UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _______ to _______
                         Commission file number: 0-25713

                             AREMISSOFT CORPORATION
                        ---------------------------------
             (Exact name of Registrant as specified in its charter)

   DELAWARE                          7372                         68-0413929
(STATE OR OTHER          (PRIMARY STANDARD INDUSTRIAL         (I.R.S. EMPLOYER
JURISDICTION OF               CLASSIFICATION CODE)           IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)


                             AREMISSOFT CORPORATION
                               SENTRY OFFICE PLAZA
                          216 HADDON AVENUE, SUITE 607
                           WESTMONT, NEW JERSEY 08108
                                  856-869-0770
          (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
             AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
                                 ROYS POYIADJIS
                    PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER
                             AREMISSOFT CORPORATION
                               SENTRY OFFICE PLAZA
                          216 HADDON AVENUE, SUITE 607
                           WESTMONT, NEW JERSEY 08108
                                  856-869-0770
            (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                              INCLUDING AREA CODE)
                            ------------------------

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 (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes   [ X ]        No [      ]

The number of shares  outstanding of the Registrant's  Common Stock on April 25,
2001 was 39,275,611 shares.

<PAGE> 2
                             AREMISSOFT CORPORATION

                                      INDEX



PART I - FINANCIAL INFORMATION                                              PAGE

Item 1.   Financial Statements:

          Consolidated Balance Sheets as at                                    3
          March 31, 2001 and December 31, 2000

          Consolidated Statements of Operations                                5
          for the three months ended March 31, 2001 and March 31, 2000

          Consolidated Statements of Cash Flows                                6
          for the three months ended March 31, 2001 and 2000

          Notes to Interim Consolidated Financial Statements                   7


Item 2.   Management's Discussion and Analysis of Financial                   12
          Condition and Results of Operations


Item 3:   Quantitative and Qualitative disclosures about market risk          17


PART  II - OTHER INFORMATION

Item 1--Legal Proceedings                                                     17

Item 2--Changes in Securities and Use of Proceeds                             17

Item 3--Defaults upon Senior Securities                                       17

Item 4--Submission of Matters to a Vote of Security Holders                   17

Item 5--Other Information                                                     17

Item 6--Exhibits and Reports on Form 8-K                                      18

SIGNATURES                                                                    18


<PAGE> 3
PART 1-FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


                             AREMISSOFT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                            DEC. 31             MARCH 31
                                              2000                 2001
                                              ----                 ----
                                                               (unaudited)
        ASSETS
Current assets
Cash and cash equivalents                   $33,331             $103,267
Accounts receivable, less
allowances for doubtful accounts
of $831 at Dec 31, 2000 and
March 31, 2001 respectively                  38,660               37,107
Other receivables                             2,229                1,925
Inventory                                     1,413                1,495
Deposits paid on services and
maintenance contracts                         4,719                4,825
Prepaid expenses and other assets             3,885                4,390

Total Current Assets                         84,237              153,009
Investments                                   1,803                1,863
Property and equipment, net                   3,402                3,567
Purchased and developed software,
net of accumulated
Amortization of $6,194 and $6,282
at December 31, 2000 and
March 31, 2001 respectively.                    783                  570
Intangible assets, net of
accumulated amortization of $16,949
and $20,413 at Dec 31, 2000 and
March 31, 2001 respectively                  34,799               36,031

Total assets                                125,024              195,040

                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                              4,290                3,906
Accrued payroll taxes                         1,479                1,414
Accrued value added taxes                     1,181                  640
Accrued income taxes                          6,006                1,977
Current portion of capital
lease obligations                                34                   24
Other accrued expenses                        2,348                3,027
Bank loans and short-term
demand facility                                   -                    9
Deferred revenue                             12,056               12,176

Total Current liabilities                    27,394               23,173
Long-term debt                                                        27
Capital lease obligations,
 less current portion                            45                   38

Total liabilities                            27,439               23,238


<PAGE> 4
                             AREMISSOFT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                            DEC. 31             MARCH 31
                                              2000                2001
                                              ----                ----
                                                               (unaudited)

Stockholders' equity
Stockholders' equity
Preferred stock, par value
$0.001; authorized 15,000 shares;
and no shares outstanding                         -                    -
Common stock, par value $0.001;
authorized 85,000 shares;
35,198 and 39,245 shares issued
and outstanding at Dec. 31,
2000 and March 31, 2001, respectively            35                   39
Additional paid-in capital                   85,831              155,537
Accumulated profit                           13,781               18,319
Accumulated other comprehensive
 income (loss)                               (2,062)              (2,093)
Total stockholders' equity                   97,585              171,802

Total liabilities and
stockholders' equity                        125,024              195,040

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



<PAGE> 5

                             AREMISSOFT CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                           For three months ended March 31
                                                2000              2001
                                                ----              ----
                                            (unaudited)       (unaudited)
Revenues
  Software Licences                           $11,137           $19,472
  Maintenance and Services                      9,132            17,422
  Hardware and Other                            1,248             2,338

