<PAGE>   1

                       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 JUNE 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 0-5260

                            GENERAL AUTOMATION, INC.
             -------------------------------------------------------
             (Exact name of registrant as specified in its charter).

           DELAWARE                                            95-2488811
-------------------------------                       --------------------------
(State or other jurisdiction of                       (I.R.S. employer I.D. No.)
 incorporation or organization)

17731 MITCHELL NORTH, IRVINE, CALIFORNIA                        92614
----------------------------------------                      ----------
(Address of principal executive offices)                      (Zip code)

Registrant's telephone number including area code:  (949) 250-4800

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 registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days:

                        No [ ]      Yes [X]

As of August 13, 1999 there were 9,332,641 shares of common stock of the
Registrant outstanding.

<PAGE>   2

ITEM 1.   FINANCIAL STATEMENTS

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                  JUNE 30,        SEPTEMBER 30,
                                                    1999              1998
                                                ------------      ------------
<S>                                             <C>               <C>
ASSETS

Current Assets:
     Cash                                       $  1,210,000      $    856,000
     Accounts receivable                           5,029,000         4,165,000
     Inventories - Note 1                          1,571,000         1,986,000
     Prepaid expenses and other                      649,000         1,073,000
                                                ------------      ------------
          Total current assets                     8,459,000         8,080,000

Capitalized software - Note 3                      1,754,000         1,639,000
Property and equipment                             1,822,000         2,073,000
Goodwill, net of amortization                      1,613,000         2,043,000
Other assets                                         205,000           279,000
                                                ------------      ------------
TOTAL ASSETS                                    $ 13,853,000      $ 14,114,000
                                                ============      ============
LIABILITIES

Current liabilities:
     Bank line of credit                        $  2,050,000      $  2,200,000
     Current portion of long-term debt               727,000           811,000
     Note payable and due to TMI                   6,401,000         6,401,000
     Due to Boundless                              3,059,000         2,043,000
     Accounts payable                              2,390,000         1,805,000
     Accrued expenses                              2,519,000         3,860,000
     Deferred revenue - Note 2                     3,968,000         4,711,000
                                                ------------      ------------
          Total current liabilities               21,114,000        21,831,000
                                                ------------      ------------

Long-term debt, excluding current portion          1,925,000         2,210,000

Total Liabilities                                 23,039,000        24,041,000
                                                ------------      ------------
SHAREHOLDERS' EQUITY (DEFICIT)
     Common stock                                    933,000           933,000
     Additional paid-in capital                   45,658,000        45,442,000
     Accumulated deficit                         (55,655,000)      (56,071,000)
     Cumulative translation adjustment              (122,000)         (231,000)
                                                ------------      ------------
TOTAL SHAREHOLDERS' DEFICIT                       (9,186,000)       (9,927,000)
                                                ------------      ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT     $ 13,853,000      $ 14,114,000
                                                ============      ============
</TABLE>


The Accompanying Notes are a Integral Part of the Financial Statements


                                      F-1
<PAGE>   3

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                            Three Months Ended               Nine Months Ended
                                                 June 30,                         June 30,
                                        ---------------------------     -----------------------------
                                            1999            1998             1999             1998
                                        -----------     -----------     ------------     ------------
<S>                                     <C>             <C>             <C>              <C>
Sales - Product                         $ 4,120,000     $ 2,628,000     $ 11,128,000     $  8,029,000
Sales - Service revenue                   3,204,000       4,858,000       11,530,000       15,517,000
                                        -----------     -----------     ------------     ------------
Total sales                               7,324,000       7,486,000       22,658,000       23,546,000

Cost of sales - Product                   2,017,000       2,522,000        6,063,000        6,791,000
Cost of sales - Service                   2,222,000       2,641,000        6,616,000        9,505,000
                                        -----------     -----------     ------------     ------------
Total cost of sales                       4,239,000       5,163,000       12,679,000       16,296,000
                                        -----------     -----------     ------------     ------------
Gross profit                              3,085,000       2,323,000        9,979,000        7,250,000

