<PAGE>   1



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


                                   Form 10-QSB


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


                  For the quarterly period ended March 31, 1999
                                                 --------------

                         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
May 4, 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>
                                                                                        March
                                                                                       31,1999           June 30,
                                                                                     (unaudited)           1998
                                                                                     ------------      ------------
<S>                                                                                  <C>               <C> 
ASSETS
        CURRENT ASSETS
              Cash and equivalents                                                   $    195,000      $    366,000
              Accounts receivable                                                       1,280,000           826,000
              Inventory                                                                   121,000           112,000
              Prepaid expenses and other current assets                                   190,000            70,000
                                                                                     ------------      ------------
                                                                                        1,786,000         1,374,000

        PROPERTY AND EQUIPMENT                                                            497,000           544,000
        INTANGIBLES AND GOODWILL                                                        7,667,000         9,699,000
                                                                                     ============      ============
                                                                                     $  9,950,000      $ 11,617,000
                                                                                     ============      ============

 LIABILITIES AND SHAREHOLDERS' EQUITY
        CURRENT LIABILITIES
              Accounts payable, accrued expenses
                       and other liabilities                                         $  1,277,000      $  1,135,000
              Current portion of long-term debt                                         1,250,000           875,000
                                                                                     ------------      ------------
                                                                                        2,527,000         2,010,000

        LONG-TERM DEBT AND OTHER LIABILITIES                                            2,000,000         9,784,000
        DEFERRED EMPLOYEE BENEFITS                                                        433,000           435,000

 SHAREHOLDERS' EQUITY
        Preferred stock, no par value: Authorized shares- 1,000,000, Issued and
        outstanding- 9,717 shares at March 31, 1999 and none at June 30, 1998 
        Liquidation preference before payment to holders of common stock of
        $15,900,000 at March 31, 1999                                                   9,717,000              --
        Common stock, no par value:  Authorized shares-40,000,000, Issued and
        outstanding-19,879,243 at March 31, 1999 and 19,855,243 at June 30, 1998       12,826,000        12,810,000
        Additional paid-in capital                                                        875,000         2,517,000
        Accumulated deficit                                                           (18,428,000)      (15,939,000)
                                                                                     ------------      ------------
                                                                                        4,990,000          (612,000)

                                                                                     ------------      ------------
                                                                                     $  9,950,000      $ 11,617,000
                                                                                     ============      ============
</TABLE>



                                       2
<PAGE>   3


                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                   Three Months Ended March 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                             1999             1998
                                                          (unaudited)      (unaudited)
                                                          -----------      -----------
<S>                                                       <C>              <C>
 Sales                                                    $ 1,637,000      $ 1,597,000

 Cost of sales                                                565,000          517,000
                                                          -----------      -----------

        Gross profit                                        1,072,000        1,080,000

 Selling, general and administrative expenses                 658,000          930,000

 Depreciation and amortization                                318,000          321,000

 Compensation expense to third parties                           --            222,000

 Gain on sale of Toxguard Fluid Technologies, Inc.               --             28,000

 Interest expense, net of interest income                     103,000          427,000
                                                          -----------      -----------

 Loss from operations before benefit for income taxes          (7,000)        (792,000)

 Benefit for income taxes                                        --               --

                                                          -----------      -----------
 Net loss                                                 $    (7,000)     $  (792,000)
                                                          ===========      ===========

 Basic and diluted net loss per share                     $     (0.00)     $     (0.04)
                                                          ===========      ===========
</TABLE>



                                       3
<PAGE>   4




                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                    Nine Months Ended March 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                            1999             1998
                                                         (unaudited)      (unaudited)
                                                         -----------      -----------
<S>                                                      <C>              <C>
Sales                                                    $ 4,811,000      $ 4,302,000

Cost of sales                                              1,722,000        1,478,000
                                                         -----------      -----------

       Gross profit                                        3,089,000        2,824,000

Selling, general and administrative expenses               1,899,000        2,549,000

Depreciation and amortization                                951,000          786,000

Compensation expense to third parties                           --            222,000

Gain on sale of Toxguard Fluid Technologies, Inc.               --             28,000

