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 SEPTEMBER 30, 1999

                                       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: 333-58351

                             AREMISSOFT CORPORATION

                    (Exact name of Registrant as specified in its charter)

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

                             AREMISSOFT CORPORATION
                          200 CENTRAL PARK SOUTH, #23-A
                               NEW YORK, NY 10019
                                  212-765-7383
          (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
              AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                           DR. LYCOURGOS K. KYPRIANOU
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                             AREMISSOFT CORPORATION
                          200 CENTRAL PARK SOUTH, #23-A
                               NEW YORK, NY 10019
                                  212-765-7383
            (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 October 20,
1999 was 15,130,051 shares.



<PAGE>2


                           AREMISSOFT CORPORATION

                                     INDEX


PART I - FINANCIAL INFORMATION                                             PAGE

Item 1.   Financial Statements:
Consolidated Balance Sheets as at September 30, 1999 and December 31, 1998    3

Consolidated Statements of Operations the three months and nine months ended
  September 30, 1999 September 30, 1998                                       4

Consolidated Statements of Cash Flows for the nine months ended September
  30, 1999 and September 30,1998                                              5

Notes to Interim Consolidated Financial Statements                            6

Item 2.   Management's Discussion and Analysis of Financial Condition and
 Results of Operations                                                        9

Item 3:   Quantitative and Qualitative disclosures about market risk         16

PART  II - OTHER INFORMATION

Item 1--Legal Proceedings                                                    16

Item 2--Changes in Securities and Use of Proceeds                            16

Item 3--Defaults upon Senior Securities                                      16

Item 4--Submission of Matters to a Vote of Security Holders                  16

Item 5--Other Information                                                    16

Item 6--Exhibits and Reports on Form 8-K                                     16

SIGNATURES                                                                   17



<PAGE>3


                       PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

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

<S>                                                                      <C>           <C>
                                                                         September 30  December 31
                             ASSETS                                          1999        1998
                                                                         ---------------------------
                                                                                       (Note 1)

Current Assets
Cash and cash equivalents                                                $6,537          $149
Accounts receivable, less allowances for doubtful accounts
  of $ 639 at December 31, 1998 and September 30,1999                    17,746        16,166
Other receivables                                                         1,456           903
Inventory                                                                   711           787
Deposits paid on Services and Maintenance Contracts                         945         3,531
Prepaid Expenses and other assets                                         2,213         1,135
                                                                          -----         -----
Total Current Assets                                                     29,608        22,671
Loan receivable -related party                                            1,898         1,886
Property and equipment, net                                               1,855         1,774
Purchased and developed software, net of accumulated
  amortization of $6,075 and $ 6,257 at December 31, 1998
  and September 30, 1999 respectively                                     1,102         1,284
Intangible assets, net of accumulated amortization of $ 13,036
  and $ 13,300 at December 31, 1998 and September 30, 1999,                  73           337
  respectively                                                          -------         -----

Total  assets                                                            34,536        27,952
                                                                         ------        ------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable                                                          2,862         3,669
Accrued payroll taxes                                                       524           586
Accrued value added taxes                                                   301         1,649
Accrued income taxes                                                      5,306         2,059
Current portion of capital lease obligations                                 35            55
Other accrued expenses                                                      475         2,946
Bank loans and short term demand facility                                     -        15,530
Deferred revenue                                                          4,793         6,693
                                                                          -----        -----
Total Current Liabilities                                                14,296        33,187
Long-term debt                                                            7,908             -
Loan and accrued interest payable -related party                              -         1,781
Capital lease obligations, less current portion                              67            93
                                                                         ------         -----

Total liabilities                                                        22,271        35,061
Stockholders' equity (deficit)
Series-A convertible preferred stock, par value $0.001;
authorized 2,100 shares;
  Liquidating preference at par value                                         -             -
Series-B convertible preferred stock, par value $0.001;
authorized 3,500 shares;
  no shares issued and outstanding, liquidating preference at
par value
Common stock, par value $0.001; authorized 75,000 shares;
  10,000 shares and 13,530  issued and outstanding at December
31, 1998
  and September 30,1999 respectively                                         14            10
Additional paid-in-capital                                               39,971        27,107
Accumulated deficit                                                     (25,606)      (32,201)
Accumulated other comprehensive income (loss)                            (2,114)       (2,025)
                                                                        -------        -------
Total stockholders' equity (deficit)                                     12,265        (7,109)
                                                                         ------        -------