Total revenues                                 21,517            39,232

Cost of revenues
  Software Licences                             1,192             2,211
  Maintenance and Services                      2,822             5,601
  Hardware and Other                              988             1,639
  Amortization of purchased software and
  capitalized software development costs           74                88

Total cost of revenues                          5,076             9,539

Gross profit                                   16,441            29,693

Operating Expenses
   Sales and marketing                          8,053            12,479
   Research and development                     1,853             2,785
   General and administrative                   2,396             5,400
   Amortization of intangible assets            1,151             3,464
   Transition related expenses                      -               240

Total operating expenses                       13,453            24,368

Profit from operations                          2,988             5,325
Other income
  Interest income, net                              -               625
  Non-operating income                            131                 -

Income before income taxes                      3,119             5,950
  Income tax expense                              624             1,412

Net Income                                      2,495             4,538

Basic net income per share                      $0.08             $0.12
Diluted net income per share                    $0.07             $0.11
Basic weighted average shares outstanding      30,404            37,875
Diluted weighted average shares outstanding    34,522            39,852

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



<PAGE> 6

                             AREMISSOFT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<S>                                                           <C>              <C>

                                                              For three months ended March 31
                                                                   2000            2001
                                                                   ----            ----
                                                               (unaudited)     (unaudited)
CASH FLOW FROM OPERATING ACTIVITIES:

Net income                                                       $2,495          $4,538
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation                                                        188             266
Amortization                                                      1,225           3,552

Changes in assets and liabilities, net of acquisitions:
Accounts receivable                                               1,059           1,492
Other receivables                                                  (424)            303
Inventory                                                           316             (84)
Deposits paid on service and maintenance contract                   976            (106)
Prepaid expenses and other assets                                   591            (519)
Accounts payable                                                 (2,756)         (1,335)
Deferred revenue                                                   (935)           (403)
Accrued taxes payable                                              (319)         (4,501)
Other accrued expenses                                             (327)            548

Net cash provided by operating activities                         2,089           3,751

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                (301)           (388)
Payment for acquisition, net of cash
                                                                                 (2,933)

Net cash used in investing activities                              (301)         (3,321)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants and employee stock options        75          58,849
Net proceeds from issuance of stock                                   -          10,862
Principal payments of long term borrowings                            -             (11)
Principal payments of capital lease obligations-net                 (24)            (14)
Short-term demand facility                                            3               9

Net cash provided by financing activities                            54          69,695

Net increase in cash & cash equivalents                           1,842          70,125
Effect of foreign currency exchange rates on cash and
cash equivalents                                                     10            (189)
Cash and cash equivalents, at beginning of period                13,386          33,331
Cash and cash equivalents, at end of period                     $15,238        $103,267

Supplemental disclosure:
Income Tax paid                                                       -           5,441
</TABLE>

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

<PAGE> 7

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1. BASIS OF PRESENTATION

The accompanying  unaudited  consolidated financial statements and notes thereto
have been prepared in accordance with generally accepted  accounting  principles
for interim  financial  information and pursuant to the rules and regulations of
the Securities and Exchange  Commission.  Interim  results of operations for the
three-month  period  ended  March 31,  2001 are not  necessarily  indicative  of
operating results for the full fiscal year.

In the opinion of management,  all  adjustments  consisting of normal  recurring
entries  necessary  for the  fair  presentation  of the  consolidated  financial
position,  results of  operations,  and  changes  in cash flows for the  periods
presented  have been  included.  The  preparation  of  financial  statements  in
conformity with generally accepted accounting  principles requires management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

The  balance  sheet at  December  31,  2000 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial  statements.  These  interim  financial  statements  should be read in
conjunction with the audited financial  statements and the notes therein for the
year ended December 31, 2000.


2. FOREIGN CURRENCY TRANSLATION

The primary  functional  currency of the  Company  and its  subsidiaries  is the
United States dollar.  However,  the functional currency of certain subsidiaries
is their local currency.

For reporting purposes,  the financial statements are presented in United States
dollars and in accordance  with Statement of Financial  Accounting  Standard No.
52,  "Foreign  Currency  Translation".   The  consolidated  balance  sheets  are
translated  into United States dollars at the exchange  rates  prevailing at the
balance  sheet  dates and the  statements  of  operations  and cash flows at the
average exchange rates for the relevant periods. Gains and losses resulting from
translation  are  included as a component  of  accumulated  other  comprehensive
income (loss).

Net gains and losses resulting from foreign  exchange  transactions are included
in the consolidated statements of operations.

