<PAGE>   1


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

    [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

                                       OR

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


                 For the transition period from           To


                         Commission file number 0-288-42


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


            DELAWARE                                           84-1035353
 (State or other jurisdiction of                            (I.R.S. Employer 
  incorporation or organization)                           Identification No.)

 2425 55TH STREET, SUITE 100, BOULDER, COLORADO                   80301
    (address of principal executive offices)                    (Zip Code)

                                 (303) 544-2900
              (Registrant's telephone number, including area code)


     Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that 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 [ ]

     As of April 1, 1999, there were outstanding 9,291,770 shares of the
Registrant's Common Stock (par value $0.01 per share).

       Transitional Small Business Disclosure Format (check one):     

Yes [ ] No [X]


<PAGE>   2




                             SPATIAL TECHNOLOGY INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----   
<S>                                                                                                   <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets, December 31, 1998
              and March 31, 1999.....................................................................    3

         Condensed Consolidated Statements of Operations, three
              months ended March 31, 1998 and 1999...................................................    4

         Condensed Consolidated Statements of Cash Flows, three
              months ended March 31, 1998 and 1999...................................................    5

         Notes to Condensed Consolidated Financial Statements........................................    6

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.......    7

PART II.  OTHER INFORMATION..........................................................................   10 

Signatures...........................................................................................   11
</TABLE>







                                       2
<PAGE>   3




                             SPATIAL TECHNOLOGY INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      (Amounts in thousands, except shares)


<TABLE>
<CAPTION>
                                     ASSETS

                                                                                 December 31,      March 31,
                                                                                     1998            1999
                                                                                 ------------    ------------
                                                                                                  (Unaudited)
<S>                                                                              <C>             <C> 
Current Assets:
     Cash and cash equivalents ...............................................   $      4,534    $      3,519
     Accounts receivable, net of allowance of $100
         and $120 in 1998 and 1999 ...........................................          3,981           5,166
     Prepaid expenses and other ..............................................            542             617
                                                                                 ------------    ------------
         Total current assets ................................................          9,057           9,302
Equipment, net ...............................................................          1,392           1,402
Purchased computer software, net .............................................          1,140           1,214
                                                                                 ------------    ------------

                                                                                 $     11,589    $     11,918
                                                                                 ============    ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current maturities of long-term debt ....................................   $         10    $          7
     Accounts payable ........................................................            626             522
     Accrued expenses ........................................................          1,203           1,297
     Deferred revenue ........................................................          1,869           2,067
                                                                                 ------------    ------------
         Total current liabilities ...........................................          3,708           3,893
                                                                                 ------------    ------------

Long-term debt, less current maturities ......................................             79              79
                                                                                 ------------    ------------

Stockholders' Equity:
     Common stock, $.01 par value; 22,500,000 shares authorized; 9,239,791 and
         9,291,770 shares issued in 1998 and 1999, respectively...............             92              93
     Additional paid-in capital ..............................................         24,929          25,005
     Accumulated deficit .....................................................        (17,075)        (17,015)
     Other comprehensive loss ................................................           (144)           (137)
                                                                                 ------------    ------------
         Total stockholders' equity ..........................................          7,802           7,946
                                                                                 ------------    ------------

                                                                                 $     11,589    $     11,918
                                                                                 ============    ============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>   4




                             SPATIAL TECHNOLOGY INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                              March 31,
                                                                    ----------------------------
                                                                        1998            1999
                                                                    ------------    ------------
<S>                                                                 <C>             <C>         
Revenue:
     License fees ...............................................   $        936    $      1,670
     Royalties ..................................................          1,002           1,277
     Maintenance and other ......................................            954           1,104
                                                                    ------------    ------------
         Total revenue ..........................................          2,892           4,051
                                                                    ------------    ------------

Cost of sales:
     License fees ...............................................             74             120
     Royalties ..................................................              7            --
     Maintenance and other ......................................             75             104
                                                                    ------------    ------------
         Total cost of sales ....................................            156             224
                                                                    ------------    ------------

Gross profit ....................................................          2,736           3,827
                                                                    ------------    ------------

Operating expenses:
     Sales and marketing ........................................          1,241           1,433
     Research and development ...................................          1,210           1,766
     General and administrative .................................            434             475
                                                                    ------------    ------------
         Total operating expenses ...............................          2,885           3,674
                                                                    ------------    ------------

         Earnings (loss) from operations ........................           (149)            153

Other income (expense):
     Interest income ............................................             65              45
     Interest expense ...........................................             (2)             (2)
     Other, net .................................................             (1)           --
                                                                    ------------    ------------
         Total other income .....................................             62              43
                                                                    ------------    ------------

         Earnings (loss) before income taxes ....................            (87)            196

Income tax expense ..............................................            105             136
                                                                    ------------    ------------

