UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ____________________

                                    FORM 10-Q

(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, 2006

                                       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 0-21874

                           Berkeley Technology Limited

             (Exact name of registrant as specified in its charter)
                             ______________________


     Jersey, Channel Islands                           Not applicable
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                          Minden House, 6 Minden Place
                           St. Helier, Jersey JE2 4WQ
                                 Channel Islands
                    (Address of principal executive offices)
                                   (Zip Code)

                              011 44 (1534) 607700
              (Registrant's telephone number, including area code)


     Indicate  by check mark  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 ___

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes ____ No |X|

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes ____ No |X|

     As of May 12, 2006,  the  registrant had  outstanding  64,439,073  Ordinary
Shares, par value $0.05 per share.
<PAGE>


                                TABLE OF CONTENTS


                                     PART I

                              FINANCIAL INFORMATION


<TABLE>
<CAPTION>
                                                                                                             Page
Item 1.    Financial Statements:

<S>                                                                                                           <C>
           Unaudited Condensed Consolidated Balance Sheets as of March 31, 2006 and
               December 31, 2005............................................................................    3

           Unaudited Condensed Consolidated Statements of Operations for the three months
               ended March 31, 2006 and 2005................................................................    4

           Unaudited Condensed Consolidated Statements of Cash Flows for the three months
               ended March 31, 2006 and 2005................................................................    5

           Unaudited Consolidated Statement of Changes in Shareholders' Equity for the three months
               ended March 31, 2006.........................................................................    6

           Unaudited Consolidated Statements of Comprehensive Income for the three months
               ended March 31, 2006 and 2005................................................................    7

           Notes to Unaudited Condensed Consolidated Financial Statements...................................    8

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations............   18

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.......................................   25

Item 4.    Controls and Procedures..........................................................................   26


                                     PART II

                                OTHER INFORMATION

Item 1.    Legal Proceedings................................................................................   27

Item 1A.   Risk Factors.....................................................................................   27

Item 6.    Exhibits.........................................................................................   28

Signature  .................................................................................................   29

Exhibit Index...............................................................................................   30
</TABLE>

                                       2
<PAGE>







                         PART I - FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                                       March 31,    December 31,
                                                                                          2006            2005
                                                                                     ------------   ------------
                                            ASSETS

Investments (principally of life insurance subsidiary):
   Fixed maturities:
     Available-for-sale, at fair value (amortized cost: $16,320 and $13,809
<S>                                                                                  <C>            <C>
       as of March 31, 2006 and December 31, 2005, respectively)..................   $     16,316   $     13,829
     Held-to-maturity, at amortized cost (fair value: $3,018 and $6,982
       as of March 31, 2006 and December 31, 2005, respectively)..................          3,033          7,011
   Equity securities:
     Trading, at fair value (cost: $102 as of March 31, 2006
       and December 31, 2005).....................................................            140             84
     Available-for-sale, at estimated fair value (cost: $850 as of
       March 31, 2006 and December 31, 2005)......................................            850            850
                                                                                     ------------   ------------
Total investments.................................................................         20,339(1)      21,774

Cash and cash equivalents.........................................................          8,216(1)      10,039
Cash held in escrow...............................................................          1,036          1,027
Accrued investment income.........................................................            699            609
Other assets......................................................................            396            354
                                                                                     ------------   ------------
Total assets......................................................................   $     30,686   $     33,803
                                                                                     ------------   ------------
                                                                                     ------------   ------------

                        LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Life insurance policy liabilities.................................................   $     11,141   $     13,573
Accounts payable and accruals.....................................................            658            627
                                                                                     ------------   ------------
Total liabilities.................................................................         11,799         14,200
                                                                                     ------------   ------------
Commitments and contingencies (see Note 6)

Shareholders' equity:
Ordinary shares, $0.05 par value per share: 86,400,000 shares authorized;
   64,439,073 shares issued and outstanding as of March 31, 2006 and
   December 31, 2005..............................................................          3,222          3,222
Additional paid-in capital........................................................         67,692         67,660
Retained earnings.................................................................         10,956         11,682
Employee benefit trusts, at cost (13,522,381 shares
   as of March 31, 2006 and December 31, 2005)....................................        (62,598)       (62,598)
Accumulated other comprehensive loss..............................................           (385)          (363)
                                                                                     ------------   ------------
Total shareholders' equity........................................................         18,887         19,603
                                                                                     ------------   ------------
Total liabilities and shareholders' equity........................................   $     30,686   $     33,803
                                                                                     ------------   ------------
                                                                                     ------------   ------------
<FN>
(1) Includes  $17,160 of investments  and $4,343 of cash and cash  equivalents in the Company's  insurance  subsidiary
    (London Pacific Assurance  Limited  ("LPAL"))  which are not currently  available to fund the operations or commitments
    of the Company or its other subsidiaries.
</FN>
</TABLE>
 See accompanying Notes which are an integral part of these Unaudited Condensed
                       Consolidated Financial Statements.



                                       3
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                                 March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   -------------


Revenues:
<S>                                                                                  <C>            <C>
Investment income.................................................................   $        354   $        397
Insurance policy charges..........................................................              -              -
Consulting and other fee income...................................................            154            143
Net realized investment losses....................................................              -            (43)
Change in net unrealized investment gains and losses on trading securities........             57            (22)
                                                                                     ------------   ------------
                                                                                              565            475
Expenses:
Amounts credited on insurance policyholder accounts...............................            170            290
Operating expenses................................................................          1,116          1,339
                                                                                     ------------   ------------
                                                                                            1,286          1,629
                                                                                     ------------   ------------
Loss before income tax expense....................................................           (721)        (1,154)

Income tax expense................................................................              5              5
                                                                                     ------------   ------------
Net loss..........................................................................   $       (726)  $     (1,159)
                                                                                     ------------   ------------
                                                                                     ------------   ------------

Basic and diluted loss per share and ADS:

Basic and diluted loss per share..................................................   $      (0.01)  $      (0.02)
                                                                                     ------------   ------------
                                                                                     ------------   ------------

Basic and diluted loss per ADS....................................................   $      (0.14)  $      (0.23)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>



 See accompanying Notes which are an integral part of these Unaudited Condensed
                       Consolidated Financial Statements.

                                       4
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------

<S>                                                                                  <C>            <C>
Net cash used in operating activities.............................................   $       (592)  $       (171)


Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities...........................         (3,035)        (8,510)
Purchases of available-for-sale fixed maturity securities.........................         (9,082)        (5,122)
Proceeds from maturity of held-to-maturity fixed maturity securities..............          7,000            200
Proceeds from sale and maturity of available-for-sale fixed maturity securities...          6,575          1,911
                                                                                     ------------   ------------
Net cash provided by (used in) investing activities...............................          1,458        (11,521)
                                                                                     ------------   ------------

Cash flows from financing activities:
Insurance policyholder benefits paid..............................................         (2,710)        (1,309)
Proceeds from disposal of shares by the employee benefit trusts...................              -             18
                                                                                     ------------   ------------
Net cash used in financing activities.............................................         (2,710)        (1,291)
                                                                                     ------------   ------------

Net decrease in cash and cash equivalents.........................................         (1,844)       (12,983)
Cash and cash equivalents at beginning of period (1)..............................         10,039         19,495
Foreign currency translation adjustment...........................................             21            (14)
                                                                                     ------------   ------------
Cash and cash equivalents at end of period (1), (2)...............................   $      8,216   $      6,498
                                                                                     ------------   ------------
                                                                                     ------------   ------------

<FN>
(1) Does not include $1,036 of cash held in escrow as of March 31, 2006.

(2) The amount for March 31, 2006 includes  $4,343 in the Company's  insurance  subsidiary  (LPAL) which is not
    currently  available to fund the operations or commitments of the Company or its other subsidiaries.
</FN>
</TABLE>

 See accompanying Notes which are an integral part of these Unaudited Condensed
                       Consolidated Financial Statements.