<PAGE> 8


3. NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):

<TABLE>
<S>                                                                 <C>            <C>


                                                                    For three Months Ended
                                                                            March 31
                                                                       2000          2001
                                                                       ----          ----

Numerator used for both basic and diluted earnings per share          2,495         4,538

Denominator for basic earnings per share:
  Weighted average shares outstanding                                30,404        37,875

Denominator for diluted earnings per share:
  Denominator for basic earnings per share                           30,404        37,875
  Effect of dilutive securities:
     Options and Warrants                                             4,118         1,977

  Weighted average shares outstanding                                34,522        39,852

Basic Earnings per share                                              $0.08         $0.12
Diluted Earnings per share                                            $0.07         $0.11
</TABLE>



4. COMPREHENSIVE INCOME

The Company  follows the  provisions of SFAS No. 130,  "Reporting  Comprehensive
Income"  ("SFAS No. 130") which  establishes  standards  for the  reporting  and
display  of   comprehensive   income  and  its  components  in  a  full  set  of
general-purpose   financial   statements.   Included  within  accumulated  other
comprehensive income are the cumulative amounts for foreign currency translation
adjustments.

Comprehensive  income for the three  months ended March 31, 2000 and 2001 are as
follows (in thousands):

                                                   2000            2001
                                                   ----            ----

Net income                                       $ 2,495          $4,538
Foreign currency translation adjustments              10             (31)
                                                 -------          -------

Comprehensive income                             $ 2,505          $4,507
                                                 -------          -------


5. SEGMENT REPORTING INFORMATION

The  Company  develops,   markets,   implements  and  supports   enterprise-wide
applications  software  targeted  at  mid-sized   organizations  mainly  in  the
manufacturing,  healthcare, hospitality, and construction industries. Management
considers  each  industry  to  be  a  reportable  segment,  with  each  industry
representing a strategic  business that offers  products and services to various
customers.  These  industries  are  managed  separately  because  each  requires
different product and marketing  strategies.

<PAGE> 9

Within each  industry,  the Company has  adopted  tailored  sales and  marketing
strategies.   These   strategies   include   advertisements   in  leading  trade
publications,  participation  in trade shows and sponsorship of user groups.  In
addition,  the Company has developed  corporate sales and marketing  material as
well as general financial and technical material that are distributed to each of
the  Company's  subsidiaries  for  inclusion  in their sales  material,  thereby
promoting a  consistent  portrayal  of the  Company's  image and  products.  The
Company markets its products  primarily  through a direct sales force in each of
the industries.  In the  manufacturing and hospitality  industries,  the Company
also  relies,  to a  limited  extent,  on  distributors  to sell  the  Company's
products.

The accounting policies adopted by each industry are the same as those described
in  the  summary  of  significant  accounting  policies.   Management  evaluates
performance  based on profit/(loss)  from operations  before interest and income
taxes.

Summarized financial information concerning the Company's reportable segments is
shown in the following table (in thousands):
<TABLE>
<S>                                   <C>                <C>          <C>           <C>              <C>           <C>


                                        MANUFACTURING    HEALTHCARE   HOSPITALITY   CONSTRUCTION     OTHER         TOTAL


Segmental analysis for the three months ended March 31, 2001

Revenues from external customers            $14,137        $6,830       $13,375        $3,566        $1,324       $39,232
Depreciation and amortization                 1,088           676         1,752           134           168         3,818
Profit from operations                        2,447         1,086         1,281           406           105         5,325
Total segment assets                         63,350        28,495        69,234        19,913        14,048       195,040


Segmental analysis for the three months ended March 31, 2000

Revenues from external customers             $6,797        $6,786        $5,199        $1,555        $1,180       $21,517
Depreciation and amortization                   326           358           333            75           321         1,413
Profit (loss) from operations                 1,544           682           756           155          (149)        2,988
Total segment assets                         16,875        14,124        12,787         3,347        12,033        59,166

</TABLE>

The following table  represents  revenue by country based on country of customer
domicile  and  long-lived  assets by country of the  location  of the assets (in
thousands):
<TABLE>
<S>                                        <C>            <C>          <C>         <C>


                                                   Revenues               Long-Lived Assets
                                           Mar 31, 2000   Mar 31, 2001 Mar 31,2000 Mar 31,2001
                                           ------------   ------------ ----------- -----------

               Europe                           $16,016        $23,851      $2,006      $4,268
               United States                        666          3,147          98      12,294
               Asia                               1,590          6,989      15,178      25,357
               Rest of World                      3,245          5,245          14         112
                                                 ------         ------      ------     -------
                                                $21,517        $39,232     $17,296      42,031
                                                -------        -------     -------      ------

</TABLE>

6. INVESTMENTS

Investments in the main comprise 11,340,000 shares of common stock (representing
a  7.1%  interest  in  the  total  outstanding   shares)  in   LK.GlobalSoft.com
("GlobalSoft").  GlobalSoft is a software development company with operations in
Cyprus,  Eastern  Europe and  Middle  East,  and is traded on the  Cyprus  Stock
Exchange.  The Company's  ability to liquidate  this  investment and realize all
profits  on a  short-term  basis  is  restricted  due  to  certain  governmental
regulations in Cyprus.  Management has determined  that this investment does not
meet the  criteria of a marketable  equity  security as defined by SFAS No. 115,
"Accounting  for  Certain  Investments  in Debt  and  Equity  Securities",  and,

<PAGE> 10

therefore,  records it on the cost basis of  accounting.  Based upon the trading
price of  GlobalSoft's  common stock on the Cyprus  Stock  Exchange at March 31,
2001,  the value of the  Company's  investment  approximated  $49  million.  The
Company's  Chairman  is  also  the  non-executive   Chairman  of  the  Board  of
GlobalSoft.