         Net earnings (loss) ....................................   $       (192)   $         60
                                                                    ============    ============



Earnings (loss) per common share:
    Basic .......................................................   $      (0.02)   $       0.01
    Diluted .....................................................   $      (0.02)   $       0.01
Weighted average number of common shares outstanding:
    Basic .......................................................          9,163           9,274
    Diluted .....................................................          9,163           9,654
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                       4
<PAGE>   5

                             SPATIAL TECHNOLOGY INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                                             March 31,
                                                                    ----------------------------
                                                                        1998            1999
                                                                    ------------    ------------
<S>                                                                 <C>             <C>         
Cash flows from operating activities:
   Net earnings (loss) ..........................................   $       (192)   $         60
   Adjustments to reconcile net earnings (loss) to net cash
     used by operating activities:
     Depreciation and amortization ..............................            111             188
     Changes in operating assets and liabilities:
       Accounts receivable ......................................           (326)         (1,185)
       Prepaid expenses and other ...............................            (32)            (75)
       Accounts payable .........................................            212            (104)
       Accrued expenses .........................................           (445)             94
       Deferred revenue .........................................            279             198
                                                                    ------------    ------------
         Net cash used by operating activities ..................           (393)           (824)
                                                                    ------------    ------------

Cash flows from investing activities:
   Additions to purchased computer software .....................           --              (150)
   Additions to equipment .......................................           (111)           (122)
                                                                    ------------    ------------
         Net cash used by investing activities ..................           (111)           (272)
                                                                    ------------    ------------

Cash flows from financing activities:
   Principal payments on debt ...................................             (5)             (3)
   Proceeds from issuance of common stock .......................             70              77
                                                                    ------------    ------------
         Net cash provided by financing activities ..............             65              74
                                                                    ------------    ------------

Foreign currency translation adjustment affecting cash ..........             (3)              7
                                                                    ------------    ------------

         Net decrease in cash and cash equivalents ..............           (442)         (1,015)

Cash and cash equivalents at beginning of period ................          5,795           4,534
                                                                    ------------    ------------

Cash and cash equivalents at end of period ......................   $      5,353    $      3,519
                                                                    ============    ============


Supplemental disclosures:
   Cash paid for interest .......................................   $          5    $          2
                                                                    ============    ============

   Cash paid for income taxes ...................................   $        118    $         15
                                                                    ============    ============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                       5
<PAGE>   6




                             SPATIAL TECHNOLOGY INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                 March 31, 1999

A. FINANCIAL STATEMENT PRESENTATION

     The accompanying audited and unaudited condensed consolidated financial
statements of the Company have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
Company believes the disclosures included in the condensed consolidated
financial statements, when read in conjunction with the Company's consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-KSB for the year ended December 31, 1998, are adequate to make the
information presented not misleading.


B. EARNINGS (LOSS) PER SHARE

     Basic earnings (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted earnings per
share is computed on the basis of the weighted average number of common shares
outstanding plus the dilutive effect of potential common stock. For the quarter
ended March 31, 1998 diluted loss per share is the same as basic loss per share,
as the effect of potential common stock is antidilutive.

C.       ACCOUNTING PRONOUNCEMENTS

     Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities," (SFAS No. 133) was issued by the
FASB in June 1998. SFAS No. 133 establishes accounting and reporting standards
for derivative instruments and hedging activities and requires all derivatives
to be recognized as either assets or liabilities in the consolidated balance
sheet, measured at fair value. The corresponding change in fair value of the
derivative will be recorded in the earnings of the Company, net of related
change in fair value of the hedged item, or as a component of comprehensive
income depending upon the intended use and designation. The Company does not
anticipate the impact of adopting SFAS No. 133 will have a material effect on
the Company's consolidated financial statements.






                                       6
<PAGE>   7




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

     Except for the historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
presented here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this section and those
discussed in the Company's Form 10-KSB for the year ended December 31, 1998,
particularly those contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations".

