<PAGE>   1

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

         For the quarterly period ended OCTOBER 31, 1999

         [ ]      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 0-21053

                             PROCOM TECHNOLOGY, INC.
             (Exact name of registrant as specified in its charter)

          California                                             33-0268063
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                              Identification No.)


        1821 East Dyer Road, Santa Ana, CA                92705
      (Address of principal executive office)           (Zip Code)

                                 (949) 852-1000
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report.)


         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 in 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 of Common Stock, $.01 par value, outstanding on
November 30, 1999, was 11,238,011.

<PAGE>   2

                                     PART I
                             FINANCIAL INFORMATION

ITEM 1.  Financial Statements.

                     PROCOM TECHNOLOGY, INC. AND SUBSIDIARY
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                          OCTOBER 31,        JULY 31,
                                                             1999              1999
                                                         ------------      ------------
                                                         (UNAUDITED)
<S>                                                      <C>               <C>
Current assets:
  Cash ..............................................    $    962,000      $    227,000
  Short-term marketable securities, held to maturity.      18,816,000        22,206,000
  Accounts receivable, less allowance
    for doubtful accounts and sales
    returns of $2,270,000 and
    $2,461,000, respectively ........................       9,138,000         8,648,000
  Inventories, net ..................................       9,783,000         9,973,000
  Income tax receivable .............................       2,035,000         2,859,000
  Deferred income taxes .............................       1,560,000         1,833,000
  Prepaid expenses ..................................         491,000           515,000
  Other current assets ..............................         277,000           286,000
                                                         ------------      ------------
          Total current assets ......................      43,062,000        46,547,000
Property and equipment, net .........................       9,531,000         9,473,000
Other assets ........................................       1,023,000         1,068,000
                                                         ------------      ------------
          Total assets ..............................    $ 53,616,000      $ 57,088,000
                                                         ============      ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Line of credit ....................................    $    254,000      $    254,000
  Accounts payable ..................................      10,029,000        10,812,000
  Accrued expenses and other current liabilities ....       1,471,000         2,059,000
  Accrued compensation ..............................         929,000         1,212,000
  Deferred service revenues .........................         707,000           844,000
  Income taxes payable ..............................              --            18,000
                                                         ------------      ------------
          Total current liabilities .................      13,390,000        15,302,000
                                                         ------------      ------------
  Loan payable ......................................       7,500,000         7,500,000
          Total liabilities .........................      20,890,000        22,802,000
                                                         ------------      ------------

Commitments and contingencies
Shareholders' equity:
  Preferred stock, $.01 par value;
    10,000,000 shares authorized, no
    shares issued and outstanding ..................               --                --
  Common stock, $.01 par value;
    65,000,000 shares authorized,
    11,228,041 and 11,238,011 shares
    issued and outstanding,
    respectively ....................................         112,000           112,000
  Additional paid in capital ........................      18,243,000        18,198,000
  Retained earnings .................................      14,415,000        15,991,000
  Accumulated other comprehensive
    income (loss) ...................................         (44,000)          (15,000)
                                                         ------------      ------------
          Total shareholders' equity ................      32,726,000        34,286,000
                                                         ------------      ------------
      Total liabilities and shareholders' equity ....    $ 53,616,000      $ 57,088,000
                                                         ============      ============
</TABLE>


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


                                       2
<PAGE>   3

                     PROCOM TECHNOLOGY, INC. AND SUBSIDIARY

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED
                                              -----------------------------
                                               OCTOBER 31,      OCTOBER 31,
                                                  1999              1998
                                              ------------      -----------
                                               (UNAUDITED)       (UNAUDITED)
<S>                                           <C>               <C>
Net sales ...............................     $ 18,909,000      $30,401,000
Cost of sales ...........................       13,668,000       20,701,000
                                              ------------      -----------
     Gross profit .......................        5,241,000        9,700,000

Selling, general and administrative
  expenses ..............................        6,051,000        6,452,000
Research and development expenses .......        1,646,000        1,286,000
                                              ------------      -----------

     Operating income ...................       (2,456,000)       1,962,000

Other (income) expense
 Interest income ........................          286,000          325,000
 Interest (expense) .....................               --           (5,000)
                                              ------------      -----------

Income (loss) before income taxes .......       (2,170,000)       2,282,000
Provision (benefit) for income taxes ....         (594,000)         847,000
                                              ------------      -----------
     Net income (loss) ..................     $ (1,576,000)     $ 1,435,000
                                              ============      ===========

Net income (loss) per common share:
Basic ...................................     $      (0.14)     $      0.13
                                              ============      ===========
Diluted .................................     $      (0.14)     $      0.13
                                              ============      ===========

Weighted average number of common shares:
Basic ...................................       11,238,000       11,167,000
                                              ============      ===========
Diluted .................................       11,238,000       11,308,000
                                              ============      ===========
</TABLE>

