<PAGE>   1
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 FORM 10-KSB/A

                   [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the Fiscal Year Ended March 31, 1998


                         Commission File Number: 0-25612


                              STARBASE CORPORATION
             (Exact name of Registrant as specified in its charter)

                Delaware                                        33-0567363
     (State or Other Jurisdiction of                         (I.R.S. Employer
     Incorporation or Organization)                       Identification Number)

      18872 MacArthur Boulevard
           Irvine, California                                      92612
(Address of principal executive offices)                        (Zip code)


                                 (714) 442-4400
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act:

                              Title of each class:
                              --------------------
                          Common Stock, $0.01 par value

Indicate by check mark whether the registrant has (1) 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) been subject to such filing requirements
for the past 90 days.

                               Yes [X]     No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The registrant's revenues for its most recent fiscal year: $2,139,000.

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of May 31, 1998, based on the closing price as reported by NASDAQ
was $ 37,611,000.

Number of shares outstanding as of May 31, 1998: Common Stock: 18,945,726

Documents Incorporated by Reference: None

================================================================================

<PAGE>   2

                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESTATEMENT OF PRIOR PERIOD RESULTS

The Company has restated its financial statements to conform with Topic No. D-60
of the Emerging Issues Task Force. Topic No. D-60 communicates the views of the
Securities and Exchange Commission staff that the beneficial conversion feature
of convertible preferred stock should be recognized. The amount of the
beneficial conversion feature is measured at the date of issue of the
convertible security as the difference between the conversion price and the
market value of the common stock into which the security is convertible,
multiplied by the number of shares into which the security is convertible. For
convertible preferred stock, this amount is accounted for as a non-cash
dividend, with the same amount credited to additional paid-in capital, allocated
over the period from issuance to first convertibility. Thus, there is no change
to total shareholders' equity.


                                       22

<PAGE>   3

In conformance with the provisions of Topic No. D-60, the Company has restated
its financial statements by recording non-cash preferred stock dividends
attributable to the issuance of Series A, B and C Preferred stock aggregating
$1,096,000, $2,763,000, $872,000, $862,000, $882,000 and $134,000 for the
quarters ended June 30, 1996, March 31, 1996, June 30, 1995, March 31, 1995,
December 31, 1994 and September 30, 1994, respectively.

In addition, the Company has restated the results of the first quarter of fiscal
1998 to recognize a non-cash dividend aggregating $1,660,000 as a result of
common stock issued in exchange for warrants to acquire shares of the Company's
common stock (Note 6 to the Financial Statements). This dividend represents the
excess of the fair value of the Company's common stock on the offer date over
the estimated fair value of the warrants exchanged. The estimated fair value of
the warrants was determined using the Black-Scholes method. This also did not
change overall shareholders' equity.

Also, at the time the Company was formed, it issued 1,418,638 common shares,
which are presently held in escrow. The shares may be released from the escrow
and delivered to individuals based upon the Company's achieving certain cash
flow requirements. If such cash flows are not attained by October 21, 2002 the
escrowed shares will be cancelled. Prior to March 1997, the escrowed shares were
included in the weighted average number of common shares used to report loss per
common share. Subsequently, the Company determined that it was not appropriate
to include the escrowed shares in the calculation of loss per common share
because such shares are considered contingent shares, and it has not been
considered probable that the requirements for release would be met.
Additionally, the escrowed shares would have an anti-dilutive effect.

The result of these changes, which did not change reported revenue and reported
net loss, is included in the following table:

(In Thousands of dollars, except per share data)

<TABLE>
<CAPTION>
                                                  Net Loss   Weighted
                                                 Applicable  Average   Loss Per               Additional
                                       Non-cash  To Common   Common     Common   Accumulated   Paid-In
   1998                      Net Loss  Dividend   Stock      Shares      Share     Deficit     Capital
   ----                     --------  --------  ---------  ---------   --------  -----------  ----------
   <S>                       <C>       <C>       <C>        <C>         <C>        <C>          <C>
   Quarter ended 12/31/97    (2,124)             (2,124)     14,448     (0.15)     (37,444)     37,472
   Quarter ended 9/30/97     (1,772)             (1,772)     13,629     (0.13)     (35,320)     36,020
   Quarter ended 6/30/97     (1,332)    1,660    (1,332)     12,002     (0.11)     (33,548)     35,057
   