Total liabilities and stockholders' equity (deficit)                    $34,536       $27,952
                                                                        -------       -------
</TABLE>

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



<PAGE>4




<TABLE>
<CAPTION>

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

                                               For three months ended   For nine months ended
                                                   September 30            September 30
<S>                                            <C>          <C>         <C>        <C>
                                               1999         1998        1999       1998

Revenues
Software Licenses                              $11,071      $7,532      $25,321    $18,175
Maintenance and Services                         8,486       5,804       21,350     15,243
Hardware and other                                 721         532        3,461      2,852

Total revenues                                  20,278      13,868       50,132     36,270

Cost of revenues
Software Licenses                                1,373         735        3,150      1,855
Maintenance and Services                         2,732       1,379        6,778      3,776
Hardware and other                                 566         322        2,487      2,023
Amortization of purchased software and
capitalized software development cost               58          17          182         51

Total cost of revenues                           4,729       2,453       12,597      7,705

Gross Profit                                    15,549      11,415       37,535     28,565
Operating Expenses
Sales and marketing                              7,329       5,936       17,968     14,386
Research and development                         1,205       1,518        3,866      4,164
General and administrative                       1,773       1,269        4,457      3,348
Amortization of intangible assets                   88         100          264        241

Total operating expenses                        10,395       8,823       26,555     22,139

Profit from operations                           5,154       2,592       10,980      6,426
Other income (expense) :
Interest expense, net                              290         483        1,138      1,415

Income before income taxes                       4,864       2,109        9,842      5,011
Income tax expense                               1,605         822        3,247      1,953

Net income                                      $3,259      $1,287       $6,595     $3,058
Basic net income per share                        0.24        0.13         0.55       0.31

Diluted net income per share                      0.23        0.13         0.54       0.31

Basic weighted average shares                   13,530      10,000       12,038      9,762
outstanding

Diluted weighted average shares                 14,200      10,015       12,335      9,777
outstanding

</TABLE>

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


<PAGE>5


<TABLE>
<CAPTION>


                              AREMISSOFT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (IN THOUSANDS)
                                                                 For nine months
                                                                ended September 30
<S>                                                            <C>          <C>
                                                               1999         1998

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                     $6,595       $3,058
Adjustments to  reconcile  net income to net cash
  provided (used) in operating activities:
Depreciation                                                      979          432
Amortization and write-off of capitalized software and
Intangible assets                                                 446          292

Changes in assets and liabilities::
Accounts receivable                                           (1,580)      (8,906)
Other receivables                                               (553)      (2,027)
Inventory                                                          76          124
Deposits paid on services and maintenance contracts             2,586            -
Prepaid expenses and other assets                             (1,078)          353
Accounts Payable                                                (807)        4,033
Deferred revenue                                              (1,900)      (1,086)
Accrued taxes payable                                           1,837        (778)
Other accrued expenses                                        (2,491)      (2,127)
                                                              -------      -------

Net cash provided (used) in operating activities                4,110      (6,632)
                                                                -----      -------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                           (1,060)        (585)
Capitalized software development costs                              -         (38)
                                                                    -         ----

Net cash (used in) investing activities                       (1,060)        (623)
                                                              -------        -----

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of stock                            12,868        9,302
Principal repayments of long-term borrowings                  (7,622)      (1,480)
Loan from related party                                       (1,793)            -
Principal payments of capital lease obligations                  (26)         (96)
Short-term demand facility                                          -            8
                                                            ---------    ---------

Net cash provided by financing activities                       3,427        7,734
                                                                -----        -----

Net increase in cash and cash equivalents                       6,477          479
Effect of foreign currency exchange rates on cash and
cash equivalents                                                 (89)        (262)
Cash and cash equivalents, at beginning of period                 149          239
                                                               ------        -----
Cash and cash equivalents, at end of period                    $6,537        $ 456
                                                               -------       -----

Supplemental disclosure:
Interest paid                                                  $1,138      $ 1,415

</TABLE>


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


<PAGE>6


          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 and nine-month  periods ended September 30, 1999 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, 1998 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. For further information,  refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Company's Registration  Statement on Form S-1, SEC File No. 333-58351,  declared
effective on April 22, 1999.

2.  FOREIGN CURRENCY TRANSLATION

The functional  currency of the Company and its United Kingdom  subsidiaries  is
the British pound. The functional currencies of the other subsidiaries are their
local currencies.