On April 30, 2001 the Company  announced the signing of certain  agreements with
certain  controlling  shareholders  of GlobalSoft  which gave the Company voting
control over GlobalSoft with an option to increase its ownership percentage from
7.1% to 59.5% of the total outstanding shares of capital stock (see note 8).

7. ACQUISITIONS

In February 2001, the Company completed the purchase of assets and assumption of
certain liabilities of Rio Systems International, Inc. for $2.44 million in cash
consideration,  plus the  potential  for  additional  consideration  based on an
earn-out  formula  over 15 months.  Rio Systems is a supplier  of an  integrated
hospitality  suite of  software  applications  that serve the spa,  resort,  and
premium hotel markets. The acquisition brings to the Company over 100 customers,
primarily  located in the U.S.

In February  2001,  the Company  entered into an agreement to acquire all of the
issued and outstanding shares of Fourth Shift Corporation,  a worldwide supplier
of enterprise  resource planning (ERP) and e-business  software.  The closing of
this  acquisition  occurred on April 30, 2001, and accordingly the operations of
Fourth  Shift have not been  included  in the  Company's  results for the period
ended March 31, 2001. Under the terms of agreement, the Company will acquire all
of the  outstanding  common  stock of  Fourth  Shift for $3.70 per share in cash
(without  interest)  for  a  consideration  of  approximately  $41  million.  In
addition,  each outstanding option to purchase Fourth Shift's common stock under
Fourth  Shift's  stock  option  plans will be assumed by the  Company,  with the
number of shares and  exercise  price  adjusted  pursuant to a formula.

The pro forma  unaudited  results of operations for the three months ended March
31,  2000 and  March  31,  2001  assuming  consummation  of these  two  purchase
transactions  occurred on January 1, 2000 are as follows (in  thousands,  except
per share data):

                                      For three Months Ended
                                              March 31
                                         2000          2001
                                         ----          ----

Revenue                               $38,471       $52,925
Net income (loss)                     (2,215)       (2,009)
Per share data:
   Basic earnings (loss)               (0.07)        (0.05)
   Diluted earnings (loss)             (0.07)        (0.05)


8. SUBSEQUENT EVENT - PROPOSED ACQUISITION

On April 30, 2001,  the Company  entered into  certain  agreements  with certain
shareholders of GlobalSoft which  immediately  transferred  their voting control
over GlobalSoft to the Company.  In addition,  under the terms of the agreements
with these shareholders, the Company acquired a five year option to increase its
ownership  in  GlobalSoft  (see  note 6) from 7.1% to 59.5% by  acquiring  their
shares.  By  exercising  the options under the  agreements,  the Company has the
right to acquire  approximately  83.56 million  ordinary shares or approximately
52.4% of the issued and outstanding  shares of capital stock of GlobalSoft.

<PAGE> 11

The transaction  between the Company and these  shareholders is structured as an
option and voting agreement which may be terminated by the selling  shareholders
upon 15 days prior written notice if:

o    The Company does not exercise the option to acquire  28.535  million shares
     from  these  shareholders  at a fixed  price of $3.825 per share by May 31,
     2001.  The initial  exercise  of the options  will result in an increase in
     ownership by the Company to 25.0% of GlobalSoft's  total outstanding shares
     of capital stock.

o    On or prior to September 30, 2001, the Company does not exercise the option
     to acquire an additional 15.95 million shares from these same  shareholders
     at a fixed  price of $3.825  per  share,  provided  that such  exercise  is
     accretive  to  the  Company's  earnings  based  upon  GlobalSoft's  current
     internal  financial  projections.  The  exercise  of  these  options  would
     increase  the  Company's  ownership  of  GlobalSoft  to 35.0% of the  total
     outstanding shares of capital stock.

o    On or prior to December 31, 2001,  the Company does not exercise the option
     to acquire an additional 15.95 million shares from these same  shareholders
     at a fixed  price of $3.825  per  share,  provided  that such  exercise  is
     accretive  to  the  Company's  earnings  based  upon  GlobalSoft's  current
     internal  financial  projections.  The  exercise  of  these  options  would
     increase  the  Company's  ownership  of  GlobalSoft  to 45.0% of the  total
     outstanding shares of capital stock.

o    On or prior to September 30, 2002, the Company does not exercise the option
     to acquire an additional 23.125 million shares from these same investors at
     a fixed price of $4.781 per share, provided that such exercise is accretive
     to  the  Company's  earnings  based  upon  GlobalSoft's   current  internal
     financial  projections.  The exercise of these options  would  increase the
     Company's  ownership of GlobalSoft to 59.5% of the total outstanding shares
     of capital stock.