                                       5
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

       UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                            Accumulated
                                                                                               Other
                                   Ordinary Shares    Additional                Employee      Compre-        Total
                                --------------------    Paid-in    Retained      Benefit      hensive     Shareholders'
                                   Number    Amount     Capital    Earnings      Trusts        Loss          Equity
                                ----------  --------   ---------   ---------   ----------   -----------   -----------
Balance as of
<S>                             <C>         <C>        <C>         <C>         <C>          <C>           <C>
   December 31, 2005............   64,439   $  3,222   $  67,660   $  11,682   $  (62,598)  $      (363)  $    19,603

Net loss........................         -         -           -        (726)           -             -          (726)
Vesting of employee share
   options, including income
   tax effect...................         -         -          32           -            -             -            32
Change in net unrealized
   gains and losses on
   available-for-sale securities         -         -           -           -            -           (24)          (24)
Foreign currency translation
   adjustment...................         -         -           -           -            -             2             2

                                ----------  --------   ---------   ---------   ----------   -----------   -----------
Balance as of
   March 31, 2006...............    64,439  $  3,222   $  67,692   $  10,956   $  (62,598)  $      (385)  $    18,887
                                ----------  --------   ---------   ---------   ----------   -----------   -----------
                                ----------  --------   ---------   ---------   ----------   -----------   -----------

</TABLE>


 See accompanying Notes which are an integral part of these Unaudited Condensed
                       Consolidated Financial Statements.


                                       6
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

            UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------

<S>                                                                                  <C>            <C>
Net loss..........................................................................   $       (726)  $     (1,159)

Other comprehensive loss, net of deferred income taxes:

Foreign currency translation adjustments, net of income taxes of $0...............              2             (9)

Change in net unrealized gains and losses:
   Unrealized holding gains and losses on available-for-sale securities...........            (38)           (88)
   Reclassification adjustment for gains and losses included in net loss..........             14             (2)
   Deferred income taxes..........................................................              -              -
                                                                                     ------------   ------------
Other comprehensive loss..........................................................            (22)           (99)
                                                                                     ------------   ------------
Comprehensive loss................................................................   $       (748)  $     (1,258)
                                                                                     ------------   ------------
                                                                                     ------------   ------------

</TABLE>
 See accompanying Notes which are an integral part of these Unaudited Condensed
                       Consolidated Financial Statements.


                                       7
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006

     As used herein,  the terms  "registrant,"  "Company,"  "we," "us" and "our"
refer to Berkeley Technology Limited.  Except as the context otherwise requires,
the term "Group" refers collectively to the registrant and its subsidiaries.


Note 1.   Basis of Presentation and Principles of Consolidation

     The accompanying  condensed consolidated financial statements are unaudited
and have been prepared by the Company in conformity with United States generally
accepted  accounting   principles  ("U.S.   GAAP").  These  unaudited  condensed
consolidated  financial  statements  include the  accounts of the  Company,  its
subsidiaries,  the Employee  Share Option Trust  ("ESOT") and the Agent  Loyalty
Opportunity Trust ("ALOT").  Significant subsidiaries included in the operations
of the Group and discussed in this document  include  London  Pacific  Assurance
Limited ("LPAL") and Berkeley  International Capital Corporation  ("BICC").  All
intercompany transactions and balances have been eliminated in consolidation.

     Certain information and note disclosures normally included in the Company's
annual consolidated  financial statements have been condensed or omitted. In the
opinion of management, the unaudited condensed consolidated financial statements
reflect all  adjustments  (consisting of normal  recurring  accruals)  which are
necessary for a fair statement of the results for the interim periods presented.

     While the Company's management believes that the disclosures  presented are
adequate to make the  information  not  misleading,  these  unaudited  condensed
consolidated financial statements should be read in conjunction with the audited
financial  statements  and related  notes for the year ended  December 31, 2005,
which are contained in the Company's  Annual Report on Form 10-K, filed with the
U.S.  Securities and Exchange Commission ("SEC") on March 30, 2006. The December
31,  2005  condensed  balance  sheet data was  derived  from  audited  financial
statements but does not include all disclosures required by U.S. GAAP.

     The  results  for the three  month  period  ended  March  31,  2006 are not
indicative of the results to be expected for the full fiscal year.

     The unaudited  condensed  consolidated  balance  sheets are presented in an
unclassified  format as the  majority of the Group's  assets  relate to its life
insurance and annuities business.  The Group's other business is venture capital
and consulting.

     The Company is incorporated under the laws of Jersey,  Channel Islands. Its
Ordinary  Shares are traded on the London Stock  Exchange and in the U.S. on the
Over-the-Counter  Bulletin  Board  in the  form of  American  Depositary  Shares
("ADSs"), which are evidenced by American Depositary Receipts ("ADRs"). Pursuant
to the  regulations  of the SEC,  the  Company  is  considered  a U.S.  domestic
registrant and must file financial statements prepared under U.S. GAAP.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with U.S.  GAAP
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities as of the date of these unaudited condensed  consolidated  financial
statements as well as the reported  amount of revenues and expenses  during this
reporting  period.  Actual  results could differ from these  estimates.  Certain
estimates such as fair value and actuarial assumptions have a significant impact
on the  gains  and  losses  recorded  on  investments  and the  balance  of life
insurance policy liabilities.

                                       8
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Share Based Compensation

Equity compensation plan

     The London Pacific Group 1990 Employee Share Option Trust  ("ESOT"),  which
was approved by shareholders in 1990, provides for the granting of share options
to employees and directors. Options are generally granted with an exercise price
equal to the fair market  value of the  underlying  shares at the date of grant.
Such  grants  to  employees  are  generally  exercisable  in four  equal  annual
installments  beginning  one year from the date of grant,  subject to employment
continuation,  and expire seven to ten years from the date of grant. Such grants
to directors are fully vested on the date of grant and expire seven or ten years
from the date of grant.

Share based compensation expense

     On January 1, 2006, the Company adopted  Statement of Financial  Accounting
Standards No. 123 (revised 2004) ("SFAS  123R"),  "Share-Based  Payment,"  which
establishes  standards  for the  accounting of  transactions  in which an entity
exchanges its equity  instruments for goods or services,  primarily  focusing on
accounting for transactions  where an entity obtains employee  services in share
based  payment  transactions.  SFAS 123R requires a public entity to measure the
cost  of  employee  services  received  in  exchange  for  an  award  of  equity
instruments,  including  share options,  based on the fair value of the award on
the grant date, and to recognize it as compensation  expense over the period the
employee is required to provide  service in exchange for the award,  usually the
vesting period.  SFAS 123R supersedes the Company's  previous  accounting  under
Accounting  Principles  Board Opinion No. 25 ("APB 25"),  "Accounting  for Stock
Issued to  Employees,"  and related  interpretations,  for periods  beginning in
fiscal 2006.  In March 2005,  the SEC issued Staff  Accounting  Bulletin No. 107
("SAB 107") relating to SFAS 123R. The Company has applied the provisions of SAB
107 in its adoption of SFAS 123R.

     The Company  adopted  SFAS 123R using the modified  prospective  transition
method,  which requires the application of the accounting standard as of January
1,  2006,  the  first day of the  Company's  fiscal  year  2006.  The  Company's
consolidated financial statements as of and for the three months ended March 31,
2006  reflect  the  impact  of  SFAS  123R.  In  accordance  with  the  modified
prospective  transition method, the Company's  consolidated financial statements
for prior  periods have not been  restated to reflect,  and do not include,  the
impact of SFAS 123R.

     SFAS 123R  requires  companies  to  estimate  the fair value of share based
payment awards on the date of grant using an option pricing model.  The value of
the portion of the award that is  ultimately  expected to vest is  recognized as
expense  over  the  requisite  service  periods  in the  Company's  consolidated
statement  of  operations.  Prior to the  adoption  of SFAS  123R,  the  Company
accounted for share based awards to employees and directors  using the intrinsic
value method in accordance  with APB 25, as allowed under Statement of Financial
Accounting   Standards  No.  123  ("SFAS  123"),   "Accounting  for  Stock-Based
Compensation."  Under the intrinsic  value method,  no share based  compensation
expense  had  been  recognized  in  the  Company's   consolidated  statement  of
operations.

