<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 June 30, 1999

                                       OR

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


             For the transition period from            To


                         Commission file number 0-288-42


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


<TABLE>

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

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

                                 (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 July 1, 1999, there were outstanding 9,388,701 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 June 30, 1999......................................................................   3

         Condensed Consolidated Statements of Operations, three and six
              months ended June 30, 1998 and 1999....................................................   4

         Condensed Consolidated Statements of Cash Flows, six
              months ended June 30, 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..........................................................................  12

Signatures...........................................................................................  14
</TABLE>


                                       2
<PAGE>   3

                             SPATIAL TECHNOLOGY INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                          (In thousands, except shares)


<TABLE>
<CAPTION>
                                     ASSETS

                                                                                December 31,        June 30,
                                                                                    1998              1999
                                                                                ------------      ------------
                                                                                                   (Unaudited)
<S>                                                                             <C>               <C>

Current Assets:
     Cash and cash equivalents.............................................     $      4,534      $      4,032
     Accounts receivable, net of allowance of $100 and $149 in 1998 and
         1999, respectively................................................            3,981             4,121
     Prepaid expenses and other............................................              542               495
                                                                                ------------      ------------
         Total current assets..............................................            9,057             8,648
Equipment, net.............................................................            1,392             1,436
Purchased computer software, net...........................................            1,140             1,665
                                                                                ------------      ------------

                                                                                $     11,589      $     11,749
                                                                                ============      ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current maturities of long-term debt..................................     $         10      $        --
     Accounts payable......................................................              626               351
     Accrued expenses......................................................            1,203             1,806
     Deferred revenue......................................................            1,869             1,911
                                                                                ------------      ------------
         Total current liabilities.........................................            3,708             4,068
                                                                                ------------      ------------

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

Stockholders' Equity:
     Common stock, $.01 par value; 22,500,000 shares authorized;
         9,239,791 and 9,388,701 shares issued in 1998 and 1999,
         respectively......................................................               92                94
     Additional paid-in capital............................................           24,929            25,342
     Accumulated deficit...................................................          (17,075)          (17,620)
     Other comprehensive loss..............................................             (144)             (135)
                                                                                ------------      ------------
         Total stockholders' equity........................................            7,802             7,681
                                                                                ------------      ------------

                                                                                $     11,589      $     11,749
                                                                                ============      ============
</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            Six Months Ended
                                                                   June 30,                     June 30,
                                                           ------------------------     ------------------------

                                                             1998           1999          1998           1999
                                                           ---------     ----------     ---------     ----------
<S>                                                        <C>           <C>            <C>           <C>
Revenue:
   License fees......................................      $   1,759     $    1,286     $   2,695     $    2,956
   Royalties.........................................            932          1,082         1,934          2,359
   Services..........................................            972          1,235         1,926          2,339
                                                           ---------     ----------     ---------     ----------
         Total revenue...............................          3,663          3,603         6,555          7,654
                                                           ---------     ----------     ---------     ----------

Cost of sales:
   License fees......................................             85            163           159            283
   Royalties.........................................              4              9            11              9
   Services..........................................             62            139           137            243
                                                           ---------     ----------     ---------     ----------
         Total cost of sales.........................            151            311           307            535
                                                           ---------     ----------     ---------     ----------

Gross profit.........................................          3,512          3,292         6,248          7,119
                                                           ---------     ----------     ---------     ----------

Operating expenses:
   Sales and marketing...............................          1,242          1,242         2,483          2,675
   Research and development..........................          1,376          1,664         2,586          3,430
   General and administrative........................            594            491         1,028            966
   Acquired in-process research and development......             --            500            --            500
                                                           ---------     ----------     ---------     ----------
         Total operating expenses....................          3,212          3,897         6,097          7,571
                                                           ---------     ----------     ---------     ----------

         Earnings (loss) from operations.............            300          (605)           151          (452)

Other income (expense)
   Interest income...................................             64             43           129             88
   Interest expense..................................            (6)            (3)           (8)            (5)
   Other, net........................................            (2)            (1)           (3)            (1)
                                                           ---------     ----------     ---------     ----------
         Total other income (expense)................             56             39           118             82
                                                           ---------     ----------     ---------     ----------

         Earnings (loss) before income taxes.........            356          (566)           269          (370)

Income tax expense...................................            112             39           217            175
                                                           ---------     ----------     ---------     ----------

         Net earnings (loss).........................      $     244     $     (605)    $       52    $     (545)
                                                           =========     ==========     ==========    ==========