The Company  has the option of  utilizing  any mixture of cash,  stock or seller
financed debt (with a 3-year term and a 4% interest  rate) as  consideration  at
each phase of the transaction. As of May 15, 2001, the Company had not exercised
any of the above options. Assuming the Company completes the initial exercise of
the options,  the accounts of  GlobalSoft  will be fully  consolidated,  with an
adjustment to account for the minority interest.

Summarized unaudited financial  information of GlobalSoft as of and for the year
ended December 31, 1999 and 2000 are as follows (in  thousands):

                                       1999          2000
                                       ----          ----

Current assets                       $10,197       $51,250
Non current assets                    11,928        63,722
                                      ------        ------
                                      22,125       114,972

Current liabilities                    2,088        18,676
Non current liabilities                  118           901
                                         ---           ---
                                       2,206        19,577
Equity                                19,919        95,395
                                      ------        ------
                                      22,125       114,972

Revenue                                7,328        69,039
Net income                             2,855        22,772

<PAGE> 12

Item 2: MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995. The following Management's  Discussion
and Analysis of Financial  Condition and Results of Operations should be read in
conjunction with the Notes to the Condensed  Consolidated  Financial  Statements
included  in  Part  I,  Item  1, of this  report.  All  statements,  other  than
historical facts,  included in the following  discussion regarding our financial
position,  business strategy,  and plans of management for future operations are
"forward-looking statements." These statements are based on management's beliefs
and assumptions,  and on information currently available to management.  Forward
looking  statements  include,  but are not limited to, statements in which words
such  as  "expect",  "anticipate",   "intend",  "plan",  "believe",  "estimate",
"consider", or similar expressions are used.  Forward-looking statements are not
guarantees  of  future  performance.  They  involve  risks,  uncertainties,  and
assumptions, including the risks discussed below.

The "Risk  Factors" in our Form 10-K Annual  Report for the year ended  December
31,  2000  are  incorporated  herein  by  reference.   Our  actual  results  and
stockholder  values may differ materially from those anticipated or expressed in
these forward-looking  statements. Many of the factors that will determine these
results and values are beyond our ability to control or predict. Readers of this
report are cautioned not to put undue reliance on any forward-looking statement.
We undertake no obligation to publicly update these forward-looking  statements,
whether as a result of new information, future events or otherwise.

As used in this  report,  the terms  "we,"  "us,"  "our,"  "AremisSoft"  and the
"Company" mean AremisSoft  Corporation and its  subsidiaries,  unless  otherwise
indicated.


OVERVIEW

We develop,  market, implement and support enterprise-wide software applications
primarily  for  mid-sized  organizations  in  the  manufacturing,   hospitality,
healthcare  and  construction   industries.   Our   fully-integrated   suite  of
Internet-enabled   products   allows  our   customers   to  manage  and  execute
mission-critical  functions  within their  organization,  including  accounting,
purchasing,  manufacturing,  customer  service,  and  sales and  marketing.  The
modular  design  of  our  products  enables  us  to  provide  customers  with  a
cost-effective  scalable  solution that can be easily  implemented.  We focus on
mid-sized  organizations  with  annual  revenues  of less than $200  million  to
capitalize on a market we believe is receptive to our  cost-effective  solutions
and shorter implementation periods. Our software applications have been licensed
to more than 6,500 customers in over twenty countries.

Our software  applications  use our internally  developed  three-tiered,  object
oriented  software  architecture,  which we call the Aremis  Architecture.  This
architecture   enables   us  to   develop   software   solutions   rapidly   and
cost-effectively  by taking advantage of the common requirements of customers in
our target  markets.  In  addition,  we believe  that,  with  approximately  300
developers   based  in  our   facilities  in  India,   we  have   established  a
cost-effective  model for  implementing,  supporting  and enhancing our software
applications.

In the past, we have  experienced  rapid  growth,  both  internally  and through
acquisitions,  with  revenues  increasing  from $6.4  million  in 1994 to $123.6
million in 2000. During this period, we successfully acquired and integrated the
operations of numerous businesses, which were principally operating in Asia, the

<PAGE> 13

United  Kingdom,  and in the United States.  In each  acquisition,  we sought to
reduce expenses,  rejuvenate the existing  products of the acquired business and
transition the customers to products that utilize the Aremis  Architecture.  Our
software  development  and  support  facility  in India  provides  us  access to
highly-skilled  technical  personnel who are  responsible for  rejuvenating  the
acquired products and developing new products in a cost-effective manner.

Our  objective  is to be a  leading  provider  of  enterprise-wide  applications
software in the targeted  markets.  Our strategy for  achieving  this  objective
includes (i) targeting mid-sized organizations, including divisions and business
units of larger companies,  (ii) focusing on strategic markets, (iii) leveraging
the our cost-efficient India operations,  (iv) capitalizing on our investment in
the Aremis Architecture, (v) expanding our marketing, sales, support and service
capabilities  and  (vi)  acquiring  related  software  businesses,  products  or
technologies.