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


                                       3
<PAGE>   4

                     PROCOM TECHNOLOGY, INC. AND SUBSIDIARY

            CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                        COMMON STOCK                                                 ACCUMULATED
                                -----------------------------        PAID IN           RETAINED     COMPREHENSIVE
                                  SHARES            AMOUNT           CAPITAL           EARNINGS        INCOME           TOTAL
                                -----------      ------------      ------------      ------------   -------------    ------------
<S>                             <C>              <C>               <C>               <C>               <C>           <C>
Balance at July 26, 1996 ....     9,000,000             3,000                --         5,133,000            --         5,136,000
  Comprehensive income:
  Net income ................            --                --                --         8,447,000            --         8,447,000
                                                                                                                     ------------
  Comprehensive income ......                                                                                           8,447,000
  Change in par value to
    $.01 per share ..........            --            87,000             3,000           (90,000)           --                --
  Public offering of
    2,000,000 shares ........      2,000,000           20,000        16,166,000                --            --        16,186,000
  Compensatory
    stock options ...........            --                --            35,000                --            --            35,000
  Exercise of employee
    stock options ...........        24,562                --            62,000                --            --            62,000
  Tax benefit from exer-
    cise of options .........            --                --           201,000                --            --           201,000
                                -----------      ------------      ------------      ------------      --------      ------------
Balance at July 31, 1997 ....    11,024,562           110,000        16,467,000        13,490,000            --        30,067,000
  Comprehensive income:
  Net income ................            --                --                --         5,376,000            --         5,376,000
  Foreign currency
    translation .............            --                --                --                --         3,000             3,000
                                                                                                                     ------------
  Comprehensive income ......                                                                                           5,379,000
  Exercise of employee
    stock options and
    related tax benefit .....        50,036             1,000           143,000                --            --           144,000
  Tax benefit from exer-
    cise of options .........            --                --           242,000                --            --           242,000
  Acquisition of
    Megabyte ................       104,144             1,000           899,000                --            --           900,000
                                -----------      ------------      ------------      ------------      --------      ------------
Balance at July 31, 1998 ....    11,178,742      $    112,000      $ 17,751,000      $ 18,866,000      $  3,000      $ 36,732,000
  Comprehensive loss:
  Net loss ..................            --                --                --        (2,875,000)           --        (2,875,000)
  Foreign currency
    translation .............            --                --                --                --       (18,000)          (18,000)
                                                                                                                     ------------
  Comprehensive loss ........                                                                                          (2,893,000)
  Exercise of employee
    stock options and
    related tax benefit .....        41,013                --           152,000                --            --           152,000
  Issuance of stock
    to employees ............         5,531                --            39,000                --            --            39,000
  Tax benefit from exer-
    cise of options .........            --                --            71,000                --            --            71,000
  Stock repurchases .........       (77,845)           (1,000)         (400,000)               --            --          (401,000)
  Acquisitions ..............        79,600             1,000           585,000                --            --           586,000
                                -----------      ------------      ------------      ------------      --------      ------------
Balance at July 31, 1999 ....    11,227,041      $    112,000      $ 18,198,000      $ 15,991,000      $(15,000)     $ 34,286,000
  Comprehensive loss:
  Net loss ..................            --                --                --        (1,576,000)           --        (1,576,000)
  Foreign currency
    translation .............            --                --                --                --       (29,000)          (29,000)
                                                                                                                     ------------
  Comprehensive loss ........                                                                                          (1,605,000)
  Exercise of employee
    stock options and
    related tax benefit .....        10,970                --            45,000                --            --            45,000
                                -----------      ------------      ------------      ------------      --------      ------------
Balance at October 31, 1999..    11,238,011      $    112,000      $ 18,243,000      $ 14,415,000      $(44,000)     $ 32,726,000
                                ===========      ============      ============      ============      ========      ============
</TABLE>

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


                                       4
<PAGE>   5

                     PROCOM TECHNOLOGY, INC. AND SUBSIDIARY

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                          ------------------------------
                                                          OCTOBER 31,       OCTOBER 31,
                                                              1999              1998
                                                          ------------      ------------
                                                          (UNAUDITED)       (UNAUDITED)
<S>                                                       <C>               <C>
Cash flows from operating activities:
  Net income (loss) .................................     $ (1,576,000)     $  1,435,000
    Adjustments to reconcile net income (loss) to net
      cash (used) provided by operating activities:
    Depreciation and amortization ...................          226,000           286,000
    Changes in assets and liabilities:
         Accounts receivable ........................         (490,000)          850,000
         Inventories ................................          190,000           472,000
         Deferred income taxes ......................        1,097,000                --
         Prepaid expenses ...........................           24,000            96,000
         Other current assets .......................            9,000           (13,000)
         Other assets ...............................            2,000            59,000
         Accounts payable ...........................         (783,000)       (1,320,000)
         Accrued expenses ...........................       (1,534,000)         (330,000)
         Accrued compensation .......................         (284,000)         (538,000)
         Deferred service revenue ...................          707,000           173,000
         Income taxes payable .......................          (18,000)          (61,000)
                                                          ------------      ------------
             Net cash (used) provided by
               operating activities .................       (2,430,000)        1,109,000
                                                          ------------      ------------
Cash flows from investing activities:
  Investments in short-term marketable securities ...       (7,028,000)               --
  Purchase of property and equipment ................         (241,000)         (106,000)
                                                          ------------      ------------
             Net cash used by
               investing activities .................       (7,269,000)         (106,000)
                                                          ------------      ------------
Cash flows from financing activities:
  Borrowings on line of credit ......................               --           108,000
  Repurchases of common stock .......................               --           (92,000)
  Stock options, exercises, and
    related tax benefits ............................           45,000            18,000
                                                          ------------      ------------
             Net cash provided by
               (used in) financing
               activities ...........................           45,000            34,000
    Effect of exchange rate changes .................          (29,000)           26,000
                                                          ------------      ------------
    Increase (decrease) in cash .....................       (9,683,000)        1,063,000
Cash and cash equivalents at beginning of period ....       22,433,000        23,362,000
                                                          ------------      ------------
Cash and cash equivalents at end of period ..........     $ 12,750,000      $ 24,425,000
                                                          ============      ============
   Supplemental disclosures of cash flow information:
     Cash paid (received) during the periods for:
      Interest ......................................     $         --      $         --
      Income taxes ..................................     $ (1,097,000)     $    900,000
</TABLE>