RESULTS OF OPERATIONS

Revenue

     Total revenue for the quarter ended March 31, 1999 increased 40% to $4.1
million from $2.9 million reported for the quarter ended March 31, 1998,
reflecting an increase in all revenue categories. License fees increased 78% to
$1.7 million for the first quarter of 1999 from $936,000 reported in the first
quarter of 1998. Increased license fees in the first quarter of 1999 as compared
to the same prior year quarter is attributed to growth in new license contracts
in all sales geographies, the most significant occurring in the Company's
Japanese operations. By product line, the Company's interoperability solutions
products and deformable modeling technology contributed more than 50% of license
fees during the first quarter of 1999, whereas traditionally the majority of the
Company's license fees came from the ACIS(R) 3D toolkit, its principal product.
Royalties increased 27%, growing to $1.3 million for the first quarter of 1999
from $1.0 million reported for the same quarter in 1998. Increased royalties for
the quarter ended March 31, 1999 as compared to the same quarter in 1998
resulted from an increase in the number of the Company's customers shipping
ACIS(R) -enabled software applications. Maintenance and other revenue increased
16% to $1.1 million for the quarter ended March 31, 1999 as compared to $954,000
reported for the quarter ended March 31, 1998. Total recurring revenue, which is
comprised of royalty revenue and maintenance fees, increased 18% from the prior
year period and represented 52% of total revenue during the first quarter of
1999.
     Geographically, international revenue increased 79% for the quarter ended
March 31, 1999 and represented 48% of total revenue as compared to 38% for the
quarter ended March 31, 1998. Increased international revenue for the quarter
ended March 31, 1999 reflects an increase in the value of license contracts in
Japan.

Cost of Sales

     Cost of sales consists of support costs, royalty payments by the Company to
third party developers, manufacturing costs (primarily media duplication,
manuals, and shipping) and amortization of purchased computer software. Total
cost of sales increased 44% to $224,000 for the quarter ended March 31, 1999
from $156,000 reported in the comparable prior year period. The increase in
total cost of sales primarily reflects increased amortization of purchased
computer software and manufacturing costs. Increased amortization of purchased
computer software in the quarter ended March 31, 1999 reflects amortization of
technology purchased in 1998. Increased manufacturing costs are a direct result
of the Company's release and shipment of ACIS(R) 5.0 in January 1999. As a
percent of total revenue, cost of sales increased to 6%, as compared to 5% for
the quarter ended March 31, 1998.

Operating Expenses

     Sales and marketing expense increased 15% to $1.4 million for the quarter
ended March 31, 1999 as compared to $1.2 million reported in the quarter ended
March 31, 1998. Increased sales and marketing expense for the first quarter of
1999 as compared to the first quarter of 1998 is due to increased commission
costs in support of revenue growth, as well as increased travel costs associated
with expanded sales activity in 1999 as compared to 1998. As a percent of total
revenue, sales and marketing expense



                                       7
<PAGE>   8

decreased to 35% for the quarter ended March 31, 1999 as compared to 43% for the
comparable prior year period.

     Research and development expense increased 46% to $1.8 million for the
quarter ended March 31, 1999 from $1.2 million reported in the same prior year
quarter. Increased research and development expense is due to increased staffing
in support of increased development efforts for the Company's component product
line, as well as for new product offerings developed as part of the Company's
interoperability strategy, including the ACIS(R) IGES translator husk, the
ACIS(R) STEP translator husk and the ACIS(R) VDA-FS translator husk. As a
percent of total revenue, research and development expense increased slightly to
44% for the quarter ended March 31, 1999 from 42% for the comparable prior year
quarter. The Company accounts for research and development expense in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 86, under which
the Company is required to capitalize software development costs after
technological feasibility is established. Capitalizable software development
costs incurred to date have not been significant; therefore, the Company has
expensed all of these costs in the periods incurred.

     General and administrative expense increased 9% to $475,000 for the quarter
ended March 31, 1999 as compared to $434,000 reported for the same prior year
quarter. Increased general and administrative expense is primarily due to
increased professional fees in the quarter ended March 31, 1999 as compared to
the quarter ended March 31, 1998. As a percent of total revenue, general and
administrative expense decreased to 12% for the first quarter of 1999 from 15%
for the first quarter of 1998.

Other Income (Expense), net

     Other income decreased $19,000 to $43,000 for the quarter ended March 31,
1999 as compared to $62,000 reported for the quarter ended March 31, 1998.
Decreased other income reflects lower interest income, as a result of lower cash
balances and a decrease in the interest rate in 1999 as compared to 1998.

Income Tax Expense

     Income tax expense increased $31,000 to $136,000 for the fiscal quarter
ended March 31, 1999 from $105,000 reported for the same quarter in 1998 due
primarily to increased withholding tax as a result of increased sales in Japan.

FLUCTUATIONS IN QUARTERLY RESULTS

     The Company has experienced in the past and expects to continue to
experience in the future significant fluctuations in quarterly operating results
due to a number of factors that are difficult to forecast, including, among
others, the volume of orders received within a quarter, demand for the Company's
products, the product mix purchased by the Company's customers, competing
capital budget considerations of the Company's customers, introduction and
enhancement of products by the Company and its competitors, market acceptance of
new products, reviews in the industry press concerning the products of the
Company or its competitors, changes or anticipated changes in pricing by the
Company or its competitors and general economic conditions. Due to the foregoing
factors, it is possible that the Company's operating results for some future
quarters may fall below the expectations of securities analysts and investors.