Costs and expenses:
 Selling and administrative               2,562,000       2,788,000        7,640,000        7,838,000
 Research and development - Note 3          (70,000)        335,000          534,000        1,209,000
 Depreciation                               131,000         164,000          420,000          522,000
 Amortization of goodwill                   162,000         538,000          455,000        1,613,000
 Other, net                                 (26,000)         (5,000)        (156,000)          66,000
                                        -----------     -----------     ------------     ------------
                                          2,759,000       3,820,000        8,893,000       11,248,000
                                        -----------     -----------     ------------     ------------
Operating income/(loss)                     326,000      (1,497,000)       1,086,000       (3,998,000)

Interest income                                               1,000                             7,000
Interest expense                           (238,000)       (129,000)        (578,000)        (383,000)
                                        -----------     -----------     ------------     ------------

Income/(loss) before income taxes            88,000      (1,625,000)         508,000       (4,374,000)

Provision for income taxes                                   11,000           91,000           61,000
                                        -----------     -----------     ------------     ------------
Net income/(loss)                       $    88,000     $(1,636,000)    $    417,000     $ (4,435,000)
                                        ===========     ===========     ============     ============

Net income (loss) per share:
             Basic                      $      0.01     $     (0.18)    $       0.04     $      (0.48)
             Fully Diluted              $      0.01     $     (0.18)    $       0.04     $      (0.48)
                                        ===========     ===========     ============     ============
Weighted average shares outstanding:
             Basic                        9,332,641       9,295,924        9,332,641        9,284,528
             Fully Diluted                9,332,641       9,295,924        9,332,641        9,284,528
</TABLE>


The Accompanying Notes are a Integral Part of the Financial Statements


                                      F-2

<PAGE>   4

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED           NINE MONTHS ENDED
                                           JUNE 30,                     JUNE 30,
                                    ------------------------     -----------------------
                                      1999           1998          1999         1998
                                    --------     -----------     --------    -----------
<S>                                 <C>          <C>             <C>         <C>
NET INCOME/(LOSS)                   $ 88,000     $(1,636,000)    $417,000    $(4,435,000)
     Translation Adjustment          (20,000)         (1,000)     109,000         21,000
                                    --------     -----------     --------    -----------
TOTAL COMPREHENSIVE INCOME(LOSS)    $ 68,000     $(1,637,000)    $526,000    $(4,414,000)
                                    ========     ===========     ========    ===========
</TABLE>


The Accompanying Notes are a Integral Part of the Financial Statements

                                      F-3

<PAGE>   5

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (UNAUDITED)
                       FOR THE NINE MONTHS ENDED JUNE 30,

<TABLE>
<CAPTION>
                                                          1999            1998
                                                       -----------     -----------
<S>                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                      $   417,000     $(4,435,000)

Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                          875,000       2,135,000
    Gain from disposal of assets                           (56,000)
  Changes in assets and liabilities:
       (Increase)decrease in:
           Accounts receivable                            (864,000)        519,000
           Inventories                                     415,000       1,448,000
           Prepaid expenses                                424,000         205,000
           Other assets                                    455,000        (698,000)
       Increase (decrease) in:
          Accounts payable                               1,601,000         732,000
          Deferred revenue                                (743,000)       (322,000)
          Accrued expenses                              (1,341,000)        977,000
                                                       -----------     -----------
              NET CASH PROVIDED BY
               OPERATING ACTIVITIES                      1,183,000         561,000

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions                                                            (282,000)
  Purchase of property, plant and equipment               (195,000)        (49,000)
  Proceeds from disposal of assets                                          56,000
  Capitalized software costs                              (496,000)       (496,000)
                                                       -----------     -----------
              NET CASH USED BY INVESTING ACTIVITIES       (635,000)       (827,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                                   120,000
  Proceeds from extinguishment of debt                     216,000       2,359,000
  Principal payments on notes debt                        (519,000)     (1,978,000)
                                                       -----------     -----------

              NET CASH USED BY FINANCING ACTIVITIES       (303,000)        501,000
                                                       -----------     -----------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH                   109,000          58,000

Net increase/(decrease) in cash and equivalents            354,000         293,000
Cash and equivalents, beginning of period                  856,000         797,000
                                                       -----------     -----------
Cash and equivalents, end of period                      1,210,000       1,090,000
                                                       ===========     ===========
      Cash paid during the period for:
          Interest                                     $   464,000     $   383,000
                                                       ===========     ===========
          Income taxes                                 $     6,000     $    61,000
                                                       ===========     ===========
</TABLE>