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


                                       5
<PAGE>   6

                     PROCOM TECHNOLOGY, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           FOR THE THREE MONTHS ENDED
                      OCTOBER 31, 1999 AND OCTOBER 31, 1998

NOTE 1.  GENERAL

The accompanying financial information is unaudited, but in the opinion of
management, reflects all adjustments (which include only normally recurring
adjustments) necessary to present fairly the financial position of Procom
Technology, Inc. and its consolidated subsidiaries (the "Company") as of the
dates indicated and the results of operations for the periods then ended.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. While the Company believes that the
disclosures are adequate to make the information presented not misleading, the
financial information should be read in conjunction with the audited financial
statements, and notes thereto for the three years ended July 31, 1999 included
in the Company's Report on Form 10-K for fiscal 1999. Results for the interim
period are not necessarily indicative of the results for the entire year.

NOTE 2.   EARNINGS PER SHARE.

Net income (loss) per share has been computed using the weighted average number
of shares outstanding during the periods presented. For the periods presented,
basic net income per share was based on the weighted average number of shares of
common stock outstanding during the period. For the same periods, diluted net
income per share further included the effect of dilutive stock options (computed
using the treasury stock method) outstanding during the periods where the
Company realized net income, while no dilution is computed for periods where the
Company realized a net loss. The following table sets forth the effects of such
dilution for each period presented.

                                                    Quarter Ended October 31,
                                                  -----------------------------
                                                     1999               1998
                                                  ----------         ----------
Weighted average shares outstanding               11,238,000         11,167,000
Dilutive effect of stock options                          --(A)         141,000
                                                  ----------         ----------
    Total                                         11,238,000         11,308,000
                                                  ==========         ==========

(A) Except for the net loss in the quarter ended October 31, 1999, approximately
    604,000 shares would have been included in the computation of weighted
    average shares outstanding.

                                       6
<PAGE>   7

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

General

OVERVIEW

    This Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward looking statements are often identified
with terms such as "expects", "believes", "intends", and the like. Such
forward-looking statements include, but are not limited to, comments regarding
the Company's revenue, revenue mix, product pricing, gross margins, increased
promotional, advertising and research and development spending, and the expanded
marketing efforts of the Company. Actual results could differ materially from
those projected in the forward-looking statements as a result of important
factors including, without limitation, competitive product introductions, price
competition, any failure or delay in the Company's ability to develop and
introduce new products, the failure of any significant customer, adverse
economic conditions generally and other factors set forth in the Company's
filings with the Securities and Exchange Commission.

    The Company was formed in 1987, and historically, has been a manufacturer
and reseller of data storage systems distributed through a world-wide network of
distributors, VARs and computer stores and primarily used by Fortune 500 and
mid-sized business enterprises, governmental agencies and educational
institutions. In the last two years, the Company has significantly increased its
focus on the development and sale of network attached storage appliances
("NAS"), which provide for more efficient service of data through simplified
data management with improved network performance at lower overall costs. The
Company has continued to develop more complex NAS products, and expects to
continue to develop, market and ship an increasing percentage of NAS products in
future periods. In early December 1999, the Company executed an OEM agreement
with Hewlett-Packard Company ("HP"), under which the Company will supply a
customized version of its mid-range NAS Filer hardware and software currently
under development. Under the agreement, which has a five year term, and which
has no minimum quantity commitments, the Company expects that HP will market and
support the NAS appliances through its network of computer resellers. The
Company currently anticipates that it will commence shipments under the
agreement in calendar year 2000.

    During the year ended July 31, 1998, the Company acquired two entities who
had distributed or sold storage application products: Megabyte Computerhandels
AG, a Munich, Germany based distributor of high end computer storage products
("Megabyte"), and Invincible Technologies Corp., a Massachusetts based reseller
of high end storage application products ("Invincible"). In the year ended July
31, 1999, the Company also acquired two European distributors, one in Italy and
one in Switzerland.

    The Company generally records sales upon product shipment. The Company
presently maintains agreements with many of its computer resellers, VARs and
distributors that allow limited returns (including stock balancing) and price
protection privileges. The Company has in the past experienced high return
rates. The Company maintains reserves for anticipated returns (including stock
balancing) and price protection privileges. These reserves are adjusted at each
financial reporting date to state fairly the anticipated returns (including
stock balancing) and price protection claims relating to each reporting period.
Generally, the reserves will increase as sales and corresponding returns
increase. In addition, under a product evaluation program established by the
Company, computer resellers, VARs, distributors and end users generally are able
to purchase products on a trial basis and return the products within a specified
period if they are not satisfied. Evaluation units are not recorded as sales
until the customer has paid for such units.

