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits.

         10.2     Settlement and Reconveyance Agreement dated April 6, 2001
                  between MAI Systems Corporation and Logix Development
                  Corporation, a California Corporation.

         (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.

<TABLE>
<S>                                     <C>
                                        MAI  SYSTEMS CORPORATION
                                        (Registrant)




Date: August 14, 2001                   /s/ James W. Dolan
                                        ----------------------------------------
                                        James W. Dolan
                                        Chief Financial and Operating Officer
                                        (Chief Financial and Accounting Officer)
</TABLE>


                                      -19-
<PAGE>   20

                                 EXHIBIT INDEX


<TABLE>
<S>      <C>
10.2     Settlement and Reconveyance Agreement dated April 6, 2001 between MAI
         Systems Corporation and Logix Development Corporation, a California
         Corporation.
</TABLE>


                                      -20-