Earnings (loss) per common share
     Basic...........................................      $    0.03     $    (0.07)    $     0.01    $    (0.06)
     Diluted.........................................      $    0.03     $    (0.07)    $     0.01    $    (0.06)

Weighted average number of shares outstanding
     Basic...........................................          9,183          9,294          9,173         9,284
     Diluted.........................................          9,277          9,294          9,274         9,284
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>   5

                             SPATIAL TECHNOLOGY INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                           Six Months Ended
                                                                                                June 30,
                                                                                     -----------------------------
                                                                                       1998                 1999
                                                                                     ---------            --------
<S>                                                                                  <C>                  <C>

Cash flows from operating activities:
   Net earnings (loss)..........................................................     $      52            $   (545)
   Adjustments to reconcile net earnings (loss) to net cash provided (used)
     by operating activities excluding affects of business combination:
     Depreciation and amortization.........................................                236                 361
     Acquired in-process research and development..........................                 --                 500
     Changes in operating assets and liabilities:
       Accounts receivable.................................................               (860)               (140)
       Prepaid expenses and other..........................................                (11)                 (9)
       Accounts payable....................................................                 82                (275)
       Accrued expenses....................................................               (131)                489
       Deferred revenue....................................................                236                  42
                                                                                     ---------            --------
         Net cash provided (used) by operating activities..................               (396)                423
                                                                                     ---------            --------

Cash flows from investing activities:
   Additions to equipment..................................................               (193)               (272)
   Additions to purchased computer software................................               (101)               (650)
                                                                                     ---------            --------
         Net cash used by investing activities.............................               (294)               (922)
                                                                                     ---------            --------

Cash flows from financing activities:
   Principal payments on debt..............................................                (14)                (89)
   Proceeds from issuance of stock.........................................                 83                  77
                                                                                     ---------            --------
         Net cash provided (used) by financing activities..................                 69                 (12)
                                                                                     ---------            --------

Foreign currency translation adjustment affecting cash.....................                (12)                  9
                                                                                     ---------            --------

         Net decrease in cash and cash equivalents.........................               (633)               (502)

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

Cash and cash equivalents at end of period.................................          $   5,162            $  4,032
                                                                                     =========            ========

Supplemental disclosures:
   Cash paid for interest..................................................          $      13            $      5
                                                                                     =========            ========

   Cash paid for income taxes..............................................          $     121            $     77
                                                                                     =========            ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6

                             SPATIAL TECHNOLOGY INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  June 30, 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 three
and six month periods ended June 30, 1999, diluted loss per share is the same as
basic loss per share, as the effect of potential common stock is antidilutive.
The effect of potential common stock for the three and six month periods ended
June 30, 1998 is not significant.


C.   ACQUISITION

     In June 1999 the Company acquired certain assets and liabilities of Sven
Technologies, Inc. ("Sven") for total consideration of $1.0 million, including
$500,000 cash and 96,931 shares of common stock. In addition, the Company issued
an additional 96,930 shares of common stock (the "Earnout Shares") and a warrant
to purchase 250,000 shares of common stock at an exercise price of $12.50 per
share (the "Warrant"). Pursuant to the purchase agreement, the Earnout Shares
and Warrant are being held in escrow, and will be released to Sven upon
attainment of certain performance objectives. The purchase price was allocated
to the assets acquired based on their estimated fair values, including $500,000
of purchased computer software and $500,000 of in-process research and
development projects. The purchased computer software will be amortized over
seven years. The Company charged the in-process research and development to
operations at the date of acquisition as such technology had not reached
technological feasibility and had no probable alternative future use by the
Company.


                                       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 June 30, 1999 decreased 2% to $3.6
million from $3.7 million reported for the quarter ended June 30, 1998. License
fees decreased 27% to $1.3 million for the second quarter of 1999 from $1.8
million reported in the second quarter of 1998. The decrease in license fees for
the quarter ended June 30, 1999 as compared to the comparable prior year quarter
was attributable to a decrease in the number of new contracts executed for the
Company's component product line, as well as a decrease in the number of orders
for the Company's viewing products. Royalties increased 16% to $1.1 million for
the second quarter of 1999 versus $932,000 reported for the same quarter in
1998. Increased royalties for the quarter ended June 30, 1999 as compared to the
same quarter in 1998 resulted from an increase in the number of customers
shipping ACIS(R)-enabled software applications, as well as increased
non-refundable prepaid royalties. Service revenue, derived from the sale of
maintenance contracts and the performance of training and consulting services,
increased 27% to $1.2 million for the quarter ended June 30, 1999 as compared to
$972,000 reported for the quarter ended June 30, 1998. The increase in service
revenue resulted from the growth in the Company's installed customer base and
increased training and consulting services performed for these customers.