   1997
   ----
   Year ended 3/31/97        (5,703)    1,096    (6,799)     10,938     (0.62)     (30,556)     33,414
   Quarter ended 12/31/96    (1,268)             (1,268)     11,791     (0.11)     (28,698)     33,270
   Quarter ended 9/30/96     (1,367)             (1,367)     11,296     (0.12)     (27,409)     33,240
   Quarter ended 6/30/96     (1,210)    1,096    (2,306)      8,796     (0.25)     (26,042)     32,603
   
   1996
   ----
   Year ended 3/31/96        (5,893)    3,635    (9,528)      5,825     (1.64)     (23,736)     23,698
   Quarter ended 12/31/95    (1,047)             (1,047)      6,404     (0.16)     (19,692)     16,765
   Quarter ended 9/30/95     (1,439)             (1,439)      6,308     (0.23)     (18,644)     16,765
   Quarter ended 6/30/95     (2,125)      872    (2,997)      4,174     (0.72)     (17,205)     16,462
   
   1995
   ----
   Year ended 3/31/95        (7,720)    1,878    (9,598)      3,625     (2.65)     (14,208)     12,799
   Quarter ended 12/31/94    (1,842)      882    (2,724)      3,675     (0.74)     (10,200)     10,675
   Quarter ended 9/30/94     (1,380)      134    (1,514)      3,571     (0.42)      (7,476)      8,555
</TABLE>


                                       23

<PAGE>   4

The following table summarizes data, before the changes (as previously
reported):

(In Thousands of dollars, except per share data)

<TABLE>
<CAPTION>
                                                    Net Loss   Weighted
                                                   Applicable  Average    Loss Per               Additional
                                         Non-cash  To Common   Common      Common   Accumulated   Paid-in
      1998                     Net Loss  Dividend    Stock     Shares      Share      Deficit     Capital
      ----                     --------  --------  ---------   ------     --------  -----------  ----------
      <S>                      <C>       <C>       <C>         <C>        <C>        <C>          <C>
      Quarter ended 12/31/97    (2,124)              (2,124)    14,448     (0.15)    (29,175)     29,203
      Quarter ended 9/30/97     (1,772)              (1,772)    13,629     (0.13)    (27,051)     27,751
      Quarter ended 6/30/97     (1,332)              (1,332)    12,002     (0.11)    (25,279)     26,788
      
      1997
      ----
      Year ended 3/31/97        (5,703)              (5,703)    10,938     (0.52)    (23,947)     26,805
      Quarter ended 12/31/96    (1,268)              (1,268)    11,791     (0.11)    (22,089)     26,661
      Quarter ended 9/30/96     (1,367)              (1,367)    11,296 *   (0.12)    (20,800)     26,631
      Quarter ended 6/30/96     (1,210)              (1,210)     8,796 *   (0.14)    (19,433)     25,994
      
      1996
      ----
      Year ended 3/31/96        (5,893)              (5,893)     5,825 *   (1.01)    (18,223)     18,185
      Quarter ended 12/31/95    (1,047)              (1,047)     7,823     (0.13)    (16,942)     14,015
      Quarter ended 9/30/95     (1,439)              (1,439)     7,727     (0.19)    (15,894)     14,015
      Quarter ended 6/30/95     (2,125)              (2,125)     5,593     (0.38)    (14,455)     13,712
      
      1995
      ----
      Year ended 3/31/95        (7,720)              (7,720)     5,044     (1.53)    (12,330)     10,921
      Quarter ended 12/31/94    (1,842)              (1,842)     5,094     (0.36)     (9,184)      9,659
      Quarter ended 9/30/94     (1,380)              (1,380)     4,990     (0.28)     (7,342)      8,421
</TABLE>

-------------
*  As previously reported and restated to exclude the Escrow Shares in 
   Form 10-KSB for the year ended March 31, 1997 and Forms 10-QSB for the year
   ended March 31, 1998.