     Share based compensation  expense recognized in the Company's  consolidated
statement of  operations  for the first  quarter of 2006  includes  compensation
expense for share  options  granted  prior to, but not yet vested as of December
31,  2005,  based  on the  fair  value  estimated  as of the  date of  grant  in
accordance with the provisions of SFAS 123R.  SFAS 123R requires  forfeitures to
be estimated  at the time of grant and  revised,  if  necessary,  in  subsequent
periods  if  actual  forfeitures  differ  from  those  estimates.   Share  based
compensation  expense  calculated in accordance with SFAS 123R is to be based on
awards ultimately  expected to vest, and therefore the expense should be reduced
for estimated forfeitures. The Company's estimated forfeiture rate for the three
month period ended March 31, 2006 of zero percent is based upon the

                                       9
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

short  remaining  vesting periods of the option grants (all but one option grant
will be fully vested by the end of 2006) and because all of the unvested options
relate  to  longstanding  employees.  In the  Company's  pro  forma  information
required  to be  disclosed  under SFAS 123 for the  periods  prior to 2006,  the
Company accounted for forfeitures as they occurred.

     SFAS 123R requires the cash flows resulting from the tax benefits resulting
from tax  deductions in excess of the  compensation  cost  recognized  for those
options to be classified  as financing  cash flows.  Due to the  Company's  loss
position,  and as the  Company  had no tax  deductions  related to share  option
exercises,  there were no such tax  benefits  during the first  quarter of 2006.
Prior to the adoption of SFAS 123R,  those tax benefits would have been reported
as operating  cash flows had the Company  received  any tax benefits  related to
share option exercises.

     The fair value of share option grants to employees is calculated  using the
Black-Scholes  option  pricing  model,  even though this model was  developed to
estimate the fair value of freely tradable,  fully transferable  options without
vesting  restrictions,  which  differ  significantly  from the  Company's  share
options. The Black-Scholes model also requires subjective assumptions, including
future share price  volatility  and expected  time to  exercise,  which  greatly
affect the calculated  values.  The expected term of options  granted is derived
from  historical  data  on  employee   exercises  and  post-vesting   employment
termination behavior.  The risk-free rate is based on the U.S. Treasury rates in
effect  during the  corresponding  period of grant.  The expected  volatility is
based on the historical  volatility of the Company's share price.  These factors
could  change in the  future,  which would  affect the share based  compensation
expense in future  periods,  if the  Company,  through  the ESOT,  should  grant
additional share options.

Valuation and expense information under SFAS 123R

     The estimated fair value of share option  compensation awards to employees,
as calculated  using the  Black-Scholes  option  pricing model as of the date of
grant,  is amortized using the  straight-line  method over the vesting period of
the options.  For the three months  ended March 31, 2006,  compensation  expense
related to  employee  share  options  under  SFAS 123R  totaled  $32,000  and is
included in operating expenses in the accompanying statement of operations.


                                       10
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The table below  reflects net loss and basic and diluted loss per share and
ADS for the three  months  ended  March 31,  2006,  compared  with the pro forma
information for the three months ended March 31, 2005:
<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                      (In thousands, except per
                                                                                        share and ADS amounts)

<S>                                                                                  <C>            <C>
Net loss as reported for the prior period (1).....................................            N/A   $     (1,159)
Share based compensation expense related to employee share options (2)............            (32)            56(4)
                                                                                     ------------   ------------

Net loss, including the effect of share based compensation expense (3)............   $       (726)  $     (1,103)
                                                                                     ------------   ------------
                                                                                     ------------   ------------

Basic and diluted loss per share, as reported for the prior period (1)............                         (0.02)
Basic and diluted loss per share, including the effect of share based
    compensation..................................................................          (0.01)         (0.02)
Basic and diluted loss per ADS, as reported for the prior period (1)..............                         (0.23)
Basic and diluted loss per ADS, including the effect of share based
    compensation..................................................................          (0.14)         (0.22)


<FN>
(1) Net loss and loss per share and ADS prior to 2006 did not include  share based  compensation  expense for
    employee  share  options under SFAS 123R because the Company did not adopt the recognition provisions of SFAS 123.

(2) Share based compensation expense prior to 2006 is calculated based on the pro forma application of SFAS 123.

(3) Net loss and net loss per share and ADS prior to 2006 represents pro forma information based on SFAS 123.

(4) Compensation  expense was negative  for the three month period ended March 31, 2005 due to the reversal of $85,000
    in  compensation expense  recognized in prior periods  primarily  related to the forfeiture  during the first quarter
    of 2005 of all of the unvested and out-of-the-money vested options held by employees who terminated employment during
    the first quarter of 2005.
</FN>
</TABLE>


     During the first quarter of 2006,  there were no option grants,  exercises,
forfeitures or expirations.  No options vested during the first quarter of 2006,
as no unvested  options at December  31,  2005 have an  anniversary  date in the
first three months of the year.  At December 31, 2005 and March 31, 2006,  there
were 6,285,000  options  outstanding  with a weighted  average exercise price of
$2.77.  Of these options,  4,881,250  were  exercisable at December 31, 2005 and
March 31, 2006, and these have a weighted  average  exercise price of $3.52. The
remaining  1,403,750  options  were  unvested at December 31, 2005 and March 31,
2006.  These unvested options have a weighted average exercise price of $0.1963.
As of March  31,  2006,  total  unrecognized  compensation  expense  related  to
unvested  share  options  was  $62,000,  of  which  $26,000  is  expected  to be
recognized  during the  remainder of 2006 and the balance of $36,000 is expected
to be recognized ratably over 2007, 2008 and the first half of 2009.

     Option  grants  have not been made  since the second  quarter of 2005.  The
options granted in May 2005 were valued using the  Black-Scholes  option pricing
model with the following  assumptions:  expected share price  volatility of 34%,
risk-free  interest rate of 3.89%,  weighted average expected life of 6.25 years
and expected dividend yield of zero percent.

     For additional information relating to our employee share options, see Note
13 to the Company's  consolidated financial statements included in our Form 10-K
for the year ended December 31, 2005.


                                       11
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Issued Accounting Pronouncements

     Effective  January 1, 2006,  the Company  adopted  Statement  of  Financial
Accounting  Standards  No.  154  ("SFAS  154"),  "Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20 and FASB Statement No. 3." The
statement  requires  retrospective   application  to  prior  periods'  financial
statements for a voluntary  change in accounting  principle  unless it is deemed
impracticable.  It also  requires  that a change in the method of  depreciation,
amortization, or depletion for long-lived, non-financial assets be accounted for
as a change in accounting estimate rather than a change in accounting principle.
The  adoption  of SFAS 154 did not have any  impact on the  Company's  unaudited
interim condensed consolidated financial statements.

     In September 2005, the American  Institute of Certified Public  Accountants
issued  Statement  of  Position  05-1 ("SOP  05-1"),  "Accounting  by  Insurance
Enterprises for Deferred  Acquisition Costs in Connection with  Modifications or
Exchanges of Insurance  Contracts." SOP 05-1 provides  guidance on accounting by
insurance enterprises for deferred acquisition costs on internal replacements of
insurance and investment  contracts other than those  specifically  described in
Statement of Financial Accounting Standards No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains
and  Losses  from  the  Sale of  Investments."  SOP  05-1  defines  an  internal
replacement  as  a  modification  in  product  benefits,  features,  rights,  or
coverages  that occurs by the exchange of a contract for a new  contract,  or by
amendment,  endorsement, or rider to a contract, or by the election of a feature
or coverage within a contract.  Under SOP 05-1,  modifications  that result in a
substantially  unchanged contract will be accounted for as a continuation of the
replaced contract. A replacement contract that is substantially  changed will be
accounted  for as an  extinguishment  of the  replaced  contract  resulting in a
release of unamortized deferred acquisition costs, unearned revenue and deferred
sales  inducements  associated with the replaced  contract.  The guidance in SOP
05-1 will be applied  prospectively  and is effective for internal  replacements
occurring in fiscal years beginning after December 15, 2006. Because the Company
is not replacing insurance  policies,  the Company does not expect any impact on
the Company's  consolidated  financial  statements.

                                       12
<PAGE>




                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2.   Earnings Per Share and ADS

     The Company  calculates  earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings per Share." This
statement  requires the  presentation  of basic and diluted  earnings per share.
Basic  earnings  per share is  calculated  by dividing net income or loss by the
weighted-average  number of Ordinary  Shares  outstanding  during the applicable
period,  excluding  shares  held by the ESOT and the ALOT which are  regarded as
treasury  stock for the  purposes  of this  calculation.  The Company has issued
employee share options,  which are considered  potential common stock under SFAS
128.