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  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>7


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>
<CAPTION>

                                                Three months ended       Nine months ended
                                                  September 30             September 30
<S>                                             <C>         <C>          <C>        <C>
                                                1999        1998         1999       1998
Basic:                                             In Thousands, except per share data

Net income                                      $3,259      $1,287       $6,595     $3,058
Average shares outstanding                      13,530      10,000       12,038      9,762
                                                ------      ------       ------      -----
Basic EPS                                       $ 0.24      $ 0.13       $ 0.55     $ 0.31
                                                ======      ======       ======     ======

Diluted:
Net income                                      $3,259      $1,287       $6,595     $3,058
8% Convertible debt interest                        10           -           30          -
                                                    --           -           --          -

Totals                                          $3,269      $1,287       $6,625     $3,058
                                                ======      ======       ======     ======

Average shares outstanding                      13,530      10,000       12,038      9,762
Net effect of dilutive stock options
and warrants based on the treasury
stock method                                       612          15          239         15
Assumed conversion of 8% convertible debt           58           -           58          -
                                                    --           -           --          -

Totals                                         $14,200     $10,015      $12,335     $9,777
                                               =======     =======      =======     ======
Diluted EPS                                     $ 0.23      $ 0.13       $ 0.54     $ 0.31
                                                ======      ======       ======     ======
</TABLE>

4. COMPREHENSIVE INCOME

During June 1997, the Financial  Accounting Standards Board issued SFAS No. 130,
"Reporting  Comprehensive  Income"  ("SFAS No. 130").  SFAS No. 130  establishes
standards  for  the  reporting  and  display  of  comprehensive  income  and its
components in a full set of general-purpose financial statements.

The Company adopted SFAS No. 130 during 1998.  Included within accumulated other
comprehensive income are the cumulative amounts for foreign currency translation
adjustments  Comprehensive income (loss) for the nine months ended September 30,
1999 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>

                                             Nine Months Ended           Three Months Ended
                                                September 30                September 30
<S>                                         <C>            <C>           <C>            <C>
                                            1999           1998          1999           1998
                                            ----           ----          ----           ----

Net income                                  $ 6,595        $3,058        $ 803          $ 156
Foreign currency translation adjustments        (89)         (202)         (24)           (29)
                                           --------       -------       ------          -----
Comprehensive income                        $ 6,506        $2,856        $779           $127

</TABLE>


5. SEGMENT REPORTING INFORMATION

The Company has adopted SFAS 131 "Disclosure about Segments of an Enterprise and
Related  Information"  during 1998,  which  changes the way the Company  reports
certain information about its operating segments.




<PAGE>8

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.  Within each industry,  the Company
has adopted  tailored  sales and  marketing  strategy.  This  strategy  includes
advertisements in leading trade  publications,  participation in trade shows and
sponsorship  of user groups.  In addition,  the Company has developed  corporate
sales  and  marketing  materials  as well as  general  financial  and  technical
materials  that  are  distributed  to each  of the  Company's  subsidiaries  for
inclusion in their sales materials,  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:

<TABLE>
<CAPTION>

<S>                               <C>            <C>         <C>         <C>           <C>    <C>
                                  MANUFACTURING  HEALTHCARE  HOSPITALITY CONSTRUCTION  OTHER  TOTAL
Segmental analysis for the
nine months ended September
30, 1999

Revenue from external customers   16,461         13,842      13,199      3,715         2,915  50,132
Depreciation and amortization        280            294         284         64           503   1,425
Profit (loss) from operations      5,713          2,042       2,984        552          (311) 10,980
Total segment assets              15,089          8,237       8,381      1,547         1,282  34,536

Segmental analysis for the
nine months ended September
30, 1998

Revenue from external customers   10,717         11,760       9,469      3,028         1,296  36,270
Depreciation and amortization        142            165         135         33           249     724
Profit (loss) from operations      3,418          1,487       1,466        346          (291)  6,426
Total segment assets              13,762          7,281       6,431      1,380           669  29,523

</TABLE>

The following table  represents  revenue by country based on country of customer
domicile and long-lived assets by country on the location of the assets.

