<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 MARCH 31, 2000

                           COMMISSION FILE NO. 1-9158

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

                             MAI SYSTEMS CORPORATION
--------------------------------------------------------------------------------
             (Exact name of Registrant as Specified in its Charter)


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


                               9601 Jeronimo Road
                            Irvine, California 92618
--------------------------------------------------------------------------------
                     (Address of Principal Executive 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 May 5, 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,  March 31,
                                                                   1999         2000
                                                                ------------  ---------
                                                                 (dollars in thousands)

<S>                                                             <C>           <C>

ASSETS

Current assets:
     Cash                                                       $   2,645     $   1,335
     Receivables, less allowance for doubtful accounts of
       $3,622 in 1999 and $3,201 in 2000                            7,189         6,117
     Inventories                                                      625           521
     Notes receivable, less deferred gain of $1,227                 2,700         2,700
     Prepaids and other assets                                        782           761
                                                                ---------     ---------
              Total current assets                                 13,941        11,434

Furniture, fixtures and equipment, net                              2,609         2,564
Intangibles, net                                                    7,974         7,356
Other assets                                                          106           127
                                                                ---------     ---------
              Total assets                                      $  24,630     $  21,481
                                                                =========     =========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
     Bridge Loan                                                $   1,450     $   1,100
     Current portion of long-term debt                                447           311
     Accounts payable                                              10,705         9,923
     Customer deposits                                              2,236         1,440
     Accrued liabilities                                            5,136         4,419
     Income taxes payable                                             575           523
     Unearned revenue                                               7,773         7,968
                                                                ---------     ---------
              Total current liabilities                            28,322        25,684

Line of credit                                                      2,892         3,275
Long-term debt                                                      5,270         5,294
Other liabilities                                                     715           718
                                                                ---------     ---------
              Total liabilities                                    37,199        34,971
                                                                ---------     ---------
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 March 31, 2000                                                112           112
  Additional paid-in capital                                      220,567       220,567
  Accumulated other comprehensive income                              494           728
  Accumulated deficit                                            (233,742)     (234,897)
                                                                ---------     ---------
              Total stockholders' deficiency                      (12,569)      (13,490)
                                                                ---------     ---------
              Total liabilities and stockholders' deficiency    $  24,630     $  21,481
                                                                =========     =========
</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 March 31,
                                                             ---------------------
                                                               1999         2000
                                                             --------     --------
                                                             (in thousands, except
                                                                per share data)
<S>                                                          <C>          <C>
Revenue:

     Software, networks and professional services:
           Software sales                                    $  4,845     $  1,573
           Network and computer equipment                         875          645
           Professional services                                7,187        5,158
                                                             --------     --------
                                                               12,907        7,376

     Legacy revenue                                             3,177        1,596
                                                             --------     --------

                    Total revenue                              16,084        8,972

Direct costs                                                    7,016        4,795
                                                             --------     --------

                    Gross profit                                9,068        4,177

Selling, general and administrative expenses                    5,836        3,294
Research and development costs                                  1,202        1,043
Amortization of intangibles                                       610          655
Other operating (income) expense                                  (41)          37
                                                             --------     --------

                    Operating income (loss)                     1,461         (852)

Equity in net income (loss) of unconsolidated
  subsidiaries                                                     15           --
Interest income                                                    30           58
Interest expense                                                 (297)        (361)
                                                             --------     --------

                    Income (loss) before income taxes           1,209       (1,155)

Provision for income taxes                                         --           --
                                                             --------     --------
Net income (loss)                                            $  1,209     $ (1,155)
                                                             ========     ========
Income (loss) per share:
Basic income (loss) per share                                $   0.11     $  (0.11)
                                                             ========     ========
Diluted income (loss) per share                              $   0.11     $  (0.11)
                                                             ========     ========

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

     Basic                                                     10,836       10,907
                                                             ========     ========
     Diluted                                                   10,925       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 Three Months
                                                                   Ended March 31,
                                                                --------------------
                                                                 1999         2000
                                                                -------     --------
<S>                                                             <C>         <C>
Net cash provided by (used in) operating activities             $   126     $(1,082)
                                                                -------     -------
Cash flows from investing activities:

         Capital expenditures                                        (4)       (156)
         Capitalized software costs                                (218)         --
                                                                -------     -------

Net cash used in investing activities                              (222)       (156)
                                                                -------     -------

Cash flows from financing activities:

         Net increase in line of credit                             339         383
         Proceeds from issuance of common stock, net                500          --
         Repayments of long-term debt                                --        (112)
         Repayments of Bridge Loan                                   --        (350)
         Proceeds from the exercise of stock options
           and warrants                                               9          --
                                                                -------     -------
Net cash provided by (used in) financing activities                 848         (79)
                                                                -------     -------
Effect of exchange rate changes on cash and cash
  equivalents                                                        (9)          7
                                                                -------     -------
Net change in cash and cash equivalents                             743      (1,310)
                                                                -------     -------
Cash and cash equivalents at beginning of period                  2,029       2,645
                                                                -------     -------
Cash and cash equivalents at end of period                      $ 2,772     $ 1,335
                                                                =======     =======
</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
                        Three months ended March 31, 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:


                                             December 31,          March 31,
                                                1999                 2000
                                             ------------          --------
                                                  (dollars in thousands)

        Finished goods                          $251                 $172
        Replacement parts                        374                  349
                                                ----                  ---
                                                $625                 $521
                                                ====                 ====

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 May 5, 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 March 31, 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 $12.26 per share). This
    adjustment applies to a maximum of 590,785 shares of Common Stock. In April
    1998, in accordance with the purchase agreement and related documents
    pursuant to which the Company acquired HIS in August 1996, the Company
    issued 246,453 additional shares of Common Stock valued at par. At March 31,
    2000, the fair market value of the Company's Common Stock was $0.875 per
    share, which would result in approximately 6,656,000 additional shares being
    issued.

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):

                                               January 1, 1999 -
                                                 June 19, 1999
                                               -----------------
             Revenue                                $1,696
             Operating income                           80
             Total assets at period end              3,800


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. 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.


                                       6


<PAGE>   7

    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, 2002. The facility was again amended on April 13, 2000. In accordance
    with the amendment, the Bridge Loan and the credit facility will bear
    interest at prime plus 4.5% and require $35,000 weekly principal payments on
    the Bridge Loan until it is paid 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, 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 convenants, including a
    minimum consolidated net worth, debt coverage ratio and minimum quarterly
    profitability. The Company was in compliance with these covenants as of
    March 31, 2000.

    At December 31, 1999 and March 31, 2000, approximately $2,892,000 and
    $3,275,000, respectively, was available and drawn down under the credit
    facility.

    Loan origination fees of approximately $130,000 were incurred in connection
    with the line of credit, 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 $452,000 as of March 31, 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 March 31,
    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:

                                                     For the Three Months
                                                        Ended March 31,
                                                   -----------------------
                                                     1999           2000
                                                   -------        --------
                                                    (dollars in thousands,
                                                    except per share data

    Numerator:

    Numerator for basic and diluted earnings
       (loss) per share - net (loss) income        $ 1,209        $ (1,155)
                                                   =======        ========

    Denominator:

    Denominator for basic earnings (loss) per
       share-weighted average number of
       common shares outstanding during
       the period                                   10,836          10,907

    Incremental common shares attributable
       to exercise of outstanding options               89              --
                                                   -------        --------
    Denominator for diluted earnings (loss)
       per share                                    10,925          10,907
                                                   =======        ========
    Basic earnings (loss) per share                $  0.11        $  (0.11)
                                                   =======        ========
    Diluted earnings (loss) per share              $  0.11        $  (0.11)
                                                   =======        ========

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 second 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.


                                       8


<PAGE>   9

10. LEGAL PROCEDDINGS

    Chapter 11 Bankruptcy Proceedings

    At March 31, 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%.

    CSA Private Limited

    On October 5, 1998, CSA Private Limited ("CSA") filed a lawsuit against the
    Company in the U.S. District Court for the Central District of California.
    CSA is a shareholder of the Company. At the time of the Company's purchase
    of Hotel Information Systems, Inc. ("HIS") in 1996, CSA was a shareholder of
    HIS and, in connection with the purchase, the Company agreed to issue to CSA
    shares of the Company's common stock worth approximately $4.8 million (plus
    accrued interest until such time as the shares are issued and registered),
    and also granted CSA certain demand registration rights with respect to such
    stock. CSA subsequently requested registration of its shares and, in
    October, 1996, the Company filed an S-3 registration statement with the
    Securities and Exchange Commission ("SEC") for the purpose of registering
    these shares. The SEC, however, required an auditor's consent to the use of
    the HIS financial statements in the S-3, which consent HIS's previous
    auditors were unwilling to provide. When this impediment to registration was
    removed in April, 1998, CSA again demanded registration of its shares. The
    Company has delayed registration based upon a provision in its agreements
    with CSA allowing the Company to defer such registration under certain
    circumstances provided that, during the period of such delay, an increased
    interest rate is applied in calculating the dollar value of shares of the
    Company's common stock to which CSA is ultimately entitled. In its lawsuit,
    CSA alleged that the Company's failure to register its shares had deprived
    it of its ability to realize approximately $5,000,000 from sale of the
    shares to which it is entitled and requested (a) money damages in an amount
    not less than $5,000,000, (b) injunctive relief directing the Company to
    register CSA's shares, and (c) specific performance of its agreements with
    the Company.