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

Interest expense, net of interest income                   1,517,000        1,118,000
                                                         -----------      -----------

Loss from operations before benefit for income taxes      (2,489,000)      (1,823,000)

Benefit for income taxes                                        --               --
                                                         -----------      -----------

Net loss                                                 $(2,489,000)     $(1,823,000)
                                                         ===========      ===========

Basic and diluted net loss per share                     $      (.13)     $      (.09)
                                                         ===========      ===========
</TABLE>



                                       4
<PAGE>   5



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                    Nine Months Ended March 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                     1999             1998
                                                                  (unaudited)      (unaudited)
                                                                  -----------      -----------
<S>                                                               <C>              <C>
Operating Activities
        Net loss                                                  $(2,489,000)     $(1,823,000)
        Adjustments to reconcile net loss to net cash
           provided by (used in) operating activities:
        Depreciation and amortization                               1,194,000        1,301,000
        Warrants to be issued under Senior Subordinated Note
        Agreement                                                     598,000             --
        Write off deferred debt cost                                1,211,000             --
        Interest converted to long term debt                          360,000             --
        Issuance of common stock and stock options                       --            249,000
        Issuance of common stock to settle lawsuits                    16,000             --
        Net changes in operating assets and liabilities              (526,000)         (40,000)
                                                                  -----------      -----------
Cash flows provided by (used in) operating activities                 364,000         (313,000)

Investing Activities
        Purchase of Advanced Tank Certification, Inc.                    --         (2,190,000)
        Sale of Toxguard Fluid Technologies, Inc.                        --             28,000
        Purchase of property and equipment                           (136,000)        (164,000)
                                                                  -----------      -----------
Cash flows used in investing activities:                             (136,000)      (2,326,000)

Financing Activities
           Deferred debt issuance cost                                (24,000)         (74,000)
           Repayments, net of borrowings                             (375,000)       2,432,000
                                                                  -----------      -----------
Cash flows (used in) provided by financing activities:               (399,000)       2,358,000

Decrease in cash                                                     (171,000)        (281,000)
Cash, beginning of period                                             366,000          799,000
                                                                  -----------      -----------
Cash, end of period                                               $   195,000      $   518,000
                                                                  ===========      ===========
</TABLE>



                                       5
<PAGE>   6



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

1.      The 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 three and nine
        month periods ending March 31, 1999 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
        through November 1998.

        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"). Warrants previously to be issued
        to the investors for additional interest expense were also canceled upon
        exchange of notes. The Preferred Stock has 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. At March 31, 1999 the
        allocation amount was $15,900,000 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>
<CAPTION>
                    <S>                                                            <C>
                    Long-term debt                                                 $ 7,000,000
                    Original issue discount                                          (700,000)
                    Accrued interest (including interest as warrants)                3,417,000
                                                                                   ----------- 
                               Total                                               $ 9,717,000
                                                                                   ===========
</TABLE>


        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. In March 1999, the Company and BankBoston agreed to
        amend the terms of the agreement and reduce the covenant requirements
        for the upcoming quarters beginning on March 31, 1999.

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

4.      Included in interest expense on the Statement of Operation is
        amortization of deferred debt costs. These amounts are included in
        depreciation and amortization on the Statement of Cash Flows.

                                       6
<PAGE>   7



                            USTMAN TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements



5.      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.

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


                                       7
<PAGE>   8





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

        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, and
        market competition.

        RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 COMPARED
        TO THE THREE MONTHS ENDED MARCH 31, 1998

        Sales for the quarter were $1,637,000 compared with $1,597,000 in the
        prior year. Sales increased approximately 3% as a result of the December
        22, 1998 EPA deadline which requires, among other things, monthly leak
        detection and additional revenue related to British Petroleum ("BP").
        Although sales increased, gross profit decreased slightly. This decrease
        is a result of increases in tank gauge sales which are at a lower gross
        profit than statistical inventory reconciliation ("SIR") sales.
        Additionally, the Company has incurred costs in expanding foreign
        operations into Australia and New Zealand. Management expects these
        costs to decrease as the Company continues to streamline the process.
        The Company's sales of its Extreme(TM) software decreased during the
        third quarter of fiscal year 1999. The software has a high gross margin
        as there are few costs directly attributable to the installation and
        implementation. Sales of this product decreased in the three months
        ended March 31, 1999 as a result of decreased priority on installations.
        The Company decreased installations in order to ensure proper customer
        satisfaction during the period of high volume of tank additions as a
        result of the EPA deadline. Now that additions have stabilized,
        management anticipates increases of software sales in the upcoming
        quarter as sales efforts will again be focused on these products and
        installations will be scheduled.