    The majority of the Company's sales are denominated in U.S. dollars, and
accordingly, the Company does not believe that fluctuations in foreign exchange
rates have had or will have a material adverse effect on the Company's results
of operations or financial condition,


                                       7
<PAGE>   8

except to the extent that such fluctuations could cause the Company's products
to become relatively more expensive to end users in a particular country,
leading to a reduction of sales in that country.

    Historically, the Company's gross margins have experienced significant
volatility. The Company's gross margins vary significantly by product line, and,
therefore, the Company's overall gross margin varies with the mix of products
sold by the Company. The Company's markets are also characterized by intense
competition and declining average unit selling prices as products mature over
the course of the relatively short life cycle of individual products, which have
often ranged from six to twelve months. In addition, the Company's gross margins
may be adversely affected by availability and price increases associated with
key products and components from the Company's suppliers, some of which have
been in short supply, and inventory obsolescence resulting from older generation
products or the unexpected discontinuance of third party components. Finally,
the Company's margins vary with the mix of its distribution channels and with
general economic conditions.


                                       8
<PAGE>   9

RESULTS OF OPERATIONS

    The following table sets forth the Company's statement of operations data as
a percentage of net sales for the periods indicated.

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                      ----------------------------
                                                      OCTOBER 31,      OCTOBER 31,
                                                          1999            1998
                                                      -----------      -----------
                                                      (UNAUDITED)      (UNAUDITED)
<S>                                                   <C>              <C>
          Net sales ..............................       100.0%           100.0%
          Cost of sales ..........................        72.3             68.1
                                                         -----            -----
            Gross profit .........................        27.7             31.9
          Selling, general and administrative
            expenses .............................        32.0             21.2
          Research and development expenses ......         8.7              4.2
                                                         -----            -----
            Operating income (loss) ..............       (13.0)             6.5
          Interest income and (expense), net......         1.5              1.0
                                                         -----            -----
            Income (loss) before income
              taxes ..............................       (11.5)             7.5
          Provision (benefit) for income
            taxes ................................        (3.1)             2.8
                                                         -----            -----
            Net income (loss) ....................        (8.4)%            4.7%
                                                         =====            =====
</TABLE>

QUARTER ENDED OCTOBER 31, 1999 COMPARED TO QUARTER ENDED OCTOBER 31, 1998

    Net Sales

    Net sales decreased 37.8% from $30.4 million for the quarter ended October
31, 1998 to $18.9 million for the quarter ended October 31, 1999, and declined
22.0% compared to net sales of $24.2 million for the most recent quarter ended
July 31, 1999. The decrease in sales for the same quarter one year ago was due
primarily to a significant decrease in sales of CD servers and arrays during the
quarter ended October 31, 1999 as well as reduced industry wide demand for the
Company's disk drive upgrade subsystems for desktop computers, combined with the
effect of significant price erosion which has continued to occur in the disk
drive industry. The reduction from sales for the previous quarter was primarily
due to a significant decrease in sales of CD servers and arrays and reduced
demand for disk drive upgrade solutions. During the quarter ended October 31,
1999, the Company identified certain products, primarily third party high
capacity storage and software products, that no longer contribute to the
Company's future plans for NAS storage solutions, and reductions in sales of
those products was a significant factor in the reduced sales in that quarter.
The Company expects to see a continued weakness in the demand for its upgrade
disk drive storage products and CD-ROM products throughout the balance of fiscal
2000. For the quarter ended October 31, 1999, sales of the Company's Network
Attached Storage (NAS) Products, which comprise certain CD servers/disk drive
combinations and arrays and disk based NAS systems, comprised approximately $2.6
million, or approximately 14% of net sales. International sales decreased,
although the Company saw a larger portion of its net sales come from Europe,
where its recent acquisitions are headquartered. International sales decreased
from $7.9 million, or approximately 26.2% of net sales, in the quarter ended
October 31, 1998 to $7.7 million, or approximately 40.9% of net sales, for the
quarter ended


                                       9
<PAGE>   10

October 31, 1999 due primarily to the inclusion of the revenues of Megabyte,
Pera and Gigatek and the reduced US sales of Procom's CD servers and arrays.

    Gross Profit

    The Company's gross margins decreased from 31.9% of net sales for the
quarter ended October 31, 1998 to 27.7% of net sales for the quarter ended
October 31, 1999. These decreases were primarily the result of the inclusion of
the revenues of Megabyte and Gigatek, which have historically experienced lower
margins, and to a lesser extent, reductions in sales of CD servers and arrays,
which have historically experienced higher margins. The Company anticipates that
it will continue to experience lower gross margins until it ships significant
quantities of NAS products, if those NAS products generate higher than average
gross margins.