    The initial delay in registration of CSA's shares was the result of the
    refusal on the part of HIS's previous auditors to consent to the inclusion
    of HIS's financial statements in the S-3, a factor beyond the Company's
    control, and the subsequent delay has been the result of the Company's good
    faith exercise of its rights under its agreements with CSA to defer
    registration. Accordingly, the Company believed that it was in full
    compliance with all of its obligations under its agreements with CSA, and
    contested the lawsuit.

    On June 4, 1999, the court entered a stipulation and order of dismissal,
    dismissing the lawsuit with prejudice. The order was entered as part of a
    settlement, which requires the Company to take all necessary steps to
    register the CSA shares with the SEC by November 1999. Because the Company
    did not register the shares with the SEC, CSA initiated another lawsuit in
    December 1999 seeking (a) seeking damages in excess of $5 million; (b)
    enforcement of the settlement agreement; and (c) injunctive relief through
    court order to cause the Company to file a S-1 registration statement. The
    Company answered the complaint in March 2000 and intends to proceed as
    expeditiously as possible to file the required S-1 registration statement
    utilizing year-end information contained in its Annual Report on Form 10-K.

    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 asserts claims for breach of contract, unjust
    enrichment, accounting and unfair competition. The Complaint seeks 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 asserts claims for breach of the parties exclusive license
    agreement, breach of the covenant of good faith and fair dealing, unfair
    business practices, interference with contractual relations and declaratory
    relief, and a declaration that MAI is not in breach of the parties' license
    agreement. No trial date has been set.


                                       9

<PAGE>   10

    Wang Global Corporation

    On November 25, 1996 the Company executed outsource agreements with Wang
    Global Corporation ("Wang") 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 filed for
    arbitration in this matter involving alleged 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. Settlement of the dispute is
    currently being discussed. Absent a settlement, the arbitration will
    commence on June 7, 2000.

    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:

                                                 For The Three Months
                                                    Ended March 31,
                                                ---------------------
                                                 1999           2000
                                                ------        -------
        Net (loss) income                       $1,209        $(1,155)

        Change in cumulative translation
          adjustments                               10            234
                                                ------        -------

        Comprehensive (loss) income             $1,219        $  (921)
                                                ======        =======

         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 March 31, 2000, working capital improved from a working capital deficiency of
$14,381,000 at December 31, 1999 to a working capital deficiency of $14,250,000.
Excluding unearned revenue of $7,968,000, the Company's working capital
deficiency at March 31, 2000 would be $6,282,000 or a ratio of current assets to
current liabilities of 0.65 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 $326,000 was primarily attributable to decreases in the Coast Bridge Loan of
$350,000, accounts payable of $782,000, deposits of $796,000 and accrued
liabilities of $717,000 offset by decreases in cash of $1,310,000 and
receivables of $1,072,000.

Cash was $1,335,000 at March 31, 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
March 31, 2000, approximately $3,275,000 was available and drawn down under this
facility. The facility expires on April 30, 2002.

Net cash used for investing activities for the three months ended March 31,
2000, totaled $156,000, which represented capital expenditures.

Net cash used by financing activities for the three months ended March 31, 2000
totaled $79,000, which is comprised of $112,000 and $350,000 in repayments of
long-term debt and Bridge Loan, respectively, offset by a $383,000 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
$13,490,000 at March 31, 2000, primarily as a result of a net loss of $1,155,000
for the period. 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 three months ended March 31, 2000
totaled $1,082,000 and mainly related to the Company's net loss of $1,155,000,
decreases in accounts payable and customer deposits of $1,578,000 and accrued
liabilities of $717,000 offset by non-cash charges for depreciation and
amortization of tangible and intangible assets, of $819,000, a decrease in
receivables of $1,023,000, an increase in deferred revenue of $195,000 and a net
loss from foreign currency of $227,000. The Company expects that it will
generate cash from its operating activities in fiscal 2000.