     The Company has also issued  Ordinary Share warrants to Bank of Scotland in
connection  with the Company's  bank facility (now  terminated),  which are also
considered  potential common stock under SFAS 128. Diluted earnings per share is
calculated  by dividing  net income by the  weighted-average  number of Ordinary
Shares   outstanding   during  the  applicable  period  as  adjusted  for  these
potentially  dilutive  options and warrants  which are  determined  based on the
"Treasury  Stock  Method."  As the  Company  recorded a net loss for both of the
three month periods ended March 31, 2006 and 2005, the  calculations  of diluted
loss per share for these periods do not include  potentially  dilutive  employee
share  options  and  warrants  issued  to the  Bank  of  Scotland  as  they  are
anti-dilutive  and, if included,  would have  resulted in a reduction of the net
loss per share.  If the  Company had  reported  net income for both of the three
month periods ended March 31, 2006 and 2005, there would have been an additional
0 and 117,139  shares,  respectively,  included in the  calculations  of diluted
earnings per share for these periods.

     A  reconciliation  of the  numerators  and  denominators  for the basic and
diluted earnings (loss) per share calculations is as follows:

<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                      (In thousands, except per
                                                                                        share and ADS amounts)

<S>                                                                                  <C>            <C>



Net loss..........................................................................   $       (726)  $     (1,159)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
Basic and diluted loss per share and ADS:
Weighted average number of Ordinary Shares outstanding,
  excluding shares held by the employee benefit trusts............................         50,917         50,917
                                                                                     ------------   ------------

Basic and diluted loss per share..................................................   $      (0.01)  $      (0.02)
                                                                                     ------------   ------------
                                                                                     ------------   ------------

Basic and diluted loss per ADS....................................................   $      (0.14)  $      (0.23)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>

                                       13
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.   Investments

     The Group's  investments  consist of fixed maturity and equity  securities.
Fixed  maturity  securities  are  classified  as  either  available-for-sale  or
held-to-maturity,  and equity  securities  are  classified as either  trading or
available-for-sale. The investments are accounted for as follows:

     i)   available-for-sale securities are recorded at fair value, with changes
          in unrealized gains and losses excluded from net income,  but reported
          net of  applicable  income taxes and  adjustments  to deferred  policy
          acquisition cost  amortization as a separate  component of accumulated
          other comprehensive income;

     ii)  held-to-maturity  securities  are  recorded at  amortized  cost unless
          these securities become other-than-temporarily impaired; and

     iii) trading  securities  are  recorded  at  fair  value  with  changes  in
          unrealized gains and losses included in net income.

     When a quoted market price is available for a security, the Group uses this
price to determine  fair value.  If a quoted market price is not available for a
security,  management  estimates the security's  fair value based on appropriate
valuation methodologies.

     For a discussion of the Company's  accounting  policies with respect to the
determination of fair value of investments and other-than-temporary impairments,
see the  section  entitled  "Critical  Accounting  Policies"  in Part I,  Item 2
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  below.  The  Group's  private   securities   primarily  consist  of
convertible  preferred  stock  holdings  in  technology  companies.   Management
periodically reviews financial information with respect to the issuers of equity
securities held by the Group. In addition, management maintains contact with the
management of these  issuers  through  ongoing  dialogue to examine the issuers'
future plans and prospects.

Fixed Maturity Securities

     The Group's fixed  maturity  securities  are comprised of U.S. and non-U.S.
corporate  debt  securities.  Generally,  quoted market prices are available for
these securities.

     An analysis of fixed maturity securities is as follows:
<TABLE>
<CAPTION>

                                                March 31, 2006                                 December 31, 2005
                                ----------------------------------------------    ---------------------------------------------
                                               Gross       Gross     Estimated                   Gross       Gross    Estimated
                                 Amortized  Unrealized  Unrealized     Fair        Amortized  Unrealized  Unrealized     Fair
                                   Cost       Gains       Losses      Value          Cost        Gains      Losses      Value
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
                                                                         (In thousands)
Available-for-Sale:
Non-U.S. corporate
<S>                             <C>         <C>         <C>         <C>           <C>         <C>         <C>         <C>
   debt securities.........     $   12,001  $       14  $      (14) $   12,001    $    8,500  $       38  $        -  $   8,538
Corporate debt securities..          4,319           -          (4)      4,315         5,309           -         (18)     5,291
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
                                    16,320          14         (18)     16,316        13,809          38         (18)    13,829
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
Held-to-Maturity:
Corporate debt securities..          3,033           -         (15)      3,018         7,011           -         (29)     6,982
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
                                     3,033           -         (15)      3,018         7,011           -         (29)     6,982
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
Total fixed maturity
  securities...............     $   19,353  $       14  $      (33) $   19,334    $   20,820  $       38  $      (47) $  20,811
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
                                ----------  ----------  ----------  ----------    ----------  ----------  ----------  ---------
</TABLE>


                                       14
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investment Concentration and Risk

     As of March 31, 2006, fixed maturity  securities held by the Group included
investments in Cadbury  Schweppes of $3,731,000,  British Telecom of $3,054,000,
AOL Time  Warner of  $2,016,000  and  General  Mills of  $1,999,000.  These four
corporate  issuers each represented more than 10% of shareholders'  equity as of
March 31, 2006. However, all of these bonds mature on or before June 26, 2007.

     As of March 31, 2006, the Company's Jersey based life insurance subsidiary,
LPAL, owned 84% of the Group's $19.3 million in fixed maturity  securities,  99%
of the Group's $0.9 million in available-for-sale private equity securities, and
none  of the  Group's  $140,000  in  trading  securities.  LPAL  is a  regulated
insurance  company,  and  as  such  it  must  meet  stringent  capital  adequacy
requirements and it may not make any distributions without the consent of LPAL's
independent actuary. LPAL's investments are therefore not currently available to
fund the operations or commitments of the Company or its other subsidiaries.

     As of March 31, 2006, the Group held one fixed  maturity  security that was
considered less than investment grade.  This security  represented 1.6% of total
fixed maturity securities as of March 31, 2006. This security was repaid in full
at maturity in April 2006.


Note 4.   Cash Held in Escrow

     Cash  held in  escrow  consists  of the  proceeds  from the sale of  London
Pacific Advisors ("LPA") to SunGard Business Systems Inc. ("SunGard") on June 5,
2003  which  were held back to cover any of the  Group's  indemnity  obligations
within the 18 month period  following the close of the  transaction.  Funds were
due to be released  with  accrued  interest in December  2004,  less any amounts
related  to  indemnification  matters  as  set  out  in the  sale  and  purchase
agreement.  The Company was made aware on March 8, 2005 of  SunGard's  complaint
with  respect to  alleged  losses in an amount  equal to at least  $7.2  million
resulting from alleged breaches of representations  and warranties  contained in
the sale and purchase agreement.  SunGard is also seeking  indemnification  from
the Company.  After consultation with its legal advisors, the Group's management
believes that this claim is without merit, and the Group is defending the matter
vigorously.  Due to this  indemnification  claim by SunGard, the $1.0 million in
cash held in escrow was not released to the Group in December 2004 as scheduled.
The  Company  has not made any  reserve  against  the $1.0  million  in cash and
accrued interest held in escrow.

     For further information, see Part II, Item 1 "Legal Proceedings" below.


Note 5.   Other Assets

     An analysis of other assets is as follows:
<TABLE>
<CAPTION>

                                                                                       March 31,    December 31,
                                                                                         2006            2005
                                                                                     ------------   ------------
                                                                                              (In thousands)

<S>                                                                                  <C>            <C>
Property, equipment and leasehold improvements, net...............................   $         34   $         43
Prepayments.......................................................................            249            202
Receivables:
   Fee income receivable..........................................................             89             84
   Other receivables .............................................................             24             25
                                                                                     ------------   ------------
Total other assets................................................................   $        396   $        354
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>

                                       15
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6.   Commitments and Contingencies

     As previously  disclosed in the Company's 2002 to 2005 audited consolidated
financial statements, and notes thereto, included in the Company's Annual Report
on Form 10-K for each of those years, the Company's primary  insurance  company,
London Pacific Life & Annuity Company ("LPLA"),  in August 2002 was placed under
regulatory  control and  rehabilitation  based on LPLA's  statutory  capital and
surplus as of June 30, 2002. On July 9, 2004, a court order was issued approving
a plan of liquidation for LPLA and also approving exchange agreements which give
policyholders  the option of exchanging their existing policies for new policies
in another  insurance  company.  In the course of the  administration of LPLA in
rehabilitation,  the North Carolina  Department of Insurance ("NCDOI") requested
information  concerning  the  history  of a  limited  number of  investments  in
securities  of  portfolio   companies  during  November  2002.  These  portfolio
investments  have  been  associated  with LPLA for more than  seven  years,  and
involve intercompany transfers.  The history of their investment performance and
ownership is complex. The Company has complied with these requests.  The Company
is not able at this time to predict what  conclusions the NCDOI will reach after
evaluation of this information.