The Accompanying Notes are a Integral Part of the Financial Statements


                                      F-4

<PAGE>   6

                   GENERAL AUTOMATION, INC., AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - INVENTORY

Inventories at June 30, 1999 consisted of the following:

<TABLE>
<S>                                                                <C>
        Material and purchased sub-assemblies                      $  711,889
        Support systems, spare parts and sub-assemblies, net          803,122
        Work in process                                               305,499
        Finished goods                                                  9,723
                           Less: Allowance for obsolescence         (259,411)
                                                                   ---------
             Total Inventory                                       $1,570,822
                                                                   ==========
</TABLE>

NOTE 2 - DEFERRED REVENUE

Revenues for sales and the associated cost of goods sold are recognized when
product is shipped and no significant obligation remains. Revenues for
maintenance service contracts are recognized on a monthly basis ratable over the
period of the contracts. Cash payments received and billings in advance of
revenue recognition are recorded as a liability and recognized as revenue is
earned over the life of the contracts.

NOTE 3 - RESEARCH AND DEVELOPMENT EXPENSE

During the quarter ended June 30, 1999 the Company capitalized costs associated
with the development of software in accordance with FAS 86. Software development
costs are charged to research and development costs until technical feasibility
is reached. Cost to develop the software after that period is capitalized until
the product is released for general distribution in sales. FAS 86 requires the
Company to support capitalized costs through the production of extemporaneous
record-keeping which the Company was able to complete during the current
quarter. Because the record-keeping requirement was completed during the quarter
June 30, 1999, some of the costs capitalized during this period were originally
expensed during the second quarter of 1999 resulting in a credit balance of
approximately $70,000 for the quarter ended June 30, 1999.

NOTE 4 - USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with general
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent 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.

NOTE 5 - INTERIM FINANCIAL INFORMATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10Q. Accordingly, they
do not include all of the information and footnotes


                                       5
<PAGE>   7

required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring items) considered necessary for a fair presentation have been
included. Operating results for the interim period are not necessarily
indicative of the results that may be expected for the fiscal year. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K.

NOTE 6 - EARNINGS PER SHARE

The Financial Accounting Standard Board has issued Statement No. 128, "Earnings
per Share" which supersedes APB Opinion No. 15. Statement No. 128 requires the
presentation of basic and diluted earnings per share amounts. Diluted per share
amounts assume the conversion, exercise or issuance of all potential common
stock instruments unless the effect is to reduce a loss or increase the income
per common share from continuing operations. The Company has adopted Statement
No. 128 for the periods ended June 30, 1999. All prior earnings per share
amounts have been restated to conform to the new Statement.

The weighted average number of common shares and common share equivalents
outstanding during the three-month period used to compute basic and diluted
earnings per share is as follows:

<TABLE>
<CAPTION>
                                                                June 30, 1998    June 30, 1999
                                                                -------------    -------------
<S>                                                             <C>              <C>
Weighted average common shares used in computation of
 basic earnings per share                                          9,295,924        9,332,641

Effect of dilutive securities:  Common stock options                       *                *

Weighted average common and common-share equivalents
 used in computation of diluted earnings per share                 9,295,924        9,332,641
</TABLE>

-------------
* Excluded since the effect is anti-dilutive


                                       6
<PAGE>   8

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

The discussion in this document contains trend analysis and other forward
looking statements within the meaning of Section 27A of the Securities Act of
1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Actual results could differ materially from those projected in the
forward-looking statements throughout this document.

(1) MATERIAL CHANGES IN FINANCIAL CONDITION:

At the quarter ended June 30, 1999, the Company reports some improvement in its
financial condition, primarily due to reported profits. The $741,000 increase in
shareholder's deficit, from a negative $9.9 million at September 30, 1998 to a
negative $9.2 million is reflective of a combination of reported profits for
fiscal 1999 and the $109,000 change in cumulative translation adjustment. Also,
in the quarter ended June 30, 1999 fees and expenses due to directors of the
Company totaling $207,000 were extinguished and treated as a contribution to
capital in accordance with accounting standards.

