TECHNOLOGY : Cash-Strapped MAI May Fall Short on $10-Million Payment

MAI Systems Corp., a struggling Tustin computer software company, may be unable to make a $10-million payment because of its deteriorating financial condition, according to a company filing with the Securities and Exchange Commission.

Financial agreements governing MAI’s senior subordinated debt require the company to make a $10-million repurchase of principal from the bondholders if MAI’s net worth falls below $25 million, the SEC filing said.

For the quarter ended Dec. 31, the company’s net worth was a negative $20.6 million. MAI said in its April 14 filing that it expects its net worth to remain below $25 million for the quarter ended March 31. As a result, MAI will likely have to pay the $10 million by June 28.

Bert Weidberg, MAI’s general counsel, said the filing was a routine update of a notice the company first issued in January.

Company officials have said that they are trying to sell assets to raise money.

In March, MAI got a reprieve from its lenders on an overdue $77-million payment. The company received an extension from its U.S. and Canadian bankers until May 26.

For the quarter ended Dec. 31, MAI lost $2 million, compared to a loss of $17.9 million a year earlier. Revenue dropped 9.5% to $44.5 million from $49.2 million a year earlier.