<PAGE>   1


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  FORM 10-QSB/A


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


                For the quarterly period ended December 31, 1998
                                               -----------------

                         Commission file number 0-16011
                                                -------

                            USTMAN TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)


                                   California
                                   ----------
                         (State or other jurisdiction of
                         incorporation or organization)

                                   95-2873757
                                   ----------
                      (I.R.S. Employer Identification No.)

                            12265 W. Bayaud Ave #110
                                  Lakewood, CO
                            ------------------------
                    (Address of principal executive offices)

                                      80228
                                      -----
                                   (Zip Code)

                                 (303) 986-8011
                                 --------------
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. X  Yes     No
                                                         ---     ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date: 19,879,243 shares of Common Stock as of
February 5, 1999.

Transitional Small Business Disclosure Format (check one):   X  Yes     No
                                                            ---     ---



                                       1
<PAGE>   2



PART I -- FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheet


<TABLE>
<CAPTION>
                                                            December
                                                            31,1998         June 30,
                                                          (unaudited)         1998
                                                          ------------    ------------
<S>                                                       <C>             <C>
ASSETS
        CURRENT ASSETS
              Cash and equivalents                        $     24,000    $    366,000
              Accounts receivable, net                       1,193,000         826,000
              Inventory                                        166,000         112,000
              Prepaid expenses and other current assets        125,000          70,000
                                                          ------------    ------------
       Total current assets                                  1,508,000       1,374,000

        PROPERTY AND EQUIPMENT, NET                            506,000         544,000
        INTANGIBLES AND GOODWILL                             7,902,000       9,699,000
                                                          ------------    ------------
                                                          $  9,916,000    $ 11,617,000
                                                          ============    ============

 LIABILITIES AND SHAREHOLDERS' EQUITY
        CURRENT LIABILITIES
              Accounts payable, accrued expenses
                       and other liabilities              $  1,235,000    $  1,135,000
              Current portion of long-term debt              1,000,000         875,000
                                                          ------------    ------------
       Total current liabilities                             2,235,000       2,010,000

        LONG-TERM DEBT AND OTHER LIABILITIES                 2,250,000       9,784,000
        DEFERRED EMPLOYEE BENEFITS                             434,000         435,000

 SHAREHOLDERS' EQUITY
        Preferred Stock                                      9,717,000              --
        Common stock                                        12,826,000      12,810,000
        Additional paid-in capital                             875,000       2,517,000
        Accumulated deficit                                (18,421,000)    (15,939,000)
                                                          ------------    ------------
                                                             4,997,000        (612,000)
                                                          ------------    ------------
                                                          $  9,916,000    $ 11,617,000
                                                          ============    ============
</TABLE>


                                       2

<PAGE>   3


                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                  Three Months Ended December 31, 1998 and 1997


<TABLE>
<CAPTION>
                                                                 1998           1997
                                                             (unaudited)    (unaudited)
                                                             -----------    -----------
<S>                                                          <C>            <C>
 Sales                                                       $ 1,651,000    $ 1,521,000

 Cost of sales                                                   613,000        707,000
                                                             -----------    -----------

        Gross profit                                           1,038,000        772,000

 Selling, general and administrative expenses                    639,000        716,000

 Depreciation and amortization                                   320,000        261,000

 Interest expense, net of interest income                        607,000        335,000

 Write off deferred debt cost                                  1,211,000             --
                                                             -----------    -----------

      Loss from operations before benefit for income taxes    (1,739,000)      (498,000)

 Benefit for income taxes                                             --             --
                                                             -----------    -----------
      Net loss                                               $(1,739,000)   $  (498,000)
                                                             ===========    ===========

      Basic and diluted, net loss per share                  $     (0.09)   $     (0.03)
                                                             ===========    ===========
</TABLE>




                                       3
<PAGE>   4



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                   Six Months Ended December 31, 1998 and 1997