OUR SYSTEMS AND THOSE OF OUR CUSTOMERS MAY NOT BE YEAR 2000 COMPLIANT

         Many currently installed computer systems and software products accept
only two digit entries in the date code field. These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, by the end of this year computer systems and/or software
used by many companies may need to be upgraded to comply with such "Year 2000"
requirements.



                                       8
<PAGE>   9

         We have evaluated Year 2000 compliance issues and believe that such
issues will not materially adversely impact our products and internal management
information systems. Our software products do not incorporate date-sensitive
algorithms. Any date codes contained in our software do not affect the
functionality of our products. We also incorporate third party software with
ACIS 3D, our core product. We have concluded that any date codes contained in
such third party software will not materially adversely impact our products.

         In addition, we have evaluated our management information systems and
have concluded that they are Year 2000 compliant. Moreover, we manage a low
number of transactions because we depend on low volume, high value orders. As a
result, we believe that any date-sensitive material contained in our software
would not materially adversely affect our management information systems
software. However, to the extent that any of our foregoing assessments are
incorrect, the cost of updating the performance of software might materially
adversely affect our business, financial condition and results of operations.

     Moreover, Year 2000 compliance issues affecting our customers' products and
internal management information systems might have a material adverse effect on
our business, financial condition and results of operations. Our customers' Year
2000 compliance is beyond our control. As an OEM provider, our products may be
incorporated directly into customers' products. Any Year 2000 issues affecting
our customers might, therefore, also affect our sales.

INTERNATIONAL EXPANSION

     The Company believes that international sales will continue to represent a
significant portion of its total revenue, and that it will be subject to the
inherent risks of conducting business internationally. Such risks include, but
are not limited to, problems and delays in collecting accounts receivable,
fluctuations in currency exchange rates and other uncertainties relative to
regional economic circumstances. Sales of products by the Company currently are
denominated principally in U.S. dollars. Accordingly, any increase in the value
of the U.S. dollar as compared to currencies in the Company's principal overseas
markets would increase the foreign currency-denominated cost of the Company's
products, which may negatively affect the Company's sales in those markets, or
could delay collection of current or future accounts receivables. The Company
has not engaged in any currency exchange hedging practices. As of March 31,
1999, the Company believes it has adequately reserved for risks associated with
foreign currency transactions. However, there can be no assurance that one or
more of such factors will not have a material adverse effect on the Company's
business, operating results and financial condition.

LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 1999, the Company had $3.5 million in cash and cash
equivalents. Cash and cash equivalents decreased $1 million for the three months
ended March 31, 1999, as compared to $442,000 for the comparable prior year
period.

     Net cash used by operating activities was $824,000 for the three month
period ended March 31, 1999 as compared to $393,000 for the three month period
ended March 31, 1998. Net cash used by operations in 1999 was primarily the
result of increased accounts receivable, partially offset by increased deferred
revenue as well as non-cash operating items. Cash used by operations in the
period ended March 31, 1998 was primarily due to decreased accrued expenses and
increased accounts receivable.

     Net cash used by investing activities totaling $272,000 for the quarter
ended March 31, 1999 results from $122,000 used for equipment purchases and
$150,000 used for purchased computer software. Cash used for the comparable
period in 1998 totaling $111,000 reflects equipment purchases.

     Net cash provided by financing activities was $74,000 for the three months
ended March 31, 1999, due to proceeds in connection with the Company's employee
stock purchase plan and the issuance of common stock in conjunction with the
exercise of stock options.



                                       9
<PAGE>   10

     The Company has a revolving line of credit with a bank providing for
maximum borrowings of $1,500,000. The line of credit bears interest at the
bank's prime rate and matures in August of 1999. As of March 31, 1999, the
Company had no borrowings under this line of credit.

     The Company believes cash generated from operations, together with existing
cash, will be sufficient to meet the Company's operating and capital
requirements for the foreseeable future including at least the next twelve
months.


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings:

         None

Item 2.  Changes in Securities:

         None

Item 3.  Defaults on Senior Securities:

         Not Applicable

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

         None

Item 5.  Other Information:

         None

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

         a)   Exhibits

              27 - Financial Data Schedule

         b)   Reports on Form 8-K

              None




                                       10
<PAGE>   11






                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





                                       SPATIAL TECHNOLOGY INC.



Date May 14, 1999                      /s/ R. Bruce Morgan
                                       ---------------------------------------
                                       R. Bruce Morgan
                                       President, Chief Executive Officer, and
                                       Director (Principal Executive and
                                       Financial Officer)

                                       /s/ Todd S. Londa
                                       ---------------------------------------
                                       Todd S. Londa
                                       Vice President, Administration and 
                                       Corporate Controller
                                       (Principal Accounting Officer)






                                       11
<PAGE>   12



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

     EXHIBIT
     NO.            DESCRIPTION
     -------        -----------
<S>                 <C>
       27           Financial Data Schedule
</TABLE>