    Selling, General and Administrative Expenses

    Selling, general and administrative expenses decreased from $6.5 million, or
21.2% of net sales for the quarter ended October 31, 1998 to $6.1 million, or
32.0% of net sales for the quarter ended October 31, 1999. The dollar decrease
in selling, general and administrative expenses for the first quarter of fiscal
1999 compared to the same quarter in fiscal 1998 was primarily due to increased
co-operative advertising costs, increased personnel and related costs necessary
to support the Company's operating plans, and the administrative costs of the
Company's recent acquisitions, offset by significant reductions in advertising
costs and sales commissions, due to the reduction in net sales, and reduced
legal expenses as the Company concluded litigation in fiscal 1999. The Company
anticipates that the dollar amount of its selling, general and administrative
expenses will increase as the Company expands its efforts to penetrate certain
sales channels and regions, makes strategic acquisitions, and continues to
strengthen and upgrade its existing management information and
telecommunications systems.

    Research and Development

    Research and development expenses increased from $1.3 million, or 4.2% of
net sales for the quarter ended October 31, 1999, to $1.6 million, or 8.7% of
net sales for the quarter ended October 31, 1999. The increases were primarily
due to continued increases in additional hardware developers and software
programmers to develop additional NAS products and enhance existing product
features. The Company anticipates that the dollar amount of its research and
development expenses will continue to increase, and also may increase as a
percentage of net sales, with the expected addition of dedicated engineering
resources to develop new product categories. These additions are being made to
increase the likelihood that the Company's products will be compatible with a
wide range of hardware platforms and network topologies and to further develop
NetFORCE NAS products, the Company's proprietary client/server management
storage architecture. In addition, the Company intends to continue to update
software drivers to ensure that the Company's CD servers and arrays function
with a variety of hardware platforms and network operating systems.

    Interest Income and Expense

     During each of the quarters ended October 31, 1998 and 1999, the Company
invested its available cash in investment grade commercial paper with maturities
of less than 180 days. Because the Company's investable cash position decreased
somewhat in the current quarter compared to the same period one year ago, net
interest income decreased slightly in the current quarter to $286,000 from
$325,000 for the same period one year ago. Interest expense in fiscal 1999
includes relatively small amounts of interest paid on lines of credits
maintained by the Company's foreign subsidiaries.


                                       10
<PAGE>   11

    Income Taxes

    The Company's effective tax benefit and tax rates for the first quarter of
fiscal 1999 and fiscal 1998 were (27.4%) and 37.1%, respectively. In the quarter
ending October 31, 1999, the tax benefit rate was lower than the combined
federal and state statutory rates due to operational losses at the Company's
European subsidiaries, where no benefit is recorded, as well as reduced benefits
from the loss of the California net operating loss deduction for losses
occasioned in that state. The fiscal 1998 rate of 37.1%, which approximate the
federal and state statutory rates with modest reductions for benefits resulting
from the Company's use of its foreign sales corporation ("FSC") and benefits
accruing from the increases in research and development activity, causing
increased research and development credits.

General Comments

    The Company's results of operations have in the past varied significantly
and are likely in the future to vary significantly as a result of a number of
factors, including the mix of products sold, the volume and timing of orders
received during the period, the timing of new product introductions by the
Company and its competitors, product line maturation, the impact of price
competition on the Company's average selling prices, the availability and
pricing of components for the Company's products, changes in distribution
channel mix and product returns or price protection charges from customers. Many
of these factors are beyond the Company's control. Although the Company
experienced growth in sales in some previous periods, there can be no assurance
that the Company will experience growth in the future or be profitable on an
operating basis in any future period. In addition, due to the short product life
cycles that characterize the Company's markets, a significant percentage of the
Company's sales each quarter may result from new products or product
enhancements introduced in that quarter. Since the Company relies on new
products and product enhancements for a significant percentage of sales, failure
to continue to develop and introduce new products and product enhancements or
failure of these products or product enhancements to achieve market acceptance
could have a material adverse effect on the Company's business, financial
condition and results of operations. Historically, as the Company has planned
and implemented new products, it has experienced unexpected reductions in sales
and gross profit of older generation products as customers have anticipated new
products. These reductions have in the past given and could continue to give
rise to charges for obsolete or excess inventory, returns of older generation
products by computer resellers, VARs and distributors or substantial price
protection charges. From time to time, the Company has experienced and may in
the future experience inventory obsolescence resulting from the unexpected
discontinuance of third party components, such as disk drives, included in the
Company's products. To the extent the Company is unsuccessful in managing
product transitions, the Company may experience a material adverse effect on the
Company's business, financial condition and results of operations.

    The Company also has seen significant reduced demand and revenues for its CD
servers and some notebook upgrade disk drive products during the quarter ended
October 31, 1999, and is currently analyzing the market demands and
opportunities for those products in the future while transitioning existing
users to more complex information access solutions such as CD-FORCE and the
Company's NAS solutions.