Performance from the Company's wholly owned subsidiary, Liberty Integration
Software in Canada, is predominantly responsible for the 41% increase in the
Company's cash position from the year ended September 30, 1999. The high
profit-margin software sales from the Canadian subsidiary also contribute
significantly to the improved profit margins discussed below. Management of the
Company intends to focus on the Liberty product line in the future and
anticipates an increase in its reliance on the performance of software sales
from that group. The 8% net increase in capitalized software development costs,
in accordance with FAS 86, reflects the efforts expended in the focus of
software development and future product releases, and more fully discussed in
Item 2 (2) below.

The Company has been negotiating for the past year with Boundless Corp. and
Texas Micro, Inc.(TMI) to compromise the outstanding debt to these companies, as
well as eliminate the on-going royalty expense associated with acquisitions of
business from these entities which took place in 1995 and 1996. At June 30, 1999
the outstanding amount owed to both of these companies totaled approximately
$9.5 million, with over $1.6 million per year in royalty expense being accrued.
Both Boundless and TMI have entered into non-binding letters of intent to settle
these amounts under final terms and conditions to be agreed upon. Management
continues to work towards finalizing this transaction and considers it an
integral part of the Company's need to improve its financial condition and
on-going results of operations.

Management is also pursuing a new credit line with outside sources that will
replace its current credit facility with Comerica Bank. Early in fiscal 1998,
Comerica demanded payment in full of the then existing credit line and has since
been working with the Company to assist in moving that loan to an asset-based
lender. Management continues to work closely with Comerica to maintain an
on-going working relationship and will continue to seek alternative lenders to
replace the bank. If an alternative lending source cannot be found and the bank
ceases working with the Company, the daily operations of the Company could be
adversely affected. At June 30, 1999 Management is confident its relationship
with Comerica remains good.

(2) MATERIAL CHANGES IN RESULTS OF OPERATIONS:

For the three and nine months period ended June 30, 1999, the Company is
reporting operating income of $326,000 and $1,086,000 respectively, and net
income of $88,000 and $417,000,


                                       7
<PAGE>   9

respectively for the same periods. This is in contrast to the three and nine
months periods ended June 30, 1998 in which the Company reported net losses of
($1,636,000) and ($4,435,000) respectively. Management attributes the
improvement in operations and reported earnings to an improved gross profit
margin of 43.54% vs. 30.79% for the periods ended June 30, 1999 vs June 30,
1998. The improved gross profit margin is due to a more efficient manufacturing
operation benefiting fiscal 1999, as well as higher margin product/software
sales.

Management is mindful of the clear decrease in service revenue along with an
increase in product/software sales. The revenue mix of the Company is
approaching a 50-50 split between service and product sales for the nine months
ended June 30, 1999, vs 66% service and 34% product for the same period ended
June 30, 1998. For the three months period ended June 30, 1999, that change is
more evident with 55% of revenues resting with product sales and 45% in service
business. Management expects this trend of declining service revenue to continue
as the Company focuses its efforts on increased product/software sales aimed at
data access and web-integration.

During the quarter ended June 30, 1999 and in accordance with FAS 86, software
development costs totaling approximately $450,000 were capitalized, resulting in
a credit balance to the research and development expense account of $70,000.
Substantiation of capitalized costs as required by FAS 86 was completed during
the quarter ended June 30, 1999 and the total amount capitalized includes some
amounts previously expensed in the prior two quarters of fiscal 1999. Management
estimates the effects of the capitalized costs on prior quarters would be
positive, though negligible and would have no effect on expenses or net income
for the nine months ended June 30, 1999. At June 30, 1999 capitalized software
reflects an increase of $141,000, net of amortization costs, from the year ended
September 30, 1998. See also Note 3 to the financial statements.

(3) YEAR 2000 ISSUES AND CONSEQUENCES

Over-view. The Y2K issue exists because many computer systems and applications,
including those embedded in equipment and facilities, use two-digit rather than
four-digit date fields to designate an applicable year. As a result, the systems
and applications utilized by certain companies may not properly recognize the
Year 2000, or certain dates prior or subsequent thereto, or process data which
includes a reference to the Year 2000, potentially causing data miscalculations
or inaccuracies, or operation malfunctions or failures.