                             Revenues                    Long-Lived Assets
                  September 30,  September 30,    September 30,    September 30,
                       1999           1998             1999             1998
                  -----------   -------------     ------------     -------------
United Kingdom        28,581         23,684           1,833            1,937
Rest of Europe        11,646          7,772             605              517
United States          1,972          1,581             117               97
Asia                   1,872          1,238             463              783
Rest of World          6,061          1,995              12                0

                      50,132         36,270           3,030            3,334


<PAGE>9

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  Interim
Consolidated  Financial  Statements  included in Part I, Item 1, of this report.
All  statements,   other  than  historical  facts,  included  in  the  following
discussion  regarding the Company's 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 under "Risk Factors" in the Company's prospectus included in its
registration  statement  on Form S-1, SEC File No.  333-58351,  all of which are
incorporated  herein by reference.  The Company's 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  the  Company's  ability to control or  predict.
Readers of this report are  cautioned  not to put undue  reliance on any forward
looking statement. The Company undertakes no obligation to publicly update these
forward  looking  statements,  whether  as a result of new  information,  future
events or otherwise.

OVERVIEW

AremisSoft   develops,   markets,   implements   and  supports   enterprise-wide
applications software targeted at mid-sized  organizations in the manufacturing,
healthcare,  hospitality and construction  industries (the "Targeted  Markets").
The Company's  software  products help streamline and enhance an  organization's
ability to manage and execute  mission-critical  functions  such as  accounting,
purchasing,  manufacturing,  customer service, and sales and marketing. In 1986,
the Company  established  a software  development  and  support  facility in New
Delhi,  India, which currently has 116 employees.  The Company believes that its
India  facility  provides  significant  organizational   efficiencies  and  cost
advantages in software development and support process.  AremisSoft products are
designed to be the primary business software that  organizations in the Targeted
Markets use to generate and  disseminate  information  across the  enterprise in
order to respond rapidly to changing market environments and customer needs. The
Company has licensed its software products to more than 5,000 customers.

The Company  strategically  focuses on customers  in the  Targeted  Markets with
annual  revenues of less than $200  million.  Through its  concentrated  product
focus,  AremisSoft believes that it has developed substantial industry expertise
in the Targeted Markets. In addition,  the Company has developed a three-tiered,
object-oriented   software  architecture  (the  "Aremis  Architecture"),   which
achieves  economies of scale and cost  reductions  in the  software  development
process by  capitalizing  on the common  functional  requirements  of  customers
across  a  variety  of  industries.   The  Company   believes  that  the  Aremis
Architecture  enables  it  to  produce  high  quality,  scalable  products  with
substantially  reduced  software  development,  implementation  and  maintenance
costs.

In the  past  five  years,  the  Company  has  experienced  rapid  growth,  both
internally and through acquisitions,  with revenues increasing from $6.4 million
in 1994 to $52.6 million in 1998. During this period,  the Company  successfully
acquired  and  integrated  the  operations  of  eleven  businesses,  which  were
principally  operating in the United Kingdom.  In each acquisition,  the Company



<PAGE>10

sought to reduce  expenses,  rejuvenate  the  existing  products of the acquired
business  and  transition  the  customers  to products  that  utilize the Aremis
Architecture.  The Company's software  development and support facility in India
provides the Company  accesses to highly  skilled  technical  personnel  who are
responsible for rejuvenating  the acquired  products and developing new products
in a cost-effective  manner. The Company markets its software products primarily
through its own sales force and provides  product support  worldwide  through 14
offices in seven countries. To date, the majority of the Company's revenues have
been  generated  from customers  located in the United  Kingdom.  Such customers
comprised  approximately  60% of total  revenues for the year ended December 31,
1998 and  approximately  57% for the  nine  months  ended  September  30,  1999.
Customers using the Company's  software products include  Southampton  Multifund
(healthcare),   Birmingham  Multifund  (healthcare),   Telefon  AB  LM  Ericsson
(manufacturing),    Nabisco   Biscuit   Co.   (manufacturing),   Forte   Limited
(hospitality) and London Electricity plc (construction).

The  Company's  objective  is  to  be  a  leading  provider  of  enterprise-wide
applications  software in the  Targeted  Markets.  The  Company's  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  Company's   cost-efficient   India
operations,  (iv)  capitalizing  on  the  Company's  investment  in  the  Aremis
Architecture,  (v) expanding the Company's marketing, sales, support and service
capabilities  and  (vi)  acquiring  related  software  businesses,  products  or
technologies.