    The Company has embarked on a strategy to acquire other entities that it
believes are complementary to the Company's products, markets or services. The
Company does not have significant experience in managing the acquisition process
or the operations of newly acquired acquisition targets. While the Company
believes that its recent acquisitions have helped position the Company for
long-term growth, especially in Europe, each of the acquisitions brings unique


                                       11
<PAGE>   12

and sometimes costly challenges to resolve or overcome. For example, in the
quarter ended April 30, 1999, the Company wrote off approximately $2.4 million
in costs related to the acquisition of Invincible in June 1998. There can be no
assurance that the Company's acquisition strategy will be successful, or that
the Company will be successful in managing the acquisition target after the
acquisition is completed. To the extent the Company is unsuccessful in either
the acquisition process or in managing the acquisition target, there could be a
material adverse effect on the Company's business, financial condition and
results of operations.

LIQUIDITY AND CAPITAL RESOURCES

    In November 1994, the Company instituted a revolving line of credit with
Finova Capital ("Finova"). The facility was amended in November 1996 to provide
the Company with up to $20.0 million in working capital loans, based upon the
Company's accounts receivable and inventory levels. The line of credit accrues
certain commitment fees, unused facility fees and interest on outstanding
amounts at the lender's prime rate (8.0% at October 31, 1999) plus 1.5%. Finova
also makes available to the Company various flooring commitments pursuant to
which the Company may finance the purchase of up to $13.0 million in inventory
(less any amounts outstanding in working capital loans) from certain of the
Company's vendors who have credit arrangements with Finova. As of October 31,
1999, there was no balance outstanding under the credit facility, and $1.5
million outstanding under the flooring arrangements. The agreement governing the
credit facility requires the Company to maintain certain financial covenants
(including the maintenance of working capital of at least $500,000), minimum
levels of tangible net worth and minimum levels of liquidity. As of October 31,
1999, the Company was in compliance with the covenants of the Finova line of
credit. The initial term of the line of credit expired on November 29, 1997, but
automatically renews for successive one year periods unless terminated by either
party within a specified period in advance of the automatic renewal date.

    During the quarter ended April 30, 1999, the Company closed a collateralized
line of credit to finance the acquisition of land intended for the Company's
long term corporate headquarters in Irvine, California. The line is for a total
of $7,500,000, for 18 months, and accrues interest at 6.125%. Approximately
$10,000,000 of the Company's short term cash is pledged as security for
repayment of the line of credit. In addition, the Company maintains a small line
of credit for Megabyte's and Gigatek's cash management needs.

    Subsequent to July 31, 1998, the Company's Board of Directors approved an
open market stock repurchase program. Pursuant to the program, the Company is
authorized to effect repurchases of up to $2 million in shares of its common
stock. The Company expects that it will make such repurchases from time to time,
when it determines that such repurchases are the best available use of the
Company's available cash, given the price of the Company's stock and the
interest income the Company would otherwise earn on the Company's available
cash. The Company intends to make any repurchases subject to an ongoing buyback
program, and currently does not intend to repurchase more shares than the number
of shares which are issued pursuant to employee stock option exercises or other
employee stock purchase programs. During the quarter ended October 31, 1999, the
Company made no repurchases. The Company intends to continue to make repurchases
under the plan as long as the price of the shares purchased represents an
attractive use of the Company's cash.

    The Company has recently purchased an 8.5 acre parcel of land in Irvine,
California, where it is developing a corporate headquarters facility, which the
Company expects will be ready for occupancy in the year 2000. The cost of the
land, together with the currently estimated cost to construct the facility,
would approximate $14-15 million. The Company is


                                       12
<PAGE>   13

considering various development and financing options, and believes that it will
have the capital resources available to it to finance and complete the building.

    As of October 31, 1999, the Company had cash and restricted cash balances
of $19.8 million and $18.5 million of availability under its line of credit. The
Company believes that these cash balances and available credit under its
existing lines of credit will be sufficient to meet anticipated cash
requirements for at least the next twelve months. The Company will continue to
acquire fixed assets and make expenditures to support its growth. In addition,
in fiscal 1998, the Company completed two acquisitions utilizing its own cash
and common stock, and in the quarter ended April 30, 1999, the Company completed
two additional acquisitions utilizing its own cash and common stock. The Company
has made cash advances to continue the operations of the entities acquired
during fiscal 1998 and during this quarter, of approximately $5 million.
Additional advances may be necessary in the future in order to continue the
orderly operation of the entities acquired. The Company has had discussions
concerning potential acquisitions with various businesses which have or offer
products and technologies that are complementary to those of the Company. The
Company may acquire additional businesses in the future. There can be no
assurance that any such potential acquisitions could or will be completed. In
the event the Company's plans, including the development of the corporate
headquarters or the funds expended in the stock buyback program, require more
capital than is presently anticipated, the Company's remaining cash balances may
be consumed and additional sources of liquidity such as debt or equity
financings may be required to meet working capital needs. There can be no
assurance that additional capital beyond the amounts currently forecast by the
Company will not be required nor that any such required additional capital will
be available on reasonable terms, if at all, at such time or times as required
by the Company.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

INTEREST RATE RISK

    The Company's exposure to market risk for changes in interest rates relates
primarily to the increase or decrease in the amount of interest income the
Company can earn on its investment portfolio. The Company does not use
derivative financial instruments in its investment portfolio. The Company
invests in high-credit quality issuers and, by policy, limits the amount of
credit exposure to any one issuer. As stated in its policy, the Company ensures
the safety and preservation of its invested principal funds by limiting default
risk, market risk and reinvestment risk. The Company mitigates default risk by
investing in safe and high-credit quality securities and by constantly
positioning its portfolio to respond appropriately to a significant reduction in
a credit rating of any investment issuer, guarantor or depository. The portfolio
includes only marketable securities with active secondary or resale markets to
ensure portfolio liquidity. Because the Company intends to hold all of its
portfolio investments to maturity, and those maturities are less than 90 days
from the balance sheet date, the carrying value of the portfolio approximates
the market value, and the average annualized yield on the portfolio is, at
October 31, 1999, 5.7%.