     For the six month period ended June 30, 1999 total revenue increased 17% to
$7.7 million as compared to $6.6 million reported for the same six month period
in 1998, resulting from increases in all three revenue categories. License fees
increased 10% to $3.0 million in the six month period ended June 30, 1999 as
compared to $2.7 million reported for the comparable prior year period. The
increase in license fees was primarily attributable to an increase in new
license contracts in Japan in 1999 as compared to 1998. Royalties increased 22%
to $2.4 million for the six month period ended June 30, 1999 as compared to $1.9
million reported for the six month period ended June 30, 1998. Increased
royalties for 1999 as compared to 1998 resulted from an increase in the number
of the Company's customers shipping ACIS(R)-enabled software applications as
well as increased non-refundable prepaid royalties. Service revenue increased
21% to $2.3 million for the six month period ended June 30, 1999 as compared to
$1.9 million reported for the comparable period in 1998, reflecting growth in
the Company's installed customer base and increased services performed for these
customers.

     Geographically, international revenue decreased 4% for the quarter ended
June 30, 1999 and represented 48% of revenue as compared to 46% for the quarter
ended June 30, 1998. Decreased international revenue for the second quarter of
1999 reflects a decrease in the number of license contracts in Europe. Domestic
revenue decreased 6% for the quarter ended June 30, 1999 as compared to the same
prior year quarter. For the six month period ended June 30, 1999 international
revenue increased 33% and represented 48% of total revenue as compared to 42%
for the comparable prior year period. The increase in the ratio of international
revenue for this six month period is attributable to the growth in new license
contracts in Japan. Domestic revenue increased 5% for the six month period ended
June 30, 1999 as compared to the same prior year period.


                                       7
<PAGE>   8

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 106% to $311,000 for the quarter ended June 30, 1999
from $151,000 reported for the quarter ended June 30, 1998. For the six month
period ended June 30, 1999 cost of sales increased 74% to $535,000 from $307,000
reported in the comparable prior year period. The increase in cost of sales for
all periods presented was primarily due to increased royalty expenses to third
party developers associated with certain component software translation tools,
in addition to increased staffing costs associated with the Company's customer
support efforts. As a percent of total revenue, cost of sales increased to 9%
and 7% for the three and six months ended June 30, 1999, respectively, as
compared to 4% and 5% for the comparable periods in 1998, respectively.

Operating Expenses

     Sales and marketing expense remained flat at $1.2 million for the quarters
ended June 30, 1999 and 1998. For the six month period ended June 30, 1999 sales
and marketing expense increased 8% to $2.7 million from $2.5 million reported
for the six month period ended June 30, 1998. Increased sales and marketing
expense in 1999 as compared to 1998 is due to increased commissions and travel
related costs associated with increased revenue and expanded sales activities.
As a percent of total revenue, sales and marketing expense increased slightly to
35% for the second quarter of 1999 as compared to 34% for the second quarter of
1998. For the six month period ended June 30, 1999 sales and marketing expense
decreased as a percent of total revenue to 35% versus 38% for the same prior
year period.

     Research and development expense increased 21% to $1.7 million for the
quarter ended June 30, 1999 from $1.4 million reported in the same prior year
quarter. For the six month period ended June 30, 1999 research and development
expense increased 33% to $3.4 million from $2.6 million reported in the
comparable prior year period. Increased research and development expense was 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 and internet based services
strategies, including the ACIS(R) Step and Pro-E translator husks and the 3D
Modelserver. As a percent of total revenue, research and development expense
increased to 46% and 45% for the three and six month periods ended June 30,
1999, respectively, from 38% and 39% for the comparable prior year periods,
respectively. 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 decreased 17% to $491,000 for the
quarter ended June 30, 1999 from $594,000 reported for the same quarter in 1998.
For the six month period ended June 30, 1999 general and administrative expense
decreased 6% to $966,000 from $1.0 million reported for the comparable prior
year period. Decreased general and administrative expense was primarily due to a
decrease in variable compensation and travel related expenses in 1999 as
compared to 1998. As a percent of total revenue, general and administrative
expense decreased to 14% and 13% for the three and six month periods ended June
30, 1999, respectively, as compared to 16% for the comparable prior year
periods, respectively.