RESULTS OF  OPERATIONS

Revenues

Total  revenues  increased  46.22% to $20.28  million for the three months ended
September 30, 1999 from $13.87 million for the three months ended  September 30,
1998. For the nine-months  ended September 30, 1999, the total revenue increased
38.22% to $50.13 million from $ 36.27 million  during the  comparable  period in
1998. This increase was due primarily to higher software  license  revenues as a
result  of an  increase  in the  sale  of  higher  margin  licenses,  associated
maintenance   and   service   contract   revenues   and   hardware   and   other
revenue.

Software  license  revenues  increased  46.99% to $11.07  million  for the three
months ended  September  30, 1999 from $7.53  million for the three months ended
September 30, 1998. For the  nine-months  ended September 30, 1999, the software
license  revenue  increased  39.32% to $25.32 million from $18.18 million during
the comparable  period in 1998.  This increase is primarily due to the growth in
the number of installed customers, increased sales of licenses for the Company's
Aremis 4.0 products,  and price  increases.  As a percentage of total  revenues,
license  revenues  increased  to 54.60% from 54.31% for the three  months  ended
September 30, 1999 and September 30, 1998. For the  nine-months  ended September
30, 1999, as a percentage of total revenue,  license revenue increased to 50.51%
from 50.11% during the comparable period in 1998.

Maintenance and service contract revenues  increased 46.21% to $8.49 million for
the three  months  ended  September  30,  1999 from $5.80  million for the three
months ended September 30, 1998. For the  nine-months  ended September 30, 1999,
the  maintenance  and service  revenue  increased  40.06% to $21.35 million from
$15.24  million  during  the  comparable  period in 1998.  This is 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  remained the same at 41.85% for three months ended  September 30, 1999
and 1998. For the nine-months ended September 30, 1999, as a percentage of total
revenue,  maintenance  and service  contract  revenue  increased  to 42.59% from
42.03% during the comparable period in 1998.

Hardware  and other  revenues  increased  35.53% to $0.72  million for the three
months ended  September  30, 1999 from $0.53  million for the three months ended
September 30, 1998. For the  nine-months  ended September 30, 1999, the hardware
and other revenue  increased  21.35% to $3.46 million from $2.85 million  during
the comparable  period in 1998. As a percentage of total revenues,  hardware and
other revenues  decreased to 3.56% for the three months ended September 30, 1999
from 3.84% for the three months ended  September 30, 1998.  For the  nine-months
ended  September 30, 1999, as a percentage of total revenue,  hardware and other
revenues  decreased  to 6.90% from 7.86%  during the  comparable  period in 1998
reflecting the Company's  strategy to reduce the sale and  installation of lower
margin third-party hardware.

Cost of Revenues

Cost of revenues  increased  92.78% to $4.73  million for the three months ended
September 30, 1999 from $2.45  million for the three months ended  September 30,
1998. For the  nine-months  ended  September 30, 1999, the total cost of revenue
increased  63.49% to $12.60  million from $ 7.71 million  during the  comparable
period in 1998. As a percentage of total revenues, cost of revenues increased to
23.32% for the three months ended  September  30, 1999 from 17.69% for the three
months ended September 30, 1998. For the  nine-months  ended September 30, 1999,
as a  percentage  of total  revenue,  cost of revenue  increased  to 25.13% from
21.24% during the comparable period in 1998.

Software  license cost  increased  86.80% to $1.37  million for the three months
ended September 30, 1999 from $0.74 million for the three months ended September
30, 1999. For the  nine-months  ended  September 30, 1999, the software  license
cost increased  69.81% to $3.15 million from $1.86 million during the comparable
period in 1998.  This  increase is primarily  due to the growth in the number of
installed  customers,  increased sales of licenses for the Company's  Aremis 4.0
products. As a percentage of total revenues, license cost increased to 6.77% for
the three  months  ended  September  30,  1999 from 5.30% for the  period  ended
September  30,  1998.  For  the  nine-months  ended  September  30,  1999,  as a
percentage of total  revenue,  license cost increased to 6.28% from 5.11% during
the comparable period in 1998.

Maintenance and service  contract cost increased 98.11% to $2.73 million for the
three months ended  September  30, 1999 from $1.38  million for the three months
ended  September 30, 1998.  For the nine months ended  September  30, 1999,  the
maintenance  and service  contract cost  increased  79.50% to $6.78 million from
$3.78 million during the comparable  period in 1998, 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
cost  increased  to 13.47% for the three months  ended  September  30, 1999 from
9.94% for 1998. For the nine months ended September 30, 1999, as a percentage of
total revenue,  maintenance  and service  contract cost increased to 13.52% from
10.41% during the comparable period in 1998.