<TABLE>
<CAPTION>
                                                                 1998           1997
                                                             (unaudited)    (unaudited)
                                                             -----------    -----------
<S>                                                          <C>            <C>
 Sales                                                       $ 3,174,000    $ 3,081,000

 Cost of sales                                                 1,157,000      1,203,000
                                                             -----------    -----------

        Gross profit                                           2,017,000      1,878,000

 Selling, general and administrative expenses                  1,241,000      1,745,000

 Depreciation and amortization                                   633,000        487,000

 Interest expense, net of interest income                      1,414,000        692,000

 Write off deferred debt cost                                  1,211,000             --
                                                             -----------    -----------

      Loss from operations before benefit for income taxes    (2,482,000)    (1,046,000)

 Benefit for income taxes                                             --             --
                                                             -----------    -----------
      Net loss                                               $(2,482,000)   $(1,046,000)
                                                             ===========    ===========

      Basic and diluted, net loss per share                  $     (0.12)   $     (0.05)
                                                             ===========    ===========
</TABLE>


                                       4
<PAGE>   5



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                   Six Months Ended December 31, 1998 and 1997

<TABLE>
<CAPTION>
                                                                    1998           1997
                                                                (unaudited)    (unaudited)
                                                                -----------    -----------
<S>                                                             <C>            <C>
 Operating Activities
        Net loss                                                $(2,482,000)   $(1,046,000)
        Adjustments to reconcile net loss to net cash
           provided by (used in) operating activities:
         Depreciation and amortization                              878,000        659,000
         Write off of deferred debt cost                          1,211,000             --
         Warrant expense under Senior Subordinated Note
        Agreement                                                   598,000             --
         Interest converted to long-term debt                       360,000        358,000
         Issuance of common stock to settle lawsuit                  16,000         27,000
         Net changes in operating assets and liabilities           (439,000)      (377,000)
                                                                -----------    -----------
 Cash flows provided by (used in) operating activities              142,000       (379,000)

Investing Activities
        Net purchase of Advanced Tank Certification, Inc.                --     (2,190,000)
        Purchase of property and equipment                          (85,000)       (79,000)
                                                                -----------    -----------
 Cash flows used in investing activities:                           (85,000)    (2,269,000)

 Financing Activities
           Increase in deferred debt issuance cost                  (24,000)       (58,000)
           Repayments, net of borrowings                           (375,000)     2,719,000
                                                                -----------    -----------
 Cash flows (used in) provided by financing activities             (399,000)     2,661,000

 Change in cash                                                    (342,000)        13,000
 Cash and equivalents, beginning of period                          366,000        799,000
                                                                -----------    -----------
 Cash and equivalents, end of period                            $    24,000    $   812,000
                                                                ===========    ===========
</TABLE>




                                       5
<PAGE>   6



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements

1.      The interim financial information furnished herein has not been audited
        by independent accountants; however, in the opinion of management, all
        adjustments (only consisting of normal recurring accruals) necessary for
        a fair presentation of the results of operations for the six month and
        three month periods ending December 31, 1998 have been included.

2.      On May 22, 1997, the Company, then doing business as Watson General
        Corporation (Watson) completed the private placement of $7 million 10%
        Senior Subordinated Notes Due 2002 and 7,304,520 shares of its common
        stock (the Private Placement) with Sagaponack Partners, L.P., and
        Sagaponack International Partners, L.P. (the "Investors"). In connection
        with the valuation of the common stock issued in the transaction, an
        original issue discount of $1,000,000 was recorded. Approximately
        $17,000 of the discount is amortized into interest expense monthly
        during the 1998 fiscal year.