RESULTS OF OPERATIONS

Revenues

Total revenues increased 82.3% to $39.2 million for the three months ended March
31,  2001  from  $21.5  million  for the three  months  ended  March  31,  2000.
Approximately  $7.8 million of the revenues were derived from the  operations of
e-ChaRM India Pvt Ltd., Denon  International  Ltd., the hospitality  business of
Verso  Technologies,  Inc.  (formerly  Eltrax  Systems,  Inc.)  and Rio  Systems
International,  Inc.  which were  acquired  in the last  quarter of 2000 and the
first quarter of 2001. The increase in total revenue was due primarily to higher
margin licenses, and associated maintenance and service contract revenues.

Software license revenues  increased 74.8% to $19.5 million for the three months
ended March 31, 2001 from $11.1  million  for the three  months  ended March 31,
2000.  This  increase was primarily due to the growth in the number of installed
customers,  increased  sales of licenses for our Aremis 4.0 products,  and price
increases.  As a percentage of total  revenues,  license  revenues  decreased to
49.6% for the three  months ended March 31, 2001 from 51.8% for the period ended
March 31,  2000.  This  decrease  primarily  reflects  the  change in the mix of
revenues as a result of our  acquisition  of the  hospitality  business of Verso
Technologies,  with a slight decrease in software  license revenues and a slight
increase in maintenance and service contract revenues.

Maintenance and service contract  revenues  increased 90.8% to $17.4 million for
the three  months  ended March 31, 2001 from $9.1  million for the three  months
ended March 31,  2000,  as a result of the  increase in the number of  installed
customers and the growth in software license revenues.  As a percentage of total
revenues, maintenance and service contract revenues increased to 44.4% for three
months ended March 31, 2001 from 42.4% for the period ended March 31, 2000.

Hardware and other revenues  increased 87.3% to $2.3 million for the three-month
ended March 31,  2001 from $1.2  million  for the three  months  ended March 31,
2000. As a percentage of total revenues,  hardware and other revenues  increased
to 6.0% for the three months ended March 31, 2001 from 5.8% for the three months
ended March 31, 2000.

Cost of Revenues

Total cost of revenues  increased  87.9% to $9.5  million  for the three  months
ended March 31,  2001 from $5.1  million  for the three  months  ended March 31,
2000. As a percentage of total revenues, cost of revenues increased to 24.3% for

<PAGE> 14

the three month ended March 31, 2001 from 23.6% for the three months ended March
31,  2000.  The  effect  of  new   acquisitions  on  the  cost  of  revenue  was
approximately $2.2 million for the three months ended March 31, 2001.

The cost of software  license  revenue  increased  85.5% to $2.2 million for the
three  months  ended March 31, 2001 from $1.2 million for the three months ended
March 31, 2000.  This  increase was primarily due to the growth in the number of
installed customers, increased sales of licenses for our Aremis 4.0 products. As
a percentage of total revenues,  the cost of software license revenue  increased
to 5.6% for three  months  ended March 31,  2001 from 5.5% for the three  months
ended March 31, 2000.

The cost of maintenance  and service  contract  revenue  increased 98.5% to $5.6
million for the three  months  ended  March 31,  2001 from $2.8  million for the
three months ended March 31, 2000,  as a result of the increase in the number of
installed customers and the growth in software license revenues. As a percentage
of  total  revenues,  the  cost of  maintenance  and  service  contract  revenue
increased  to 14.3% for three  months  ended  March 31,  2001 from 13.1% for the
three months ended March 31, 2000.

The cost of hardware and other revenue  increased  65.9% to $1.6 million for the
three-month  ended  March 31,  2001 from $1.0  million for the three month ended
March 31, 2000.  As a  percentage  of total  revenues,  the cost of hardware and
other  revenue  decreased to 4.2% for the three months ended March 31, 2001 from
4.6% for the three months ended March 31, 2000.  The decrease was primarily from
obtaining better prices from third-party hardware suppliers.

Sales and Marketing

Sales and Marketing  expenses consist primarily of expenses related to sales and
marketing,  personnel,  advertising,  promotion,  trade shows  participation and
public relations.

Our sales and marketing  expenses increased 55.0% to $12.5 million for the three
months  ended March 31, 2001 from $8.1  million for the three months ended March
31,  2000,  primarily  due to the  expansion of sales and  marketing  activities
principally in Asia,  Europe,  and the United  States.  As a percentage of total
revenues, sales and marketing expenses decreased to 31.8% for three months ended
March 31, 2001, from 37.4% for the three months ended March 31, 2000.

Research and Development

Our research and  development  expenses  increased 50.3% to $2.8 million for the
period  ended March 31, 2001 from $ 1.9 million for the three months ended March
31, 2000. As a percentage of total revenues,  research and development  expenses
decreased  to 7.1% for the  three  months  ended  March  31,  2001  from 8.6% of
revenues for the three months ended March 31, 2000.  The decrease was  primarily
due to the rate of revenue growth exceeding research and development increases.