Hardware and other cost  increased  75.78% to $0.57 million for the three months
ended September 30, 1999 from $0.32 million for the three months ended September
30, 1998.  For the nine months ended  September 30, 1999, the hardware and other
cost increased  22.94% to $2.49 million from $2.02 million during the comparable
period in 1998.  As a  percentage  of total  revenues,  hardware  and other cost
increased to 2.79% for the three months ended  September 30, 1999 from 2.32% for
the three months ended  September 30, 1998. For the nine months ended  September
30, 1999, as a percentage of total revenue, hardware and other cost decreased to



<PAGE>12

4.96% from 5.58% during the comparable period in 1998,  reflecting the Company's
strategy  to  reduce  the sale and  installation  of  lower  margin  third-party
hardware.

Sales and Marketing

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

The Company's sales and marketing expenses increased 23.47% to $7.33 million for
the three  months  ended  September  30,  1999 from $5.94  million for the three
months ended September 30, 1998. For the  nine-months  ended September 30, 1999,
the sales and  marketing  cost  increased  24.90% to $17.97  million from $14.39
million  during the  comparable  period in 1998.  This is  primarily  due to the
expansion of sales and marketing activities principally in the United States and
Europe.  As a  percentage  of  total  revenues,  sales  and  marketing  expenses
decreased to 36.14% for three months ended  September 30, 1999,  from 42.80% for
the three months ended  September 30, 1998. For the nine months ended  September
30, 1999, as a percentage of total  revenue,  sales and marketing cost decreased
to 35.84% from 39.66%  during the  comparable  period in 1998,  primarily due to
increased efficiencies in the Company's sales and marketing operations.

Research and Development

Research and development  expenses  decreased to 20.62% to $1.21 million for the
three months ended  September  30, 1999 from $1.52  million for the three months
ended  September 30, 1998.  For the nine months ended  September  30, 1999,  the
research and development  expense decreased to 7.16% to $3.87 million from $4.17
million during the comparable period in 1998. As a percentage of total revenues,
research and development  expenses decreased to 5.94% for the three months ended
September  30, 1999 from 10.95% for the three months ended  September  30, 1998.
For the nine months ended  September 30, 1999, as a percentage of total revenue,
research and  development  expenses  decreased  to 7.71% from 11.48%  during the
comparable period in 1998.

General and Administrative

General and  administrative  expenses  increased 39.72% to $1.78 million for the
three months ended  September  30, 1999 from $1.27  million for the three months
ended  September 30, 1998.  For the nine months ended  September  30, 1999,  the
general and  administrative  cost  increased  33.12% to $4.46 million from $3.35
million during the comparable period in 1998. As a percentage of total revenues,
general and  administrative  expenses  decreased  to 8.74% for the three  months
ended  September  30, 1999 from 9.15% for the three months ended  September  30,
1998.  For the nine months ended  September  30, 1999,  as a percentage of total
revenue,  general  and  administrative  expenses  decreased  to 8.89% from 9.23%
during the comparable  period in 1998. This decrease  reflects the effect of the
Company's cost-cutting and cost control measures.

Net Interest Expense

Net interest expense reflects  interest on the Company's credit  facilities,  as
reduced by interest  income on cash  balances.  Net interest  expense  decreased
39.96% to $0.29 million for the three months ended September 30, 1999 from $0.48
million  for the three  months  ended  September  30, 1998 . For the nine months
ended  September 30, 1999, the net interest  expense  decreased  19.58% to $1.14
million from $1.42 million during the comparable  period in 1998.  This decrease
was due to the repayment of part of the company's debt facility.


<PAGE>13


Income Tax Provision

There is a provision  for income taxes for the nine months ended  September  30,
1999 of $3.25 million.  There was a provision for income taxes for $1.95 million
for the nine months  ended  September  30,  1998.  The  increase in income taxes
resulted from the increase in the Company's profitability in 1999. The company's
effective tax rate was assumed at 33%.