FOREIGN CURRENCY EXCHANGE RISK

    The Company transacts business in various foreign countries, and has
significant assets deployed outside the United States in Europe, primarily
Germany. The Company has effected intercompany advances and sold goods to
Megabyte and its Swiss and Italian subsidiaries denominated in U.S. dollars, and
those amounts are subject to currency fluctuation, and require constant
revaluation on the Company's financial statements. The Company does not operate
a hedging program to mitigate the effect of a significant rapid change in the
value of the German mark compared to the U.S. dollar. If such a change did
occur, the Company would have to take into account a currency exchange gain or
loss in the amount of the change in the U.S. dollar denominated balance of the
amounts outstanding at the time of such change. While the Company does not
believe such a gain or loss is likely, and would not likely be material, there
can be no assurance that such a


                                       13
<PAGE>   14

loss would not have a material adverse effect on the Company's results of
operations or financial condition. At October 31, 1999, the Company had U.S.
dollar denominated advances and open trade accounts to its European
subsidiaries of $4.1 million.

YEAR 2000 PREPAREDNESS INFORMATION

    The Year 2000 issue is the result of computer programs, microprocessors, and
embedded date reliant systems using two digits rather than four to define the
applicable year. If such programs are not corrected, date data concerning the
Year 2000 could cause many systems to fail, lock up or generate erroneous
results. The Company considers a product to be "Year 2000 compliant" if the
product's performance and functionality are unaffected by processing of dates
prior to, during and after the Year 2000, but only if all products (for example
hardware, software and firmware) used with the product properly exchange
accurate date data with it. The Company believes that as data storage devices,
its hard drive products are transparent to Year 2000 requirements, and rely
primarily on software found in operating systems and applications to function
properly. After significant testing, the Company believes its current hard drive
and CD-ROM products are Year 2000 compliant, although other products previously
sold by the Company may not be Year 2000 compliant. In September 1998, the
Company began to offer a limited Year 2000 warranty on products sold by the
Company after that date. Previous to September 1998, the Company did not offer
any such warranty on any of its products. The Company believes that it may be
possible that litigation may be brought against vendors, including the Company,
of all component products of systems that are unable to properly manage data
related to the Year 2000. The Company's agreements with customers and end users,
both for products sold before and after September 1998, typically contain
provisions designed to limit the Company's liability for such claims. It is
possible, however, that these measures will not provide protection from
liability claims, as a result of existing or future federal, state or local laws
or ordinances or unfavorable judicial decisions. Any such claims, with or
without merit, could result in a material adverse effect on the Company's
business, financial condition and results of operations, customer satisfaction
issues and potential lawsuits.

    The Company has identified Year 2000 dependencies in its primary accounting
software, and other systems, equipment, and processes and has implemented
changes to such systems, updating or replacing such equipment, and modifying
such processes to make them Year 2000 compliant. The Company is now assessing
its internal Year 2000 issues and is in the process of remediation of the
critical systems. The Company believes the Company's current accounting software
systems appear are now Year 2000 compliant. The Company has completed formal
communications with many of its significant suppliers and financial institutions
to evaluate their Year 2000 compliance plans and state of readiness and to
determine whether any Year 2000 issues will impede the ability of such suppliers
to continue to provide goods and services to the Company. As a general matter,
the Company is vulnerable to any failure by its key suppliers to remedy their
own Year 2000 issues, which could delay shipments of essential components,
thereby disrupting or halting the Company's manufacturing operations. Further,
the Company also relies, both domestically and internationally, upon
governmental agencies, utility companies, telecommunication service companies
and other service providers outside of the Company's control. There is no
assurance that such suppliers, governmental agencies, financial institutions, or
other third parties will not suffer business disruption caused by a Year 2000
issue, and there is little practical opportunity for the Company to test or
require Year 2000 compliance from many of those large agencies, companies or
providers. Such failures could have a material adverse effect on the Company's
business, financial condition and results of operations. Additionally, the
Company is communicating with its large customers to determine the extent to
which the Company is vulnerable to those third parties' failure to remedy their
own Year 2000 issues.