General and Administrative

General and  administrative  expenses  increased  125.4% to $5.4 million for the
three  months  ended March 31, 2001 from $2.4 million for the three months ended
March 31, 2000. As a percentage of total  revenues,  general and  administrative
expenses increased to 13.8% for the three months ended March 31, 2001 from 11.1%
for the three months ended March 31, 2000. The increase was primarily due to the
increase in operational and geographical  activities compared to the same period
of the  previous  year.  The general and  administration  expenses  include $0.1
million paid to the Indian Prime Minister's earthquake relief fund.

<PAGE> 15

Amortization of Intangible Assets

Amortization of intangible assets increased to $3.6 million for the three months
ended March 31,  2001 from $1.2  million  for the three  months  ended March 31,
2000. The increase in amortization  of intangible  assets is due to the goodwill
recorded on the acquisition of E-ChaRM, Denon, the hospitality division of Verso
Technologies and Rio Systems.

Net Interest Income

Net interest income reflects interest earned on our cash balances reduced by any
interest expense.

We received  approximately  $0.6 million net interest from  deposits  during the
three months ended March 31, 2001.

Transition Related Expenses

For the quarter ended March 31, 2001  transition  related  expenses  amounted to
$0.2 million and consisted of various  payroll and other related costs  incurred
in  connection  with  the  acquisition  of the  hospitality  division  of  Verso
Technologies  in the  fourth  quarter of 2000.  These  costs  generally  include
payroll  related  expense for certain  employees  and  consultants  in the first
quarter through their termination date.

Income Tax Provision

There is a provision  for income taxes for the three months ended March 31, 2001
of $1.4  million.  There was a provision  for income  taxes for $0.6 million the
three months ended March 31, 2000.  The increase in income taxes  resulted  from
the increase in our  profitability in 2001. Our effective tax rate was estimated
at 15% after adjusting for goodwill amortization.

Recoverability  of the deferred tax asset  derived  mainly from  operating  loss
carry  forwards in the United  Kingdom has been reviewed at March 31, 2001,  and
although  certain  subsidiaries  generated  taxable income in the quarter ending
March 31, 2001, no assurances can be given that the level of taxable income will
be  sustained  at an adequate  level in the  appropriate  subsidiaries.  It must
therefore be considered  more likely than not that the deferred tax benefit will
not be recognized at this stage.

LIQUIDITY AND CAPITAL RESOURCES

We have funded our operations since inception primarily through borrowings under
bank credit facilities, private placements of equity and debt securities, equity
contributions by our principal stockholder, our initial public offering and sale
of our registered common stock. In addition,  since 1999, we have generated cash
flows from  operations.  As of March 31, 2001, we had $103.3 million of cash and
cash equivalents. We had a working capital surplus of $129.8 million as of March
31, 2001.

We believe that the existing  cash and cash  equivalents,  will be sufficient to
meet our working capital and currently planned expenditure  requirements for the
next 9 months. We may, from time to time, consider acquisitions of complementary
businesses, products or technologies, which may require additional financing. In
addition,  continued  growth in our  business  may,  from time to time,  require
additional  capital.  No assurances can be given that additional capital will be
available  to us at such time or times as such  capital may be  required  or, if
available,  that it will be on commercially acceptable terms or would not result
in  additional  dilution  to our  stockholders.  We had an  operating  cash flow

<PAGE> 16

surplus of $3.8 million for the three months ended March 31, 2001.  This surplus
was  primarily due to operating  profits and a decrease in accounts  receivable,
mainly  offset by a decrease in accrued tax payable.  We had an  operating  cash
flow  surplus  of $2.1  million  for the three  months  ended  March  31,  2000.
Operating cash flow is affected by seasonality, among other factors.

Accounts  receivable  increased  to $37.1  million for March 31, 2001 from $19.6
million for March 31,  2000.  Accounts  receivable  as at December  31, 2000 was
$38.7  million.  The average  days sales  outstanding  was 82 days for the three
month ended March 31, 2000 and 85 days for the three month ended March 31, 2001.
The increase in accounts receivable was due to our increase in the sales for the
period.

Accrued  taxes  decreased  from $7.9 million at March 31, 2000 to  approximately
$4.0 million at March 31, 2001.  The  decrease was  primarily  due to payment of
income taxes in March 2001.

We utilized cash for  investing  activities of $3.3 million and $0.3 million for
the three months ended March 31, 2001 and March 31, 2000 respectively, primarily
resulting  from  purchases of property and equipment and the  acquisition of Rio
Systems International Inc. in February 2001.

Net cash provided by financing  activities was  approximately  $69.7 million and
$54,000  for  the  three  months  ended  March  31,  2001  and  March  31,  2000
respectively.  For the three  months  ended  March 31,  2001  cash  provided  by
financing  activities resulted from proceeds received from the issuance of stock
and the exercise of warrants and employee stock options.

On April 30, 2001, we completed the  acquisition  of Fourth Shift (see financial
statement  note 7).  Under the terms of the  agreement,  we acquired  all of the
outstanding  shares  of  Fourth  Shift  for  $3.70  per  share in cash  (without
interest) and assumed each outstanding  option to purchase Fourth Shift's common
stock under Fourth  Shift's stock option plan  pursuant to a formula.  The total
cost  of  this  acquisition,   including  purchase  price,   severance  pay  and
professional fees is expected to be approximately  $45 million,  all of which is
expected to be paid in 2001.