     As discussed  above in Note 4 "Cash Held in Escrow," on March 8, 2005,  the
Company was made aware of a complaint  filed by SunGard and SunGard's  claim for
indemnification  with  respect to alleged  losses in an amount equal to at least
$7.2 million resulting from alleged breaches of  representations  and warranties
contained in the sale and purchase agreement.  After consultation with its legal
advisors,  the Group's management believes that this claim is without merit, and
the Group is defending  the matter  vigorously.  As such,  no provision for this
contingent liability has been included in the Group's financial statements as of
March 31, 2006, nor has the Company made any reserve against the $1.0 million in
cash  and  accrued  interest  held  in  escrow.  See  Part  II,  Item  1  "Legal
Proceedings" below for further information.

Guarantees

     In November  2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45"),
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others - an  interpretation  of FASB
Statements No. 5, 57 and 107 and rescission of FASB  Interpretation No. 34." The
following  is a  summary  of the  Company's  agreements  that  the  Company  has
determined are within the scope of FIN 45.

     Under its Memorandum and Articles of Association, the Company has agreed to
indemnify its officers and directors for certain events or  occurrences  arising
as a result of the officer or  director  serving in such  capacity.  The maximum
potential  amount of future payments the Company could be required to make under
these  indemnification  agreements is unlimited.  However, the Company maintains
directors and officers  liability  insurance that limits the Company's  exposure
and enables it to recover a portion of any future  amounts  paid. As a result of
its insurance  coverage,  the Company believes the estimated fair value of these
indemnification  agreements is minimal and has no liabilities recorded for these
agreements as of March 31, 2006.

     The Company  enters into  indemnification  provisions  under its agreements
with other companies in its ordinary course of business, typically with business
partners,  clients and landlords.  Under these provisions, the Company generally
indemnifies  and holds  harmless the  indemnified  party for losses  suffered or
incurred by the indemnified party as a result of the Company's activities. These
indemnification   provisions  sometime  include  indemnifications   relating  to
representations made by the Company with regard to intellectual property rights.
These indemnification provisions generally survive termination of the underlying
agreement.  The maximum potential amount of future payments the Company could be
required  to make under  these  indemnification  provisions  is  unlimited.  The
Company  believes  the  estimated  fair value of these  agreements  is  minimal.
Accordingly,  the Company has no liabilities recorded for these agreements as of
March 31, 2006.

                                       16
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7.   Business Segment and Geographical Information

     The Company's reportable operating segments are classified according to its
businesses of life insurance and annuities, and venture capital and consulting.

     Intercompany  transfers between reportable operating segments are accounted
for at prices  which are designed to be  representative  of  unaffiliated  third
party transactions.

     Summary  revenue and  investment  gain  (loss)  information  by  geographic
segment,  based on the domicile of the Group company  generating those revenues,
is as follows:
<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                           (In thousands)

<S>                                                                                  <C>            <C>
Jersey............................................................................   $        272   $        310
Guernsey..........................................................................             29             15
United States.....................................................................            264            150
                                                                                     ------------   ------------
Consolidated revenues and net investment gains and losses.........................   $        565   $        475
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>

     Revenues  and income  (loss)  before  income tax expense for the  Company's
reportable  operating  segments,   based  on  management's   internal  reporting
structure, were as follows:
<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                           (In thousands)
Revenues and net investment gains and losses:
<S>                                                                                  <C>            <C>
Venture capital management........................................................   $        207   $         98
Life insurance and annuities .....................................................            271            296
                                                                                     ------------   ------------
                                                                                              478            394
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income ....................................................             87             81
                                                                                     ------------   ------------
Consolidated revenues and net investment gains and losses.........................   $        565   $        475
                                                                                     ------------   ------------
                                                                                     ------------   ------------
Loss before income taxes:
Venture capital management........................................................   $        (46)  $       (211)
Life insurance and annuities .....................................................            (81)          (433)
                                                                                     ------------   ------------
                                                                                             (127)          (644)
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income.....................................................             87             81
Corporate expenses................................................................           (681)          (591)
                                                                                     ------------   ------------
Consolidated loss before income tax expense ......................................   $       (721)  $     (1,154)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>


                                       17
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     As used herein,  the terms  "registrant,"  "Company,"  "we," "us" and "our"
refer to Berkeley Technology Limited.  Except as the context otherwise requires,
the term "Group" refers collectively to the registrant and its subsidiaries.

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations should be read in conjunction with the unaudited condensed
consolidated  financial  statements,  and the notes  thereto,  included  in this
quarterly  report,  and the  December 31, 2005  audited  consolidated  financial
statements,  and the notes  thereto,  included in our Annual Report on Form 10-K
filed  with the SEC on March 30,  2006.  The  unaudited  condensed  consolidated
financial statements are prepared in accordance with U.S. GAAP. This item should
also be read in  conjunction  with the  "Forward-Looking  Statements and Factors
That May  Affect  Future  Results"  which are set  forth  below and in our other
filings with the SEC.

Forward-Looking Statements and Factors That May Affect Future Results

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations and other sections of this report contain  forward-looking
statements  within the meaning of Section 21E of the Securities  Exchange Act of
1934,  as  amended.  Such  forward-looking   statements  are  based  on  current
expectations, estimates, forecasts and projections about the industries in which
we operate,  management's  current beliefs and  assumptions  made by management.
Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates,"  "goals,"  variations  of such words and  similar  expressions  are
intended to identify such forward-looking  statements.  These statements are not
guarantees of future  performance and involve certain risks,  uncertainties  and
assumptions  that are  difficult  to predict.  Future  outcomes  and results may
differ  materially from what is expressed or forecasted in such  forward-looking
statements. We undertake no obligation to update any forward-looking statements,
whether as a result of new information, future developments or otherwise.

     Factors   that  could  cause  or   contribute   to   deviations   from  the
forward-looking statements include those discussed in this section, elsewhere in
this report and in our other filings with the SEC. The factors include,  but are
not limited to, (i) the risks described in Item 3 "Quantitative  and Qualitative
Disclosures  About Market Risk," (ii)  variations in demand for our products and
services,  (iii) the success of our new products and services,  (iv) significant
changes in net cash flows in or out of our businesses,  (v)  fluctuations in the
performance of debt and equity markets worldwide,  (vi) the enactment of adverse
state,  federal  or  foreign  regulation  or  changes  in  government  policy or
regulation (including accounting standards) affecting our operations,  (vii) the
effect of  economic  conditions  and  interest  rates in the U.S.,  the U.K.  or
internationally,  (viii)  the  ability of our  subsidiaries  to compete in their
respective businesses, (ix) our ability to attract and retain key personnel, and
(x) actions by governmental authorities that regulate our businesses,  including
insurance commissions.

                                       18
<PAGE>



RESULTS OF OPERATIONS BY BUSINESS SEGMENT

Venture Capital and Consulting

     Certain information  regarding our venture capital and consulting segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                           (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                  <C>            <C>
Consulting fees...................................................................   $        150   $        138
Change in net unrealized investment gains and losses on trading securities........             57            (40)
                                                                                     ------------   ------------
Total revenues and net investment gains (losses)..................................            207             98

Operating expenses................................................................            253            309
                                                                                     ------------   ------------
Loss before income tax expense....................................................   $        (46)  $       (211)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>

First quarter of 2006 compared to first quarter of 2005

     In the first quarter of 2006, the venture  capital and  consulting  segment
contributed  a loss before  income  taxes of $46,000 to our overall  loss before
income  taxes,  compared to a loss before  income  taxes of $0.2  million in the
first  quarter  of 2005.  The  lower  loss  for the  first  quarter  of 2006 was
attributable to lower  operating  expenses than in the first quarter of 2005, as
well as to  unrealized  gains  instead  of  unrealized  losses on listed  equity
securities.