        Interest on the Senior Subordinated Notes is 10% per annum for the first
        year, payable quarterly, and increases by one percent each year during
        the term of the Notes. As of December 31, 1998 and December 31, 1997 the
        interest rate was 11% and 10%, respectively. At the option of the
        Company, interest payments due can be converted to debt under the same
        terms as the original principal. During the six month period ended
        December 31, 1998 and December 31, 1997, the Company converted interest
        due of $360,000 and $358,000, respectively to long term debt. In
        addition, if on the earlier of (i) the third anniversary of the date of
        the Securities Purchase Agreement or such other date thereafter
        designated by the Investors, (ii) the date of a stock offering or (iii)
        a sale of the Company (the "Adjustment Date"), the Company's cumulative
        adjusted earnings before taxes, depreciation and amortization ("EBTDA")
        fail to meet specific projections provided by the Company to the
        Investors, additional interest is payable in the form of warrants to the
        Investors. If the resulting actual percentage of EBTDA per share is less
        than 70% of the projected amount, an adjustment to interest expense is
        calculated and warrants are issued in an amount equal to the additional
        interest expenses divided by the fair market value of the common stock
        on the Adjustment Date. The adjusted interest rate cannot exceed 29.76%.
        Due to the lower than expected performance in fiscal 1998, the Company
        determined it was unlikely to meet these projections in the future.
        Accordingly, the Company has recorded interest expense on the Senior
        Subordinated Notes at a rate of 29.76% as of the beginning of the
        agreement and reflected the adjustment as a change in accounting
        estimate. Therefore, interest in the first quarter of 1998 is accrued at
        10% while interest for the second quarter of fiscal year 1999 through
        November 30 is recorded at 29.76%. The Company reflected additional
        interest as warrants to be issued.

        In December 1998, the Investors reached an agreement to convert all of
        the Private Placement and accrued interest totaling $9,717,000 to Series
        A Preferred Stock ("Preferred Stock") effective July 1, 1998. Warrants
        previously to be issued to the investors for additional interest expense
        were also canceled upon exchange of notes. The Preferred Stock will have
        an aggregate allocation amount (the "Allocation Amount") of $15,000,000
        for the purposes of liquidation priority and dividends. The Preferred
        Stock will bear an annual 8% cumulative dividend, if and when, declared
        by the Board of Directors. The Allocation Amount will increase by the
        amount of any dividends not declared for payment by the Company. The
        Preferred Stock has no mandatory redemption or voting rights and is not
        convertible into Common Stock. As a result of the conversion, the
        Company recorded an additional loss of $1,211,000 related to the write
        off of the deferred debt cost related to the Private Placement and
        converted the following balances to preferred stock:

<TABLE>
<S>                                                                                    <C> 
                     Long-term debt                                                      $7,000,000
                      Original issue discount                                              (700,000)
                      Accrued interest (including interest payable as warrants)           3,417,000
                                                                                         ----------
                             Total                                                       $9,717,000
                                                                                         ==========
</TABLE>



                                       6
<PAGE>   7

                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements


        2.  (continued)
        In February 1999, the Company filed a December 31, 1998 Form 10-Q which
        gave effect to this transaction as of July 1, 1998. However, because the
        agreement was not finalized until December 1998, this treatment was
        incorrect. Accordingly, this amended filing restates the preferred
        stock, interest expense and write-off of deferred debt costs to
        correctly reflect the date of the transaction.

        During the six months ended December 31, 1998, interest expense
        attributable to the Senior Subordinated Notes which was converted to
        equity (including warrants to be issued for additional interest expense)
        was $958,000 $.05 per share.

        On December 17, 1997, the Company obtained $3.75 million in financing
        from BankBoston and used the proceeds to, among other things, acquire
        all of the outstanding common stock of Advanced Tank Certification, Inc.
        (ATC), pursuant to stock purchase agreements between the Company and all
        of the shareholders of ATC. The ATC acquisition was accounted for using
        the purchase method.

    3.  Inventory consists of tank gauge equipment and is accounted for using 
        the weighted average method.

    4.  Included in interest expense on the Statements of Operations is
        amortization of deferred debt costs. These amounts are shown as
        depreciation and amortization on the Statements of Cash Flows.