                                       14
<PAGE>   15
     The Company anticipates that its internal systems, equipment and processes
will be substantially Year 2000 compliant. A formal budget has not been
established, and the cost to the Company of achieving Year 2000 compliance is
evolving; however, it is not currently expected to have a material effect on the
Company's financial condition or results of operations. The Company has to date
spent approximately $200,000 to upgrade computer hardware, and approximately
$50,000 to upgrade the Company's accounting software, to ensure Year 2000
compliance, and the amounts will be capitalized and depreciated over the useful
life of the asset, expected to be 3 years. The Company anticipates that the cost
of Year 2000 compliant software (including the upgraded accounting software
noted above) and hardware could exceed $.3 million, and is not likely to exceed
$.5 million, (excluding the costs of the Year 2000 compliance problems
associated with the Company's vendors, customers, financial institutions and
government agencies noted above) although the Company believes that a
significant amount of the total expenditures would be capitalized and
depreciated over the useful life of the applicable asset, such as computer
hardware or software replaced to keep pace with technological advances. The
Company's Year 2000 compliance charges have been paid from existing Company
working capital, and that the total Year 2000 compliance budget is approximately
50% of the Company's total IT expenditures. While the Company has developed, and
is continually assessing, contingency plans for various occurrences and business
risks, it has not developed a specific Year 2000 failure contingency plan. The
Company does not expect that its customers will "stockpile" the Company's
products in anticipation of a Year 2000 disaster, nor does the Company intend to
"stockpile" components or inventory from its vendors. While the Company
currently expects that the Year 2000 issue will not pose significant internal
operational problems, delays in the Company's final efforts, or a failure to
fully identify all Year 2000 dependencies in the systems, equipment or processes
of the Company or its vendors, customers or financial institutions or the
Company's failure to have adequately planned for such events, could have
material adverse consequences, including delays in the manufacture, delivery or
sale of products.


                                       15
<PAGE>   16

                                     PART II
                                OTHER INFORMATION

Item 1. Legal Proceedings.

    The Company is from time to time involved in litigation related to its
ordinary operations, such as collection actions and vendor disputes. The Company
does not believe that the resolution of any such existing claim or lawsuit will
have a material adverse affect on the Company's business, results of operations
or financial condition.

Item 2. Changes in Securities and Use of Proceeds.

    Not applicable.

Item 3. Defaults Upon Senior Securities.

    Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

    Not applicable.

Item 5. Other Information.

    Not applicable.

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

    (a) See Exhibit Index. No Statement re Computation of Per Share Earnings is
        included, because the computation can be clearly determined from
        material contained in this Report. See the Consolidated Statements of
        Operations, and the Notes thereto.

    (b) Reports on Form 8-K. None.


                                       16
<PAGE>   17

                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Irvine, County of
Orange, State of California, on the 15th day of December, 1999.

                                          PROCOM TECHNOLOGY, INC.


                                          By:  /s/   Alex Razmjoo
                                               ---------------------------------
                                               Alex Razmjoo
                                               Chairman, President and
                                               Chief Executive Officer

    Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report on Form 10-Q has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
           SIGNATURE                             TITLE                           DATE
           ---------                             -----                           ----
<S>                              <C>                                      <C>

    /s/      Alex Razmjoo        Chairman of the Board, President and     December 15, 1999
------------------------------   Chief Executive Officer (Principal
             Alex Razmjoo        Executive Officer)


    /s/       Alex Aydin         Executive Vice President, Finance and    December 15, 1999
------------------------------   Administration (Principal Financial
              Alex Aydin         Officer)


    /s/     Frederick Judd       Vice President, Finance and General      December 15, 1999
------------------------------   Counsel (Principal Accounting Officer)
            Frederick Judd
</TABLE>


                                       17
<PAGE>   18

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                                                   SEQUENTIALLY
 EXHIBIT                                                                                                              NUMBER
 NUMBER                                   DESCRIPTION                                                                  PAGE
 -------                                  -----------                                                              -----------
<C>         <S>                                                                                                    <C>
   3.1+     Amended and Restated Articles of Incorporation of the Company.......................................
   3.2+     Amended and Restated Bylaws of the Company..........................................................
  10.1+     Form of Indemnity Agreement between the Company and each of its executive officers and directors....
  10.2+     Form of Amended and Restated Procom Technology, Inc. 1995 Stock Option Plan.........................
  10.3+     Amended and Restated Executive Employment Agreement, dated as of October 28, 1996, between the
            Company and Alex Razmjoo............................................................................
  10.4+     Amended and Restated Executive Employment Agreement, dated as of October 28, 1996, between the
            Company and Frank Alaghband.........................................................................
  10.5+     Amended and Restated Executive Employment Agreement, dated as of October 28, 1996, between the
            Company and Alex Aydin..............................................................................
  10.6+     Amended and Restated Executive Employment Agreement, dated as of October 28, 1996, between the
            Company and Nick Shahrestany........................................................................
  10.7+     Form of Registration Rights Agreement...............................................................
  10.8+     Lease, dated February 10, 1992, between 2181 Dupont Associates and the Company, as amended..........
  10.9+     Loan and Security Agreement, dated November 18, 1994, by and between the Company and FINOVA Capital
            Corporation, as amended.............................................................................
  10.10+    Asset Purchase Agreement, dated June 24, 1998 among Invincible Technologies Corporation, Invincible
            Technologies Acquisition Corporation, and certain stockholders of Invincible Technologies
            Corporation named therein...........................................................................
  10.11     Lease, dated November 9, 1998, between Arden Realty Limited Partnership and the Company, as amended.
  11.1+     Statement re: Computation of Earnings Per Share.....................................................
  21.1+     List of Subsidiaries................................................................................
  27.1      Financial Data Schedule.............................................................................
</TABLE>

----------

+  Previously filed