     The change in net unrealized  gains and losses in the listed equity trading
portfolio  during the first quarter of 2006 was a gain of $57,000  compared to a
loss of $40,000 in the first quarter of 2005. The trading portfolio,  consisting
of only two listed equity securities,  increased from $84,000 as of December 31,
2005 to $140,000 as of March 31, 2006.

     The venture  capital  and  consulting  segment  earned  consulting  fees of
$150,000  during the first  quarter of 2006,  compared  to $138,000 in the first
quarter of 2005, by advising four Silicon  Valley  telecommunications  equipment
companies   in   dealing   with   large   incumbent    European   and   Japanese
telecommunications  companies. BICC's objective is to use consulting revenues to
finance the development of large telecommunications company relationships, which
will  eventually  lead  to  equity  based  transactions,  with  fees  or  direct
investment  opportunities  for the Group.  There is also the  possibility of new
venture  funds  raised in  partnership  with  international  sources  of capital
leading to management fees and carried interests.

     Operating  expenses  in the first  quarter of 2006  decreased  by  $56,000,
compared to the first quarter of 2005,  reflecting our overall efforts to reduce
operating costs.


                                       19
<PAGE>


Life Insurance and Annuities

     Certain  information  regarding our life insurance and annuities  segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                     ---------------------------
                                                                                         2006           2005
                                                                                     ------------   ------------
                                                                                           (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                  <C>            <C>
Investment income.................................................................   $        271   $        321
Insurance policy charges .........................................................              -              -
Net realized investment losses....................................................              -            (43)
Change in net unrealized investment gains and losses on trading securities .......              -             18
                                                                                     ------------   ------------
Total revenues and net investment losses..........................................            271            296

Expenses:
Amounts credited on insurance policyholder accounts ..............................            170            290
General and administrative expenses ..............................................            182            439
                                                                                     ------------   ------------
Total expenses....................................................................            352            729
                                                                                     ------------   ------------
Loss before income tax expense....................................................   $        (81)  $       (433)
                                                                                     ------------   ------------
                                                                                     ------------   ------------
</TABLE>

     As  previously  disclosed in our 2002  through 2005 Annual  Reports on Form
10-K,  on July 2, 2002,  we announced  that LPAL would  discontinue  writing new
policies effective immediately.  The decision to discontinue the issuance of new
policies  was  made to avoid  the  increased  capital  requirements  created  by
additional  policyholder  liabilities.  Subsequent  to this  announcement,  LPAL
policy surrenders  increased  substantially.  Approximately 92% of LPAL's $140.2
million in policyholder liabilities as of June 30, 2002 have been surrendered or
have matured as of March 31, 2006. Policyholder liabilities as of March 31, 2006
were $11.1 million. Almost all of the surrenders since June 30, 2002 occurred in
the second half of 2002; most of the decrease in policyholder  liabilities since
the end of 2002 is attributable to policy maturities.

     LPAL  now  focuses  on  managing  the  remaining   block  of   policyholder
liabilities. There are no plans currently to write new policies.

First quarter of 2006 compared to first quarter of 2005

     In the first quarter of 2006,  LPAL  contributed a loss before income taxes
of $81,000 to our overall loss before  income  taxes,  compared to a loss before
income taxes of $0.4 million in the first quarter of 2005.

     The spread between  investment income and amounts credited to policyholders
improved during the first quarter of 2006 compared to the first quarter of 2005,
from  $31,000 in the first  quarter of 2005 to $101,000 in the first  quarter of
2006.  Interest and dividend income on investments  decreased by $50,000 and was
due primarily to the decline in the level of LPAL's corporate bond  investments,
which was  consistent  with the  decline in  policyholder  liabilities  over the
period.  Amounts credited on policyholder  accounts decreased by $0.1 million in
the first quarter of 2006 to $0.2 million, compared to $0.3 million in the first
quarter of 2005. This decrease was primarily due to policy  maturities since the
first quarter of 2005.  The average rate credited to  policyholders  was 5.2% in
the first quarter of 2006, compared with 5.5% in the first quarter of 2005.

     There were no net investment  gains or losses in the first quarter of 2006,
compared  with net  investment  losses of $25,000 in the first  quarter of 2005.
During 2004, LPAL held significant levels of listed equity  securities,  causing
LPAL's results to be impacted by equity market volatility. By the end of January
2005,  LPAL had sold all of its listed  equity  securities  and as such,  LPAL's
equity market risk has been reduced significantly.

                                       20
<PAGE>

     Total  invested  assets  decreased  to $22.2  million as of March 31, 2006,
compared to $24.7 million as of December 31, 2005, primarily due to policyholder
benefits paid of $2.7 million.  On total  average  invested  assets in the first
quarter of 2006, the average annualized net return,  including both realized and
unrealized  investment  gains and losses,  was 4.2%,  compared  with 3.8% in the
first quarter of 2005.

     Policyholder  liabilities  as of March 31, 2006 were $11.1 million of which
$8.1 million is scheduled to mature  during the  remaining  nine months of 2006.
LPAL expects to meet these  maturities by using the proceeds from maturing bonds
which are estimated to be $7.2 million  during the remaining nine months of 2006
and estimated interest income to be received during the remaining nine months of
2006 of $0.9 million,  as well as part of its cash balance of $4.3 million as of
March  31,  2006.  In  the  absence  of  significant  redemptions,  policyholder
liabilities are projected to be approximately $3.0 million at the end of 2006.

     Included in general and  administrative  expenses for the first  quarter of
2005 were $0.3 million of employee severance costs. In order to reduce operating
costs and to conserve  cash,  and in light of the decrease in the size of LPAL's
operations,  LPAL reduced its staff in January 2005.  Excluding the $0.3 million
of employee severance costs,  general and administrative  expenses for the first
quarter  of 2005 were  $146,000.  For the first  quarter  of 2006,  general  and
administrative  expenses were $182,000.  This $36,000 increase was due primarily
to  higher  corporate  insurance  costs  allocated  to the  life  insurance  and
annuities segment.

Corporate and Other

First quarter of 2006 compared to first quarter of 2005

     Included in corporate  expenses for the first  quarter of 2005 were $80,000
of  employee  severance  costs.  In order to reduce our  operating  costs and to
conserve  cash,  and in light of the decrease in the size and  complexity of our
continuing  operations,  we reduced  our  corporate  staff in January  2005.  In
addition,  we  implemented  other cost  reductions  during 2005.  Excluding  the
$80,000 of employee severance costs, corporate expenses for the first quarter of
2005 were $0.5 million. In the first quarter of 2006, corporate expenses totaled
$0.7  million.  This $0.2  million  increase  was due  primarily  to legal  fees
associated with the SunGard legal proceedings  described in Item 1 of Part II of
this Form 10-Q.

     As  discussed  above  in  Note 1 to our  Unaudited  Condensed  Consolidated
Financial  Statements under "Share Based  Compensation," we adopted SFAS 123R on
January 1, 2006. As such, we recognized  $32,000 of compensation  expense in the
corporate  segment  during the first  quarter of 2006 related to employee  share
options.  As total unrecognized  compensation  expense related to unvested share
options at March 31, 2006 is only  $62,000,  SFAS 123R  compensation  expense in
future  periods will not be  material,  assuming  that no new option  grants are
made.

Consolidated Loss Before Income Tax Expense

First quarter of 2006 compared to first quarter of 2005

     Our  consolidated  loss before  income tax expense was $0.7  million in the
first  quarter of 2006  compared  to a loss  before  income tax  expense of $1.2
million in the first  quarter of 2005.  This lower loss was due  primarily  to a
$0.2 million decrease in operating expenses,  higher net investment income after
amounts  credited on insurance  policyholder  accounts of $0.1 million,  and net
unrealized  investment gains of $57,000 in the first quarter of 2006 compared to
net realized and unrealized investment losses of $65,000 in the first quarter of
2005.

     Due to the sale of almost all of our listed equity securities by the end of
January  2005,  our results will no longer be  significantly  impacted by equity
market volatility.

     We continue  to pursue  opportunities  to grow the  business in the future,
however,  there is no guarantee that we will be successful in  redeveloping  our
venture capital and consulting operations.