    5.  Certain amounts for the prior period have been reclassified to conform
        to the current quarter presentation.

    6.  Due to the Company's loss position, diluted net loss per share is the
        same as basic earnings per share as the result would be antidilutive.


                                       7
<PAGE>   8



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

    RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 COMPARED
    TO THE THREE MONTHS ENDED DECEMBER 31, 1997

    In the second quarter of fiscal 1999 the Company reported a net loss of
    $1,739,000 as compared to a net loss of $498,000 for the corresponding
    quarter of the preceding year. This increase in loss is primarily
    attributable to the write off of deferred debt cost related to the Private
    Placement Notes (see Notes to the Financial Statements). The write off
    resulted in $1,211,000 of additional expense in the second fiscal quarter.
    Interest expense increased 81% to $607,000 from $335,000. This increase is a
    result of interest on the Private Placement Notes. Although the notes were
    converted to preferred stock this was not effective until December when all
    terms of the agreement were substantially agreed upon. Interest expense and
    debt discount amortization on the notes was recorded through November. Sales
    for the quarter were $1,651,000 compared with $1,521,000 in the prior year.
    Sales increased approximately 9% as the December 22 EPA deadline approached.
    These requirements require, among other things, some form of permanent
    monthly monitoring of underground storage tanks. In addition, additional
    customers were added while the Company maintained costs related to analyzing
    data. The Company has also achieved higher sales of its Extreme (TM) and
    SIRSend (TM) software and tank gauges. The software has a very high gross
    margin as there are few costs directly attributable to the installation and
    implementation. These factors resulted in a 63% gross margin, up from 51% in
    the prior year.

    Selling, general and administrative expenses decreased by 11% due to the
    reduction of expenses incurred in the prior year related to the merger of
    USTMAN Industries, Inc. and Watson General Corporation and the Advanced Tank
    Certification, Inc. acquisition. These expenses consisted primarily of fees
    for relocating offices, severance of terminated employees, exit costs,
    attorneys' fees, and accounting fees. All operations were integrated as of
    June 30, 1998 eliminating duplication of costs and resulting in more
    efficient operations. Management believes the selling, general and
    administrative expenses will continue throughout the fiscal year at the
    lower level.

    RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 COMPARED TO
    THE SIX MONTHS ENDED DECEMBER 31, 1997

    The Company reported a net loss of $2,482,000 or $0.12 per share as compared
    to a net loss of $1,046,000 or $0.05 per share for the corresponding period
    of the prior year. The write off of deferred debt cost related to the
    Private Placement in the amount of $1,211,000 in the second quarter of the
    fiscal year significantly contributed to the year to date loss. The Company
    wrote off certain intangible assets related to the Private Placement when
    the Investors agreed to convert the Private Placement Notes to Preferred
    Stock.

    Sales increased approximately 3% compared to prior year, this is a result of
    an increase in the customer base as the December 22 EPA deadline approached
    and increases in software and tank gauge sales. The increase in year to date
    sales is not as great as the quarterly results due primarily to the sale of
    Toxguard Fluid Technologies, Inc. ("Toxguard") which was divested as part of
    the Company's strategic plan in January 1998. The Company's strategic plan
    calls for it to reposition itself in pursuit of its most significant market
    opportunity, leak detection/monthly monitoring of underground storage tanks.
    The increase in customers and software and tank gauge sales in the second
    quarter exceeded the prior quarters decrease.

    General and administrative expenses decreased by 29%. This is a result of
    the elimination of expenses related to the merger of USTMAN Industries, Inc.
    and Watson General Corporation and the Advanced Tank Certification, Inc.
    acquisition. These expenses consisted primarily of fees for relocating
    offices, severance of terminated employees, exit costs, attorneys' fees, and
    accounting fees. All operations were integrated as of June 30, 1998
    eliminating duplication of costs and resulting in more efficient operations.