Recoverability  of the  deferred tax asset has been  reviewed at  September  30,
1999, and although certain  subsidiaries  generated taxable income in the period
ending  September 30, 1999, 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

The  Company  has  funded  its  operations  since  inception  primarily  through
borrowings under bank credit facilities, private placements of equity securities
and equity  contributions  by its  principal  stockholder.  In April  1999,  the
company offered 3.30 million shares of its common stock for public  subscription
and in June  1999  another  0.23  million  shares  were  offered  from  the over
allotment  option.  The net  proceeds  received by the company  from the sale of
shares of common stock were approximately $12.87 million, net of expenses. As of
September 30, 1999, the Company had $ 6.54 million of cash and cash  equivalents
and $7.91 million in long-term borrowings.

The  Company  believes  that the  existing  cash and cash  equivalents,  will be
sufficient  to  meet  the  Company's   working  capital  and  currently  planned
expenditure  requirements  for the next 3 months.  The Company may, from time to
time,   consider   acquisitions  of   complementary   businesses,   products  or
technologies,  which may require additional  financing.  In addition,  continued
growth in the  Company's  business may,  from time to time,  require  additional
capital. No assurances can be given that additional capital will be available to
the  Company  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 the Company's stockholders.

The Company had an  operating  cash flow  surplus of $4.11  million for the nine
months ended  September 30, 1999.  This surplus was primarily due to decrease in
deposits and increased  sales.  The Company had operating  cash flow deficits of
$6.63 million for the nine months ended September 30, 1998.  Operating cash flow
is affected by seasonality, among other factors.

Accounts  receivable  decreased  to $17.75  million at  September  30, 1999 from
$18.89 million at September 30, 1998.  Accounts  receivable at December 31, 1998
was $ 16.17 million.  The average days sales outstanding was 97 days compared to
142 days for the period  September  30, 1998 and 112 for December 31, 1998.  The
reduction  in the  collection  days  is  the  result  of  higher  collection  of
receivables during the year.

Accrued   taxes   increased   from  $4.11  million  at  September  30,  1998  to
approximately $5.31 million at September 30, 1999. The Company utilized cash for
investing  activities  of $1.10  million and $0.62  million for the  nine-months
ended September 30, 1999 and September 30, 1998 respectively.

Cash provided by financing  activities was approximately $3.43 million and $7.73
million for the nine months ended  September  30, 1999 and  September  30, 1998,
respectively.  Financing  activities  for the  nine  months  of  1998  primarily
consisted of a private  placement in February  1998 of  approximately  1,294,500



<PAGE>14


shares of Common Stock,  the net proceeds of which were $9.3 million.  Financing
activities for the nine months ended  September 30, 1999 primarily  consisted of
proceeds  from public issue of $12.87  million,  net of  expenses,  repayment of
short-term  borrowing of $7.62  million and  repayment of $1.79  million loan to
related party.

IMPACT OF THE YEAR 2000

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four to define the  applicable  year. Any of the Company's or
its  suppliers'  and  customers'  computer  programs  that  have  date-sensitive
software  may  recognize a date using "00" as the year 1900 rather than the year
2000.  The issue has grown in importance as the use of computers and  microchips
has become more  pervasive  and  interdependence  between  computer  systems has
increased.  The  Company  could be  materially  and  adversely  affected  either
directly or  indirectly  by the Year 2000 issue.  This could occur if any of its
critical computer systems or equipment  containing  embedded logic fails, if the
local infrastructure  (electric power, phone systems, or water system) fails, or
if its  significant  suppliers or customers are adversely  impacted.  This could
result in system failures or miscalculations  causing  disruptions of operations
including,  among other things, a temporary  inability to process  transactions,
send invoices or engage in similar normal business activities.

Failure of the  Company to  complete  testing  and  renovation  of its  critical
systems on a timely basis could have a material  adverse effect on the Company's
financial  condition  and  operating  results,  as could  Year  2000  compliance
problems  experienced by others with whom the Company does business.  Because of
the range of possible issues and the large number of variables  involved,  it is
impossible  to quantify  the  potential  cost of problems  should the  Company's
remediation  efforts or the efforts of those with whom it does  business  not be
successful.

The Company's internal information system is a client/server environment and the
Company  believes its internal  information  system is Year 2000 compliant.  The
Company  initiated a program and  established  a committee  comprised  of senior
executive  representatives from its subsidiaries in each of the Targeted Markets
to assess the Year 2000 readiness of its products and  operations  including its
non-information technology systems. All of the products currently being marketed
by the Company  have been  assessed and the Company  believes  they are all Year
2000 compliant.  The Company has also developed  upgrades for its  non-compliant
rejuvenated  and legacy  products,  which are no longer marketed by the Company.
The upgrades  developed for such  products are being sold to existing  customers
that use those  products.  The Company's IGS Hotel  (Version 2) and Hotel Master
products  are not,  and  will not be Year  2000  compliant.  The  users of these
products have been  informed  that the products will not be Year 2000  compliant
and the  Company  does not expect that such  noncompliance  will have a material
adverse effect on its business or results of operations.