                                       21
<PAGE>

Income Taxes

     We are  subject  to  taxation  on our income in all  countries  in which we
operate based upon the taxable income arising in each country. However, realized
gains on certain  investments are exempt from Jersey and Guernsey  taxation.  We
are subject to income tax in Jersey at a rate of 20%. In the United  States,  we
are subject to both federal and  California  taxes at rates up to 34% and 8.84%,
respectively.


First quarter of 2006 compared to first quarter of 2005

     The $5,000  tax  expense  for both the first  quarter of 2006 and the first
quarter of 2005 is comprised of California minimum taxes for each year. Although
our loss before  income tax expense  was $0.7  million for the first  quarter of
2006, we did not recognize any tax benefits.  Our Jersey and Guernsey operations
contributed  losses of $0.3 million  during the period for which no tax benefits
will be  realized.  Losses of $0.4  million  were also  contributed  by our U.S.
subsidiaries  during the period;  we did not recognize any U.S. tax benefits due
to the 100%  valuation  allowances  that we have  provided  for all deferred tax
assets.


CRITICAL ACCOUNTING POLICIES

     Management has identified those accounting policies that are most important
to the accurate  portrayal of our financial  condition and results of operations
and that require management's most complex or subjective  judgments,  often as a
result of the need to make  estimates  about  the  effect  of  matters  that are
inherently  uncertain.  These most critical  accounting  policies pertain to our
investments, life insurance policy liabilities and contingent liabilities. These
critical accounting policies are described below.

Determination of Fair Values of Investments

     When a quoted market price is available  for a security,  we use this price
in the  determination  of fair value.  If a quoted market price is not available
for a  security,  management  estimates  the  security's  fair  value  based  on
valuation methodologies as described below.

     We  hold  investments  in  privately  held  equity  securities,   primarily
convertible  preferred  stock in venture  capital  companies  doing  business in
various segments of technology  industries.  Venture capital  investing  entails
making  investments in companies  that are  developing  products or services for
large  emerging  markets  with the  belief  that  these  investments  will yield
superior  returns if these  companies  are  successful.  These  investments  are
normally held for a number of years. When we make these investments, most of the
companies  are still  developing  the products they intend to bring to market or
are in the early stages of product  sales.  Venture  capital  companies  are net
consumers of cash and often dependent upon additional financing to execute their
business plans.  These  investments  involve  substantial risk and the companies
generally  lack  meaningful  historical  financial  results used in  traditional
valuation  models.  The process of pricing  these  securities  range from fierce
competitive  bidding  between  financial   institutions  to  existing  investors
negotiating  prices  with  the  company  without  outside  investor  validation.
Investments  in  convertible   preferred   stock  come  with  rights  that  vary
dramatically both from company to company and between rounds of financing within
the same company. These rights, such as anti-dilution,  redemption,  liquidation
preferences and participation, bear directly on the price an investor is willing
to pay for a security.  The returns on these investments are generally  realized
through an initial  public  offering of the company's  shares or, more commonly,
through the company's acquisition by a public company.

     One of the  factors  affecting  fair value is the  amount of time  before a
company  requires  additional  financing to support its  operations.  Management
believes that companies that are financed to the estimated  point of operational
profitability  or for a period  greater  than one year will most  likely  return
value to the investor through an acquisition between a willing buyer and seller,
as the company does not need to seek financing from an opportunistic investor or
insider in an adverse  investment  environment.  If a particular  company  needs
capital in the near term,  management  considers  a range of factors in its fair
value  analysis,  including  our  ability  to  recover  our  investment  through
surviving liquidation  preferences.  Management's  valuation  methodologies

                                       22
<PAGE>

also include fundamental analysis that evaluates the investee company's progress
in developing products,  building  intellectual property portfolios and securing
customer  relationships,  as well as overall industry conditions,  conditions in
and prospects for the investee's  geographic  region,  and overall equity market
conditions.   This  is  combined  with   analysis  of   comparable   acquisition
transactions and values to determine if the security's  liquidation  preferences
will ensure full recovery of our investment in a likely acquisition  outcome. In
its valuation analysis, management also considers the most recent transaction in
a company's shares.

     The determination of fair values of investments requires the application of
significant  judgment.  It is possible that the factors  evaluated by management
and fair values will change in subsequent  periods,  especially  with respect to
our  privately  held equity  securities in  technology  companies,  resulting in
material impairment charges in future periods.

Other-than-temporary Impairments

     Management  performs an ongoing review of all  investments in the portfolio
to   determine   if   there   are  any   declines   in  fair   value   that  are
other-than-temporary.

     Since our listed equity  securities are  classified as trading  securities,
impairment  adjustments  are not  required as any change in the market  value of
these securities between reporting periods is included in earnings.

     In  relation  to  our  equity   securities  that  do  not  have  a  readily
determinable  fair value and are  classified as  available-for-sale,  factors we
consider in  impairment  reviews  include:  (i) the length of time and extent to
which  estimated  fair  values  have been  below  cost and the  reasons  for the
decline,  (ii)  the  investee's  recent  financial  performance  and  condition,
earnings trends and future  prospects,  (iii) the market condition of either the
investee's  geographic area or industry as a whole, and (iv) concerns  regarding
the investee's  ability to continue as a going concern (such as the inability to
obtain  additional  financing).  If the evidence supports that a decline in fair
value is  other-than-temporary,  then the investment is reduced to its estimated
fair value,  which becomes its new cost basis,  and a realized loss is reflected
in earnings.

     We determine that a fixed maturity security is impaired when it is probable
that we will  not be  able to  collect  amounts  due  (principal  and  interest)
according to the security's  contractual  terms. We make this  determination  by
considering  all  available  facts and  circumstances,  including our intent and
ability to continue to hold the investment to maturity.  The factors we consider
include:  (i) the length of time and extent to which the market values have been
below  amortized cost and the reasons for the decline,  (ii) the issuer's recent
financial performance and condition, earnings trends and future prospects in the
near to mid-term,  (iii) changes in the issuer's  debt rating and/or  regulatory
actions or other events that may effect the issuer's operations, (iv) the market
condition of either the issuer's geographic area or industry as a whole, and (v)
factors  that raise  doubt  about the  issuer's  ability to  continue as a going
concern.   If  the   evidence   supports   that  a  decline  in  fair  value  is
other-than-temporary,  then the fixed  maturity  security is written down to its
quoted market value,  if such a value is  available.  If a readily  determinable
fair value does not exist,  then the fixed maturity  security is written down to
management's  estimate  of its fair  value,  which  is  based  on the  valuation
methodologies  described above.  Write-downs are recorded as realized losses and
included in earnings.

     The   evaluations   for   other-than-temporary   impairments   require  the
application of significant  judgment. It is possible that the impairment factors
evaluated  by  management  and fair values will  change in  subsequent  periods,
especially  with  respect to  privately  held equity  securities  in  technology
companies, resulting in material impairment charges in future periods.

Life Insurance Policy Liabilities

     We  account  for life  insurance  policy  liabilities  in  accordance  with
Statement of Financial Accounting Standards No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains
and Losses from the Sale of  Investments."  We account for life insurance policy
liabilities for deferred annuities as investment-type  insurance products and we
record these liabilities at

                                       23
<PAGE>


accumulated value (premiums received, plus accrued interest to the balance sheet
date, less withdrawals and assessed fees).

Contingent Liabilities

     As discussed in Note 6 to our Unaudited  Condensed  Consolidated  Financial
Statements,  we are involved in various  matters that may or may not result in a
loss to the Group.  We account for  contingent  liabilities  in accordance  with
Statement  of   Financial   Accounting   Standards   No.  5,   "Accounting   for
Contingencies."  As such, in situations where we believe that a loss is probable
and where we can  reasonably  estimate the amount of the loss, we will recognize
that estimated loss in our financial  statements.  Because of the  uncertainties
that exist, we cannot predict the outcome of the pending matters with certainty.
Actual results may differ from our estimates,  and the ultimate outcome of these
matters  could  have a  significant  impact on our  results  of  operations  and
financial position.