                                       8
<PAGE>   9

    FINANCIAL CONDITION AND LIQUIDITY

    At December 31, 1998 the Company's current liabilities exceeded current
    assets by $727,000 compared to $636,000 at June 30, 1998. This is a result
    of the current portion of long term debt on the BankBoston term loan. The
    Company's business does not require material ongoing capital expenditures.
    The Company's management believes that it has adequate resources for the
    next twelve months of operations.

    In December 1998, the Investors reached an agreement to convert all of the
    Private Placement and accrued interest totaling $9,717,000 to Series A
    Preferred Stock ("Preferred Stock") effective July 1, 1998. Warrants
    previously to be issued to the investors for additional interest expense
    were also canceled upon exchange of notes. The Preferred Stock will have an
    aggregate allocation amount (the "Allocation Amount") of $15,000,000 for the
    purposes of liquidation priority and dividends. The Preferred Stock will
    bear an annual 8% cumulative dividend, if and when, declared by the Board of
    Directors. The Allocation Amount will increase by the amount of any
    dividends not declared for payment by the Company. The Preferred Stock has
    no mandatory redemption or voting rights and is not convertible into Common
    Stock.

    Except for historical information contained herein, the statements in this
    report are forward-looking statements that are made pursuant to the safe
    harbor provisions of the Private Securities Litigation Reform Act of 1995.
    Forward-looking statements involve known and unknown risks and uncertainties
    which may cause the actual results in future periods to differ materially
    from forecasted results. These risks and uncertainties include, among other
    things, product demand, customers' strategies regarding the December 22,
    1998 EPA compliance requirements, and market competition.

    YEAR 2000 ASSESSMENT

    The following disclosure is made pursuant to the Year 2000 Information and
    Readiness Disclosure Act. The following disclosure originated from the
    Company and concerns (1) assessments, projections, or estimates of Year 2000
    processing capabilities; (2) plans, objectives or timetables for
    implementing or verifying Year 2000 processing capabilities; (3) test plans
    dates or results; and/or (4) reviews and comments concerning Year 2000
    processing capabilities as defined by the Act.

    The Company has assessed Year 2000 compliance matters and has determined
    that it has potential for exposure regarding Year 2000 compliance in three
    areas of its internal and external business activities. These areas include
    (1) its own internal hardware and software systems which are utilized to
    process and provide the Company's operations and accounting information, (2)
    the hardware and software systems it has provided to its clients for
    automation of the SIR process and (3) clients' hardware and software systems
    which are utilized to provide data to the Company. The following discusses
    management's assessment of those risks and the steps it is taking to
    minimize them.

    Internal hardware and software

    Over the last three years, the Company has purchased computers, servers and
    other equipment which are certified by the vendor as being Year 2000
    compliant. Because of this, the telephone system, servers and the majority
    of the Company's workstations are Year 2000 compliant. As of September 30,
    1998, the Company has gathered an inventory of current revisions needed on
    older workstations. Those computers which were not compliant will be
    thoroughly tested in the upcoming months and have the needed revisions by
    December 31, 1999.

    The Company's software consists primarily of three distinct areas: network
    operating system, commercial software and proprietary software. The network
    operating system has been certified by the vendor to be Year 2000 compliant
    subsequent to the completion of certain patches which the Company completed
    applying as of September 30, 1998. The commercial software the Company runs
    is very diverse. The Company has identified over thirty types of commercial
    software that are currently used both internally and externally. Over the
    next five months, the Company will contact the manufacturers to determine if
    the software is Year 2000 compliant. For those software packages which will
    not be Year 2000 compliant, the Company will make a determination to either
    replace the software with a different vendor or continue to use the software
    in a "quarantined" environment. Until responses from all vendors are
    received, it is not possible to estimate costs associated with the new
    software. However it is not anticipated that any new software other than
    that discussed below will be a material capital expenditure. All assessments
    required and the related determinations are expected to be made prior to
    June 30, 1999. The Company will contract for the replacement of its
    accounting and information computer software. One criterion in the selection
    of the new accounting software will be a warranty that the software is Year
    2000 compliant.