Although the Company has a net stockholders' deficiency of $13,490,000 at March
31, 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 $17 million backlog as of March 31, 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 March 31, 1999 Compared to Three Months Ended March 31, 2000

<TABLE>
<CAPTION>
                                       Three Months Ended       Percentage   Three Months Ended      Percentage
                                         March 31, 1999         of Revenue     March 31, 2000        of Revenue
                                       ------------------       ----------   ------------------      ----------
<S>                                         <C>                     <C>            <C>                  <C>
Revenues:
    Hospitality                            $ 10,280                63.9%           $5,621               62.7%
    Process Manufacturing                     2,268                14.1%            1,460               16.3%
    Gaming                                      359                 2.2%               --                 --
    Legacy                                    3,177                19.8%            1,891               21.0%
Total revenue                                16,084               100.0%            8,972              100.0%
Gross profit                                  9,068                56.4%            4,177               46.6%
Selling, general and administrative
  expenses                                    5,836                36.2%            3,294               36.7%
Research and development costs                1,202                 7.5%            1,043               11.6%
Amortization of intangibles                     610                 3.8%              655                7.3%
Other operating (income) expense                (41)                0.2%               37                0.4%
</TABLE>

The quarter-to-quarter decrease in overall revenue of 44.2% was due primarily to
decreases in sales of hospitality enterprise solutions. Hospitality revenue
decreased 45.3% from $10,280,000 in 1999 to $5,621,000 in 2000, largely due to
decreased sales of software and professional services. Process manufacturing
revenue decreased 35.6% from $2,268,000 in 1999 to $1,460,000 in 2000 due to
product transition. Gaming revenue decreased $359,000 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 40.5%
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 46.6% in 2000 from 56.4% 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 43.6% from
$5,836,000 in 1999 to $3,294,000 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 13.2% 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 7.3% increase in amortization of intangibles versus the comparable period of
1999 is due to the increased amortization expense associated with capitalized
software development costs at the Company's Process Manufacturing division.

Other operating expense for the three months ended March 31, 2000 was
principally from foreign exchange losses.

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.


                                       12

<PAGE>   13

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 second
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.


                                       13

<PAGE>   14

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 $10.5 million principal amount of indebtedness at March 31,
2000, $4.4 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 $44,000
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 March 31, 2000.


                                       14

<PAGE>   15

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


Chapter 11 Bankruptcy Proceedings

At December 31, 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 is an 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 our common stock worth approximately $4.8
million in August 1996, which amount has increased to approximately $6,342,000
as of March 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 Private Limited
("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) 10,764,000 additional shares, assuming a stock price of $0.563
per share, which MAI will issue to CSA in order for them to receive net proceeds
of approximately $6,393,000 after deducting any discounts or commissions. MAI
may be required under the settlement agreement to issue and register additional
shares for sale by CSA, in order that they receive net proceeds in the amount
called for by the settlement agreement. 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.
MAI answered the complaint in March 2000 and intends to proceed as expeditiously
as possible to file the required S-1 registration statement utilizing year-end
information contained in its Annual Report on Form 10-K.

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 asserts claims for breach of contract, unjust
enrichment, accounting and unfair competition. The Complaint seeks 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
asserts claims for breach of the parties' exclusive license agreement, breach of
the covenant of good faith and fair dealing, unfair business practices,
interference with contractual relations and declaratory relief, and a
declaration that MAI is not in breach of the parties' license agreement. No
trial date has been set.

Wang Global Corporation

On November 25, 1996 the Company executed outsource agreements with Wang Global
Corporation ("Wang") 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 filed for arbitration in this
matter involving alleged 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's position is that no additional amounts are
due to Wang. Settlement of the dispute is currently being discussed. Absent a
settlement, the arbitration will commence on June 7, 2000.


                                       15


<PAGE>   16

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.

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

        (a) None.

        (b) None.

        (c) None.

        (d) None.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits.

            27 -- Financial Data Schedule.

        (b) Reports on Form 8-K.

            None.


                                       16

<PAGE>   17

                                   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: May 15, 2000                      /s/ James W. Dolan
                                        -----------------------
                                        James W. Dolan
                                        Chief Financial Officer
                                        (Chief Financial and
                                        Accounting Officer)



                                       17
<PAGE>   18
                                 EXHIBIT INDEX

                 EXHIBIT
                 NUMBER           DESCRIPTION
                 -------          -----------

                  27          Financial Data Schedule