RESULTS OF OPERATIONS

Year ended March 31, 1998 compared to 1997

Total revenue increased $1,100,000 or 106%, to $2,139,000, from $1,039,000 in
fiscal 1997. This increase was substantially due to increased product and
maintenance revenue from the StarTeam product line. StarTeam 2.1 was released in
April 1997 and StarTeam 3.0 was released in February 1998.

StarTeam is marketed primarily to technical professionals. In the typical sales
cycle, the product is purchased as a pilot test program, installed and evaluated
on a smaller scale (10-20 seats), and, if the evaluation is satisfactory,
implemented on larger projects or throughout the company, possibly involving up
to hundreds of users. The time span from an initial test order to implementation
throughout the customer's organization varies depending on the organization and
the level of standardization within the individual company, but in very large
companies, may take 6 months to a year. The Company has observed this scenario
with many of its existing customers and is now seeing a substantial increase in
revenues from these customers.

Gross profit increased 110% to $1,977,000 in fiscal 1998 from $943,000 in fiscal
1997, primarily due to the increased sales volume. Gross profit, as a percentage
of revenues, increased to 92% from 91% in fiscal 1998.

Cost of products consists primarily of manufacturing and related costs such as
media, documentation, product assembly and third party royalties. The Company
outsources manufacturing for all software products, except Roundtable.

Operating expenses increased by approximately $1,226,000 or 18% from fiscal
1997. This increase was substantially all due to increased labor costs necessary
to develop and market the new products.


                                       24

<PAGE>   5

The number of persons employed by the company at March 31, 1998 compared with
March 31, 1997:

      Department:                  1998       1997
      -----------                  ----       ----
      Research & Development        31         25
      Sales & Marketing             26         14
      Administration                 9          7
                                    --         --
         Total                      66         46
                                    ==         ==

      Part time employees are included in the count as one-half.

Research and development expenses

StarBase continues to make significant investments in research and development
intended to bring its products to market and to support existing products.
Research & development expenses increased $971,000 from the prior year. The
majority of the increase was due to increased compensation-related expenses due
to a higher average number of employees during fiscal 1998 as compared to fiscal
1997. In addition, costs increased for outside contractors engaged for special
programming and testing.

Selling, general and administrative expenses

For the year ended March 31, 1998, selling, general & administrative expenses
increased approximately $320,000 over the prior year. This was substantially all
due to increased compensation related expenses due to a higher average number of
employees during fiscal 1998 as compared to fiscal 1997.

Income Taxes

The Company incurred minimal income taxes in the last two fiscal years due to
its cumulative losses. The Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109") in fiscal 1994.
SFAS 109 requires that deferred taxes be calculated using an asset and liability
approach at currently enacted tax rates. As of March 31, 1998, the Company has
net operating loss ("NOL") carryforwards of approximately $30.1 million and
$15.4 million for federal and state income tax purposes. The NOLS are available
to offset future taxable income at varying amounts through the year 2019. At
March 31, 1998, a 100% valuation allowance has been provided on the net deferred
tax assets since the Company can not determine that such are "more likely than
not" to be realized.

Inflation

Management believes that inflation has not had a material impact on the
Company's results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Marketable Securities on hand as of year-end totaled $4.1 million in
fiscal 1998 and $2.7 million in fiscal 1997. At March 31, 1998 the Company had
working capital of $3.7 million, compared to $2.4 million at March 31, 1997.

Proceeds from the issuance of equity securities represent the primary source of
funds for meeting the Company's requirements for operations. During fiscal 1998,
the Company generated $5.0 million in cash from the sale of new Preferred Stock.
In addition, $3.1 million of capital was raised from the issue of Convertible
Debentures. The exercise of employee stock options added $0.2 million to
capital.

                                       25

<PAGE>   6

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 16th day of 
September, 1998.

                                                STARBASE CORPORATION


                                                By: /s/ Douglas S. Norman
                                                    ----------------------------
                                                        Douglas S. Norman
                                                        Director of Finance
                                                        Chief Accounting Officer











                                       58