The  Company  has  assessed  all of its  internal  systems  including  hardware,
software,  operating  systems,  development  tools and  languages as well as its
facilities and equipment including, among other things, its security devices and
telephone switchboards for Year 2000 compliance.  The Company has not identified
any material  Year 2000  compliance  problems,  but will continue to monitor its
information  systems.  However,  no  assurances  can be  given  that  Year  2000
compliance  problems  will not  eventually  occur with respect to the  Company's
information  systems  which,  depending  on the nature and scope of the problem,
could have a material  adverse  effect on its  business,  operating  results and
financial condition.



<PAGE>15


The Company had formal  communications  with critical suppliers to determine the
extent to which their failure to remedy their own Year 2000 compliance  problems
would materially affect the Company. Based on representations  received from the
Company's  critical  suppliers and testing results as of September 30, 1999, the
Company believes that its business will not be materially  adversely affected by
any Year 2000  noncompliance  of its  critical  suppliers.  The Company has also
developed  contingency  arrangements,  which include identifying  possible third
party suppliers in the event any of its suppliers, including critical suppliers,
are unable to provide  the  necessary  products  or services to the Company as a
result of Year 2000 compliance problems not detected or corrected prior to their
occurrence.  No assurances can be given that alternative  third-party  suppliers
will be successful in meeting the  Company's  requirements  or, if met, that the
terms of the arrangement will be as favorable as those of the Company's  current
suppliers,  which could  increase  the  Company's  expenses  and have a material
adverse  effect  on the  Company's  business,  operating  results  or  financial
condition.

The  aggregate  costs  incurred  by the  Company  as of  September  30,  1999 in
connection  with Year 2000  compliance  were  approximately  $772,000,  of which
approximately  $123,000,  $186,000,  $126,000 and $60,000 were incurred in 1996,
1997, 1998 and for the nine months ended September 30, 1999, respectively.  Year
2000  related  costs have been  funded  from the  continuing  operations  of the
Company. The Company estimates that it will incur an additional $20,000 in costs
to complete its Year 2000 compliance efforts.

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.  The
Company's  products either include or have been upgraded to include the Euro and
the Company  does not believe  that the Euro  conversion  has had or will have a
material adverse effect on its business. Because the Company's critical internal
systems have been modified to  accommodate a conversion to the Euro, the Company
believes it is adequately  prepared in the event the United Kingdom  converts to
the Euro in the future.




<PAGE>16


Item 3: QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET  RISK

Foreign Currency Exchange Rates

A significant portion of the Company's business is conducted in currencies other
than the United States dollar.  As a result,  the Company is subject to exposure
from  movements  in  foreign  currency  exchange  rates.  The  Company  does not
currently engage in hedging transactions designed to manage currency fluctuation
risks.

Interest Rate Sensitivity

The  Company's  exposure  related  to adverse  movements  in  interest  rates is
primarily  derived from the variable  rate on the Company's  credit  facilities.
Interest rates on the Company's  credit  facilities  range from either  Sterling
LIBOR plus 3% to Sterling LIBOR plus 4% or the lending bank's base rate plus the
applicable  margin.  Increases  in Sterling  LIBOR  result in  increases  in the
Company's interest expense.  However,  at September 30, 1999, an increase of 10%
in Sterling LIBOR would not have a material  adverse effect on the Company.  The
Company does not  currently  engage in hedging  transactions  designed to manage
interest rate fluctuation risks.


                          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

Item 6: EXHIBITS AND REPORTS ON FORM 8-K

None


<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.



                                            AREMISSOFT CORPORATION,
                                            a Delaware Corporation


Date: October 20, 1999                      /S/ DR. LYCOURGOS KYPRIANOU
                                            Dr. Lycourgos Kyprianou
                                            Chairman & Chief Executive Officer



Date: October 20, 1999                      /S/ MICHAEL TYMVIOS
                                            Michael Tymvios
                                            Senior Vice President - Finance
                                            Chief Financial Officer