Acquired In-process Research and Development

     Acquired in-process research and development expense of $500,000 in the
quarter ended June 30, 1999 relates to the acquisition of certain assets and
liabilities of Sven. Specifically included in this expense were amounts
allocated to three separate projects which had not reached technological
feasibility and had no probable alternative future uses (See Note C of Notes to
Condensed Consolidated Financial Statements.) At the acquisition date each of
these three projects were evaluated and it was determined that they were between
20% and 30% complete. The projects identified include development of two
software components that would be sold as add-on extensions ("Husks") to the
Company's ACIS 3D Toolkit and


                                       8
<PAGE>   9

viewing product line, which are referred to as the Level of Detail Husk and
Large Model Viewing Husk, respectively. The third project involves integration
of the purchased technology, as well as the software components noted above,
with products and internet based services the Company anticipates will be
released in the second half of 1999. Taking into consideration the percentage of
completion, the fair values of the Level of Detail Husk, Large Model Viewing
Husk, and integration project were determined to be $130,000, $210,000 and
$160,000, respectively. The method used to determine the fair values was a
discounted cash flow model, that assumed a 3-5 year period of cash inflow and a
22.5% risk adjusted discount rate. The conclusion to expense the fair values of
the identified projects at the date of acquisition was based on the Company's
evaluation of the nature, timing and status of these projects. The Company,
having substantial experience with the design, development and marketing of
technical software products, concluded that the identified projects are
complex, and the related technology is unique with respect to the computer
engineering market segment in which it operates. Accordingly, the Company
believes there are significant risks associated with completing development of
the identified projects, and that failure to deliver the related products and
services, and to do so according to an established schedule, may have an
adverse affect on the Company's ability to execute current business strategies.

Other Income (Expense), net

     Other income decreased to $39,000 for the second quarter of 1999 as
compared to $56,000 reported for the second quarter of 1998 and to $82,000 for
the six month period ended June 30, 1999 from $118,000 for the comparable prior
year period. Decreased other income for all periods presented reflect 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 decreased to $39,000 for the quarter ended June 30, 1999
as compared to $112,000 reported for the same quarter in 1998. For the six month
period ended June 30, 1999 income tax expense decreased to $175,000 from
$217,000 for the same period in 1998. Decreased income tax expense in 1999 as
compared to 1998 is primarily due to income tax expenses incurred in the first
half of 1998 of approximately $99,000 related to earnings by InterData Access,
Inc. ("IDA"), whereas no such expense was incurred during the first half of
1999. In December 1998 the Company acquired all of the outstanding common stock
of IDA, and accounted for the merger as a pooling of interest. Accordingly, the
Company's net operating loss carry forwards were not available to offset IDA's
taxable income for 1998. The remaining amount expensed in 1998, as well as the
1999 expense, includes an income tax liability for the Company's Japanese
subsidiary in addition to withholding taxes on foreign sales.

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.

LIQUIDITY AND CAPITAL RESOURCES

     As of June 30, 1999, the Company had $4.0 million in cash and cash
equivalents. Cash and cash equivalents decreased $502,000 for the six months
ended June 30, 1999, as compared to $633,000 for the comparable prior year
period.


                                       9
<PAGE>   10

     Net cash provided by operating activities was $423,000 for the six month
period ended June 30, 1999 as compared to net cash used by operations of
$396,000 for the six month period ended June 30, 1998. Net cash provided by
operations in 1999 was primarily the result of increased accrued liabilities
associated with cash payments to be made by the Company to Sven in the third and
fourth quarters of 1999 in connection with the Sven acquisition, partially
offset by increased accounts receivable and decreased accounts payable. Cash
used by operations in the six month period ended June 30, 1998 was primarily due
to an increase in accounts receivable, partially offset by increased deferred
revenue.

     Net cash used by investing activities totaling $922,000 for the six month
period ended June 30, 1999 reflects $272,000 used for equipment purchases and
$650,000 used for purchased computer software, including $500,000 in connection
with the Sven acquisition. Cash used by investing activities during the first
half of 1998 includes $193,000 for equipment purchases and $101,000 for
purchased computer software.

     Net cash used by financing activities was $12,000 for the six months ended
June 30, 1999, reflecting cash used for principal payments on debt partially
offset by proceeds from the issuance of common stock in connection with the
exercise of employee stock options. Net cash provided by financing activities in
the six month period ended June 30, 1998 was $69,000 reflecting the issuance of
stock in connection with the Company's employee stock purchase plan, partially
offset by principal payments on debt.

     The Company believes that 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.

NEW 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.