Since 1998, General Automation (GA) has devoted significant efforts to address
Y2K issues. GA has developed a comprehensive, company-wide plan to identify,
evaluate and remediate Y2K issues and has established a Y2K Project Committee to
coordinate the implementation of GA's Y2K plan. The committee is comprised of
management personnel from all departments in the Company. The committee reports
to the Company's Vice President of Finance.

GA's Y2K plan is focused on those areas that are critical to maintaining
uninterrupted service to its customers and includes network systems,
applications and infrastructure for the provision of business information
products, applications and services. In addition, the plan includes a review of
the Y2K readiness of GA's vendors, resellers, suppliers and other third parties
who have material relationships with GA and its subsidiaries. The major phases
of the plan with respect to each of these categories, includes an inventory of
all hardware and software components with possible date implications, an
assessment of the Y2K readiness of all inventory items, the remediation of all
Y2K issues which have been identified in the assessment phase, and validation
testing and certification as to Y2K compliance.


                                       8
<PAGE>   10

Company's State of Readiness

GA's plan with respect to its business systems products includes computers,
operating system software and application/database software. GA has completed
the inventory and assessment phases and is working towards the remediation and
validation testing of these products. GA intends to continue periodic Y2K
testing of these products during the remainder of 1999.

GA's Y2K plan for its business information systems and applications involves all
hardware and software components which relate to major internal business and
administrative functions, such as customer service, billing, inventory, and
credit and collections. The remediation effort relating to certain of GA's
business systems involves the decommissioning of certain hardware and software
and the installation of new hardware and software which has been certified as
Y2K compliant. A significant portion of the remaining remediation and validation
testing phases of the Y2K plan related to GA's business information systems and
applications will be completed when such hardware and software is installed.

Costs Associated with Year 2000 Issues

GA's estimate of the total cost of its Y2K compliance efforts, based on amounts
expended to date, plus estimated amounts of additional remediation costs, is
immaterial to the operations of the Company. The estimated Y2K costs have not
been independently verified and may vary in the event of unforeseen Y2K
remediation costs or costs related to the implementation of GA's contingency
plan which has not yet been completed. Certain costs budgeted for the
procurement of upgrades or replacements of GA's network and business information
systems have not been included in this amount since these upgrades or
replacements were being made by GA independent of Y2K readiness. The estimated
Y2K costs do not include GA's internal costs, such as compensation and benefits
of employees delegated Y2K responsibilities, related to its Y2K plan since such
costs are not internally allocated by GA. GA expects to fund its Y2K compliance
efforts with cash flows from operations.

Risks Associated with Year 2000 Issues

GA is working directly with various mission-critical external parties such as
its major equipment vendors, telecommunications and data service providers and
utilities. GA has conducted or intends to conduct testing procedures with
certain of these external parties in order to confirm Y2K readiness. In
addition, GA has identified and prioritized other external parties that provide
equipment and services for purposes of assessing their Y2K readiness and has
forwarded those results to other external parties in order to obtain reasonable
assurance of their Y2K readiness. GA intends to assess all the responses it
receives from external parties to evaluate Y2K readiness and to forward
follow-up communications when appropriate. GA is also using the Internet as a
resource for determining the Y2K readiness of external parties. GA is scheduled
to complete its evaluation of the Y2K readiness of external parties by mid-year
1999, although this will be dependent on the efforts of the external parties. GA
also plans to further communicate with certain external parties during the
second half of 1999 for purposes of additional follow-up reviews, as
appropriate.

The failure by GA or certain external parties to achieve Y2K readiness with
respect to any mission-critical aspect of GA's business could result in an
interruption in, or failure of, certain normal operations or business activities
of GA. Such failures could materially affect GA's results of operations,
financial condition or liquidity. For example, GA's internal data networks are
interconnected with, or dependent upon, systems operated by third parties,
including telecommunications/data service providers and public utilities. Since
external parties are responsible for addressing their own Y2K readiness, GA is
unable to determine at this time whether any Y2K-related interruptions or
failures will occur or the extent to which any such


                                       9
<PAGE>   11

conditions might have a material impact on GA's results of operations, financial
condition or liquidity. GA's Y2K plan is expected to reduce the level of
uncertainty regarding GA's Y2K readiness and the Y2K readiness of external
parties. GA believes that, as the Y2K plan described above progresses, the
possibility of significant interruptions or failures of GA's operations as a
result of Y2K issues should be substantially reduced.