                                       9
<PAGE>   10



    Internal hardware and software (continued)

    Management is currently evaluating systems. It is estimated that the system
    will be installed and functional by August 1999. The cost of this system is
    expected to be approximately $50,000 including software, hardware and
    implementation expense. The Company runs internal software developed by the
    Company's software engineers. The Company does not believe that the software
    code will have to be rewritten or recompiled because most of the software is
    simply a front end to well known commercial software which has Year 2000
    compliance built into the core software.

    In order to ensure that all software and hardware will function properly in
    the Year 2000, the Company has planned to construct a separate testing
    facility. This facility will be dedicated entirely to Year 2000 testing on
    live customer data. This facility will have a server and other hardware to
    mirror the Company's. The Company plans to set the internal date at this
    facility to December 31, 1999 and run analysis for two months to verify that
    no Year 2000 issues occur as the clock approaches, reaches and passes the
    century mark. The equipment has been purchased for this facility and the
    facility is expected to be in use some time after March 1999.

    Hardware and software provided to customers

    Over the past couple of years, the Company has provided to its customers
    Extreme(TM), TankTrax(TM), and SIRSend(TM) software for use by its customers
    in providing data to the Company. The Company has tested and believes the
    Extreme(TM) software is Year 2000 compliant but the TankTrax(TM) and
    SIRSend(TM) software packages are not. The Company believes the TankTrax(TM)
    software can be corrected with few programming changes. The Company is
    currently evaluating the specific changes needed. The Company has obtained,
    but not applied, the programming revision needed for the SIRSend(TM)
    software. These revisions are expected to be complete by June 30, 1999.
    Because the Company's software engineers will do these revisions, the
    incremental cost to the Company is expected to be minimal.

    In addition to software the Company has furnished computer equipment to run
    the above-mentioned software and tank gauges. The Company believes all
    computer equipment sold to current customers is Year 2000 compliant. The
    Company has made provisions with customers so that the Company will not be
    responsible for any Year 2000 issues due to customers moving the proprietary
    software from the machine provided by the Company to other equipment without
    the signed consent of the Company. The Company has obtained a written
    warranty from the manufacturer of its tank gauge that the tank gauge is Year
    2000 compliant.

    Clients' hardware and software

    In order to assess the preparedness of its customers, the Company requested
    that its top two hundred customers complete a Year 2000 survey to determine
    the status of Year 2000 compliance of the customers' software and the data
    provided to the Company. The Company has received several responses and is
    currently evaluating the survey responses. The Company does not believe that
    any data received either electronically or in hard copy which is not Year
    2000 compliant will have a negative effect on the systems, but may affect
    services provided due to additional manual labor required to correct
    problems with the data. The Company will be working closely with its
    customers known to generate data from legacy equipment which is not Year
    2000 compliant to determine what the customers' own Year 2000 compliance
    program encompasses. The Company believes by working together with these
    customers potential problems will be avoided.

                                       10
<PAGE>   11



                          PART II -- OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)      Exhibits

        Exhibit Number               Description of Document
        --------------               -----------------------
             27.0                    Financial Data Schedule



                                   SIGNATURES

    In accordance with the requirements of the Exchange Act, the registrant
    caused this report to be signed on its behalf by the undersigned, thereunto
    duly authorized.

                                            USTMAN TECHNOLOGIES, INC.
                                                      (Registrant)




    Date:  4/9/99                                    By /s/ Dan R. Cook
                                                        -----------------------
                                                        Dan R. Cook
                                                        President and CEO


    Date:  4/9/99                                    By /s/ Heather Murphy
                                                        -----------------------
                                                        Heather Murphy
                                                        Controller

                                       11
<PAGE>   12
                                 EXHIBIT INDEX


Exhibit Number               Description of Document
--------------               -----------------------
     27.0                    Financial Data Schedule