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.

     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.


                                       10
<PAGE>   11

     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 June 30, 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.


                                       11
<PAGE>   12

                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings:

          None

Item 2.   Changes in Securities:

          On June 29, 1999, we sold 193,861 shares of Common Stock and warrants
to purchase 250,000 shares of Common Stock in partial consideration for certain
of the assets of Sven Technologies, Inc. to one accredited investor. The
issuance of the shares was exempt from registration pursuant to Rule 506 under
the Securities Act of 1933.

Item 3.   Defaults on Senior Securities:

          Not Applicable

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

          The Annual Meeting of the Company's Stockholders was held on May 6,
1999 in Boulder, Colorado for the following purposes:

(a)  To elect directors to serve for the ensuing year and until their successors
     are elected and qualified. The following votes were cast by the Company's
     stockholders with respect to each director:

<TABLE>
<CAPTION>
        Director              Shares Voted For       Shares Voted Withheld
        --------              ----------------       ---------------------
<S>                           <C>                    <C>
     Richard M. Sowar            7,763,825                  76,750
     R. Bruce Morgan             7,763,825                  76,750
     Philip E. Barak             7,763,325                  75,250
     H. Robert Gill              7,763,325                  75,250
     M. Thomas Hull              7,763,325                  75,250
     Fred F. Nazem               7,763,325                  75,250
</TABLE>

The foregoing votes resulted in the adoption of such proposal.

(b)  To approve amendments to the Company's 1996 Equity Incentive Plan to
     increase the aggregate number of shares of Common Stock authorized
     thereunder from 1,125,000 to 1,350,000. The following votes were cast by
     the Company's stockholders with respect to the amendment to the Equity
     Incentive Plan:

<TABLE>
<CAPTION>
     Shares Voted For   Shares Voted Against   Shares Voted Withheld   Abstentions   Broker Non-Votes
     ----------------   --------------------   ---------------------   -----------   ----------------
<S>                     <C>                    <C>                     <C>           <C>
        7,688,586             118,725                    0               33,264             0
</TABLE>

The foregoing votes resulted in the adoption of such proposal.

(c)  To approve an amendment to the Company's Employee Stock Purchase Plan to
     increase the aggregate number of shares of Common Stock authorized for
     issuance thereunder from 175,000 to 300,000. The following votes were cast
     by the Company's stockholders with respect to the amendment to the Employee
     Stock Purchase Plan.

<TABLE>
<CAPTION>
     Shares Voted For   Shares Voted Against   Shares Voted Withheld   Abstentions   Broker Non-Votes
     ----------------   --------------------   ---------------------   -----------   ----------------
<S>                     <C>                    <C>                     <C>           <C>
        7,765,300              56,250                    0               19,025             0
</TABLE>

The foregoing votes resulted in the adoption of such proposal.

(d)  To ratify the selection of KPMG LLP as the Company's independent auditors
     for the fiscal year ending December 31, 1999. The following votes were cast
     by the Company's stockholders with respect to the ratification of the
     Company's auditors:

<TABLE>
<CAPTION>
     Shares Voted For   Shares Voted Against   Shares Voted Withheld   Abstentions   Broker Non-Votes
     ----------------   --------------------   ---------------------   -----------   ----------------
<S>                     <C>                    <C>                     <C>           <C>
        7,791,225              41,250                     0               8,100             0
</TABLE>

The foregoing votes resulted in the adoption of such proposal.


                                       12
<PAGE>   13

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

               A report on Form 8-K was filed with the Securities and Exchange
Commission on July 14, 1999 in connection with the acquisition of Sven pursuant
to the terms of the Purchase Agreement (Exhibit 10.35), between the Company and
Sven, dated as of June 29, 1999. In accordance with the terms of the Purchase
Agreement, the Company acquired certain assets and liabilities of Sven in
consideration for $500,000 cash and the issuance of 96,931 shares of the
Company's Common Stock ("Company Shares"). In addition, the Company issued an
additional 96,930 shares of common stock (the "Earnout Shares") and a warrant to
purchase 250,000 shares of common stock at an exercise price of $12.50 per share
(the "Warrant"). Pursuant to the purchase agreement, the Earnout Shares and
Warrant are being held in escrow, and will be released to Sven upon attainment
of certain performance objectives.


                                       13
<PAGE>   14

                                   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 August 16, 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)


                                       14
<PAGE>   15

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
NUMBER          DESCRIPTION
-------         -----------
<S>             <C>

  27            Financial Data Schedule
</TABLE>