Contingency Plans

Contingency planning to maintain and restore service in the event of natural
disasters or technical problems has been part of GA's standard operating
procedures, and GA intends to leverage this experience in the development of
certain contingency plans being developed as parts of GA's overall Y2K readiness
activities. The contingency plan will include:

i.     a business impact analysis designed to identify and quantify the
       potential impact on GA in the event of an interruption of normal business
       operations

ii.    an incident management plan to be used by senior management and support
       personnel when responding to incidents that might interrupt or impact
       GA's ability to maintain normal business operations; and

iii.   business resumption plans and procedures to address interruptions or
       failures of GA's essential functions and services, such as
       infrastructure, business systems and applications or those provided by
       mission-critical external parties

Certain information regarding GA's Y2K plan constitutes forward-looking
statements and such statements are based upon certain assumptions. There can be
no assurance that GA's expectations will be achieved or that there will not be
delays, increased costs associated with the project or that GA will be
successful in remediating all Y2K issues. Factors that could impact success of
the plan include:

i.     the availability of personnel trained in specific technical area involved
       in GA's businesses

ii.    the ability to locate and correct all relevant software code in its
       business systems that could be affected by the Year 2000 and the
       successful remediation of Y2K issues by any mission-critical external
       parties such as telecommunications/data service providers and energy
       companies.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A


                                       10
<PAGE>   12

                    GENERAL AUTOMATION, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

On April 15, 1999, General Automation (the Plaintiff) filed a Complaint in the
Orange County Superior Court against PriceWaterhouseCoopers, LLP (as Defendant),
successor to PriceWaterhouse, which was General Automation's independent
auditors from 1991 through 1996. The gravamen of the action is that
PriceWaterhouse was negligent in its audits of General Automation's financial
statements and procedures, resulting in substantial reporting errors which were
only uncovered after PriceWaterhouse was replaced as the Company's independent
auditors in 1997. General Automation seeks general and punitive damages,
including its audit expenses, and losses resulting from its reliance upon the
inaccurate financial statements.

Since late 1991, the Company has been a party to litigation pending before the
Circuit Court of Cook County, Illinois, County Department, Chancery Division,
entitled 520 S. Michigan Ave. Associates, Ltd. d/b/a Congress Hotel vs. General
Automation and Maxial Systems, Inc. The Company filed a counter claim in this
action and, on July 2, 1996, judgment on the counter claim was entered in the
principal amount of $81,867 in favor of the Company. On April 26, 1999 the
Company was informed by its attorney that this judgement was vacated by the
judge on the case and the original counter claim will have to be litigated as
part of the on-going case. A trial-date of December 7, 1999 has been set by the
court and the Company intends to vigorously defend its position in this matter.
In the event of an unfavorable outcome to the Company in the case, the range of
potential liability could be between $200,000 and $400,000.

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

During the quarter ended June 30, 1999, the Company's Chairman of the Board,
Lawrence Michels, was placed on a medical leave of absence. At the regular
meeting of the board of directors on July 29, 1999 the board elected board
member Bob McClure as the new chairman to replace Mr. Michels.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

        Exhibit 27 -- Financial Data Schedule

Reports on Form 8-K. During the quarter covered by this report, the Company
filed the following Reports on Form 8-K:

        1.       Form 8-K filed on February 19, 1999 Regarding Forbearance
                 Agreement With Comerica Bank-California.

        2.       Form 8-K filed on July 14, 1999 reporting Lawrence Michels',
                 Chairman of the Board, leave of absence.


                                       11
<PAGE>   13

                                   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.


General Automation, Inc.
---------------------------
Registrant


   /s/ Jane M. Christie                              August 19, 1999
------------------------------------------           ---------------
Jane M. Christie                                     Date
President and Chief Executive Officer


  /s/ Richard H. Nance                               August 19, 1999
------------------------------------------           ---------------
Richard H. Nance                                     Date
Vice President and Chief Financial Officer



                                       12
<PAGE>   14

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number                              Description
------                              -----------
<C>               <S>
  27              Financial Data Schedule
</TABLE>