Additionally,  on April 30, 2001,  we entered into certain  agreements  with the
controlling  shareholders  of  LK.GlobalSoft.com  ("GlobalSoft")  covering 83.56
million  ordinary  shares  or 52.4% of the  issued  and  outstanding  shares  of
GlobalSoft  (the  "Shares").  The terms of the agreements  immediately  transfer
voting  control over  GlobalSoft  to us. When  combined  with the 11.34  million
shares of GlobalSoft that we already own, we now control 59.5% of the issued and
outstanding shares of GlobalSoft.  The agreements further provide us with a five
year  option to  purchase  the Shares  for a fixed  price of $3.825 per share if
exercised  before  December 31, 2001, and $4.781 if exercised after December 31,
2001. We must exercise the option to purchase 28.535 million of the Shares on or
before May 31, 2001,  or the selling  shareholders  have the right,  but not the
obligation, to terminate the agreements. After this exercise, we will own 39.875
million shares of GlobalSoft, or approximately 25% of the issued and outstanding
shares. Thereafter,  provided that further exercises of the option are accretive
to  our  earnings  per  share,   based  upon  GlobalSoft's   internal  financial
projections, we must exercise the option to purchase an additional 15.95 million
shares, or approximately 10% of the issued and outstanding shares of GlobalSoft,
on or before  September  30, 2001,  and  additional  15.95  million  shares,  or
approximately  10% of the  issued  and  outstanding  shares  of  GlobalSoft,  by
December 31, 2001, and the final 23.125 million shares,  or approximately  14.5%
of the issued and  outstanding  shares of GlobalSoft,  by September 30, 2002, or
the selling  shareholders  have the right, but not the obligation,  to terminate
the  agreements.  Under  the  terms  of the  agreement,  we have the  option  of
utilizing any mixture of cash, stock or seller financed debt (with a 3-year term
and a 4%  interest  rate)  as  purchase  consideration  at  each  phase  of  the
transaction.

<PAGE> 17

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Rates

A portion of our  business in  transacted  in  currencies  other than the United
States dollar. Our functional currency is the United States dollar.  However the
functional currency of certain  subsidiaries is their local currencies.  Because
our financial statements are reported in United States dollars,  fluctuations of
other currencies  against the United States dollar have caused and will continue
to cause us to recognize foreign currency  transaction gains or losses which may
be material to our operations and impact the reported  financial  conditions and
results of operations

Euro Conversion

In  January  1999,  the Euro  was  introduced  as the  currency  of a number  of
participating  nations in the European Union. Although the United Kingdom is not
currently a participating nation, the introduction of the Euro raises conversion
issues for business  transacted  with  entities in  participating  nations.  Our
products  either include or have been upgraded to include the Euro and we do not
believe that the Euro conversion has had or will have a material  adverse effect
on our  business.  Because our critical  internal  systems have been modified to
accommodate a conversion  to the Euro,  we believe it is adequately  prepared in
the event the United Kingdom converts to the Euro in the future.

                           PART II - OTHER INFORMATION

Item 1: LEGAL PROCEEDINGS

None

Item 2: CHANGES IN SECURITIES AND USE OF PROCEEDS.

None

Item 3: DEFAULTS UPON SENIOR SECURITIES.

None

Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

Item 5: OTHER INFORMATION

None



<PAGE> 18


Item 6: EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits: None

     (b)  Report on Form 8-K

          We filed or  furnished  three  reports  on Form 8-K  during  the first
          quarter ended March 31, 2001. Information regarding the items reported
          on is as follows:

          (1) On January 5, 2001, we announced (i) the  two-for-one  stock split
          in the form of a stock  dividend to be made on January 8, 2001 ("Stock
          Split")  and (ii) the  amendment  of our  Form S-3  (Registration  No.
          333-31768)  to include  800,000  additional  shares as a result of the
          Stock Split.

          (2) On January 10, 2001,  we announced the  acquisition  of all of the
          outstanding shares of Denon International Limited.

          (3) On March 5, 2001, we announced (i) the execution of the definitive
          agreement to acquire Fourth Shift Corporation and (ii) the acquisition
          of Rio Systems  International,  Inc. by AremisSoft  Hospitality  (US),
          Inc., our wholly-owned subsidiary.

                                   SIGNATURES


Pursuant to the  requirements  of the Securities Act of 1934, the registrant has
duly  caused  this  registration  statement  to be signed  on its  behalf by the
undersigned,  thereunder duly  authorized,  in the City of Sacramento,  State of
California on May 15, 2001.

                                         AREMISSOFT CORPORATION,
                                         a Delaware Corporation




                                         /s/ Roys Poyiadjis
                                         ---------------------------------------
                                         Roys Poyiadjis
                                         Director and Co-Chief Executive Officer




                                         /s/ Michael Tymvios
                                         ---------------------------------------
                                         Michael Tymvios
                                         Director and Chief Financial Officer