        In the third quarter of fiscal 1999 the Company reported a net loss of
        $7,000 as compared to a net loss of $792,000 for the corresponding
        quarter of the preceding year. This decrease in loss is primarily
        attributable to a decrease in selling, general and administrative
        expenses, compensation expense to third parties, and interest expense.

        Selling, general and administrative expenses decreased by 29% primarily
        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 acquisition of Advanced Tank Certification, Inc. 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.
        Additionally, the Company has decreased advertising costs, legal fees
        not related to SEC filings and management payroll.

        During 1997, the Company issued warrants for 200,000 shares exercisable
        at $1.50 per share through March 1998. In March 1998, these options were
        modified to extend the exercise period through March 16, 1999 and to
        increase the exercise price to $1.75. As a result, the Company
        recognized expense of $222,000 representing the fair market value of
        these options at the time of the modification.

        In December 1998, the Investors reached an agreement to convert the
        Private Placement and accrued interest totaling $9,717,000 to Series A
        Preferred Stock ("Preferred Stock") effective July 1, 1998. Interest
        expense, including deferred debt cost and original issue discount
        amortization, decreased 76% as a result of the conversion.


                                       8
<PAGE>   9


        RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1999 COMPARED
        TO THE SIX MONTHS ENDED MARCH 31, 1998

        Sales increased approximately 12% compared to the prior year, as a
        result of an increase in the customer base as the December 22 EPA
        deadline approached, increases in software and tank gauge sales and the
        addition of BP. Although sales have increased, gross profit has
        decreased slightly. This decrease is a result of increases in tank gauge
        sales which are at a lower gross profit than SIR. Gross profits on tank
        gauges has also decreased as a result of rising equipment costs.
        Additionally, the Company has incurred costs in expanding foreign
        operations into Australia and New Zealand. Management expects these
        costs to decrease as the Company continues to streamline the process.

        General and administrative expenses decreased by 26%. This is primarily
        a result of the elimination of expenses related to the merger of USTMAN
        Industries, Inc. and Watson General Corporation, and the acquisition of
        Advanced Tank Certification, Inc. 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. In addition, advertising and
        legal expenses not related to SEC filings have decreased.

        The Company reported a net loss of $2,489,000 or $0.13 per share as
        compared to a net loss of $1,823,000 or $0.09 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 deferred debt cost related to the
        Private Placement when the Investors agreed to convert the Private
        Placement Notes to Preferred Stock.


        FINANCIAL CONDITION AND LIQUIDITY

        At March 31, 1999 the Company's current liabilities exceeded current
        assets by $741,000 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"). 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. At March 31, 1999 the
        allocation amount was $15,900,000. The Preferred Stock has no mandatory
        redemption or voting rights and is not convertible into Common Stock.


                                       9
<PAGE>   10





        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 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. 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.

                                       10
<PAGE>   11

        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. In addition, the Company is planning on
        having software engineers on site immediately after the December 31,
        1999 to avoid any unforeseen problems.

        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 has evaluated and identified 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
        responses and based on the representations of these customers, does not
        believe there will be significant Year 2000 problems. 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.

                                       11
<PAGE>   12



                          PART II -- OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

        Exhibit 27                   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:  5/14/99                         By /s/ Dan R. Cook
                                          ---------------------- 
                                          Dan R. Cook
                                          President and CEO




Date:  5/14/99                         By /s/ Heather Murphy
                                          ---------------------- 
                                          Heather Murphy
                                          Controller

                                       12

<PAGE>   13
                                 EXHIBIT INDEX

EXHIBIT NO.                       DESCRIPTION
-----------                       -----------

    27                     Financial Data Schedule