LIQUIDITY AND CAPITAL RESOURCES

     Our cash and cash equivalents decreased during the first quarter of 2006 by
$1.7  million  to $8.2  million.  This  decrease  in cash and  cash  equivalents
resulted from $2.7 million and $0.6 million of cash used in financing activities
and  operating  activities,  respectively,  partially  offset  by  $1.5  million
provided by investing  activities.  Cash used in financing activities related to
insurance  policyholder benefits paid by LPAL. Cash used by operating activities
primarily resulted from the $0.7 million operating loss for the first quarter of
2006. Cash provided by investing activities primarily related to the maturity of
corporate bonds held by the Group and LPAL,  partially offset by the purchase of
fixed maturity  securities by the Group and LPAL. As of March 31, 2006, our cash
and cash  equivalents,  excluding  the  amount  held by LPAL,  amounted  to $3.9
million,  an increase of $3.3 million from December 31, 2005. We reinvested $3.0
million of the $7.0  million  proceeds  from the  corporate  bonds that  matured
during the first  quarter of 2006.  This $3.0  million in  corporate  bonds will
mature on or before June 26, 2007.  Excluding LPAL's  investments,  we also held
$0.1  million of listed  equity  securities  which  could be sold within a short
period of time as of March 31, 2006.

     Shareholders'  equity  decreased  during the first  quarter of 2006 by $0.7
million from $19.6  million at December  31, 2005 to $18.9  million at March 31,
2006,  due to the net loss for the period of $0.7 million.  As of March 31, 2006
and December 31, 2005,  $62.6 million of our Ordinary  Shares,  at cost, held by
the employee benefit trusts have been netted against shareholders' equity.

     As discussed  above in "Results of  Operations  by Business  Segment - Life
Insurance and Annuities," LPAL  discontinued  issuing new policies in July 2002.
During the first  quarter  of 2006,  LPAL  continued  to  service  its  existing
policyholders.  During this period, policy surrenders totaled $35,000 and policy
maturities totaled $2.7 million.  Policyholder liabilities were $11.1 million as
of March 31, 2006,  compared to $13.6 million as of December 31, 2005. We do not
expect significant  surrender activity during the remaining nine months of 2006;
however, approximately $8.1 million of policyholder liabilities are scheduled to
mature during this period.  LPAL has sufficient  liquid  resources to fund these
maturities.  As of  March  31,  2006,  LPAL had  cash of $4.3  million,  accrued
interest receivable of $0.6 million and corporate bonds of $16.3 million.

     In prior  years,  LPAL held listed  equity  securities  at levels such that
fluctuations  in the market value of these listed equity  securities  could have
had a significant  impact on LPAL's statutory capital level.  Following the sale
of LPAL's  remaining  listed  equity  holdings  during 2004 and in January 2005,
fluctuations  in the market value of LPAL's listed  equity  securities no longer
have an impact on LPAL's required statutory capital level.

     As of March 31, 2006,  we had no bank  borrowings,  guarantee  obligations,
material commitments  outstanding for capital expenditures or additional funding
for private equity portfolio companies.

     As of March 31, 2006, we had $3.9 million of cash and cash  equivalents and
$3.0  million in  corporate  bonds that will mature on or before June 26,  2007,
excluding  cash and bonds held by our life insurance and annuities  segment.  We
believe that this cash balance and the bond maturity  proceeds are sufficient to
fund our operations (venture capital and corporate activities) over at least the
next 12 months.  As discussed below

                                       24
<PAGE>


in Part  II,  Item 1 "Legal  Proceedings,"  we are  involved  in  certain  legal
proceedings for which we have incurred and will incur  attorneys' fees and other
costs. The amount of such future fees and costs is currently unknown,  though we
believe that our cash and liquid  resources are sufficient to cover these costs,
in addition to our normal operating expenses, over at least the next 12 months.

     As of March 31, 2006, we had $1.0 million of cash held in escrow related to
our sale of LPA to SunGard as  discussed  above in Note 4 "Cash Held in Escrow."
Due to the legal proceedings  described below in Part II, Item 1, the release of
the escrow amount is currently  uncertain.  We have not made any reserve against
this $1.0 million in cash and accrued interest held in escrow.

     In order to reduce  operating  costs and to conserve  cash, and in light of
the decrease in the size and complexity of our continuing operations, we reduced
our  staffing  levels in early 2005.  After the payment of all related  employee
severance  costs in 2005,  the impact of the staff cost  reductions is now being
fully realized during 2006. We implemented other cost reductions during 2005 and
are continuing to implement further cost reductions in 2006.


Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The nature of our businesses  exposes us to market risk. Market risk is the
risk of loss that may occur when  changes in  interest  rates and public  equity
prices adversely affect the value of invested assets.

Interest Rate Risk

     LPAL is subject to risk from interest rate  fluctuations  when payments due
to  policyholders  are not matched in respect of amount and duration with income
from investments.  LPAL attempts to minimize this risk by ensuring that payments
and income are matched as closely as possible while also  maximizing  investment
returns.  LPAL  has not used  derivative  financial  instruments  as part of its
investment strategy.

     For LPAL's business,  the amount of policyholder  liabilities is unaffected
by  changes in  interest  rates.  Given the  existing  policy and bond  maturity
profiles,  and that bonds will  generally  be held to maturity  and early policy
redemptions  are protected by a market value  adjustment and surrender  penalty,
the bonds and policies carry minimal interest rate risk.

     Interest  income  earned  on cash and cash  equivalents  in LPAL and in the
remainder  of the Group is  expected  to be less than $0.2  million  during  the
remainder of 2006,  therefore movements in market interest rates should not have
a material impact on our consolidated results.

Equity Price Risk

     We are  exposed  to equity  price  risk on our  holdings  of listed  equity
securities. Changes in the level or volatility of equity prices affect the value
of our listed  equity  securities.  These  changes in turn  directly  affect our
consolidated net income (loss) because our holdings of listed equity  securities
are marked to market,  with  changes in their  market  value  recognized  in the
statement of operations for the period in which the changes occur.  These listed
equity  securities  represent  investments  that were originally made as private
equity investments in high technology  companies that subsequently  completed an
initial public offering.  The performance of these listed equity  securities can
be highly volatile; however, we monitor them and seek to sell them over a period
of time.

     In prior years, we held levels of listed equity securities which exposed us
to  significant  equity  price risk and  resulting  volatility  in our  reported
earnings.  By the end of January  2005, we sold all but two of our listed equity
holdings.  As of March 31, 2006, these two listed equity securities had a market
value of $140,000.  At this level,  there is a greatly reduced equity price risk
and fluctuations in the market value of our remaining  listed equity  securities
should not have a material impact on our earnings in future periods.

                                       25
<PAGE>

     As of March 31,  2006,  we held $0.8  million in private  corporate  equity
securities  of  technology  companies  for which  liquid  markets  do not exist.
Private equity prices do not fluctuate directly with public equity markets,  but
significant  market  movements  may  trigger a review  for  other-than-temporary
adjustment of the carrying  values of our private equity  securities.  The risks
inherent in these private equity  investments  relate primarily to the viability
of the  investee  companies.  We try to mitigate  these  risks in various  ways,
including performing extensive due diligence prior to making an investment,  and
regularly reviewing the progress of the investee companies.


Item 4.   CONTROLS AND PROCEDURES

     We maintain  disclosure  controls  and  procedures  designed to ensure that
information  required  to be  disclosed  in our  filings  under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported  within the periods  specified in the rules and forms of the SEC.  Such
information is accumulated and  communicated  to our  management,  including our
chief executive officer and chief financial  officer,  as appropriate,  to allow
timely decisions regarding required  disclosure.  Our management,  including the
chief executive officer and the chief financial officer, recognizes that any set
of controls  and  procedures,  no matter how well  designed  and  operated,  can
provide only reasonable assurance of achieving the desired control objectives.

     As of the end of the period covered by this quarterly  report on Form 10-Q,
we carried out an evaluation,  under the supervision and with the  participation
of our  management,  including our chief  executive  officer and chief financial
officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures.  Based on such evaluation,  our chief executive officer
and  chief  financial  officer  concluded  that  our  disclosure   controls  and
procedures  were effective as of the end of the period covered by this quarterly
report on Form 10-Q.

     There were no changes in our internal  controls  over  financial  reporting
during the quarter ended March 31, 2006 that materially affected,  or that could
reasonably  likely  materially  affect,  our internal  controls  over  financial
reporting.

                                       26
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.   LEGAL PROCEEDINGS

     On February 17, 2005,  SunGard  Business Systems Inc.  ("SunGard")  filed a
lawsuit in the U.S.  District  Court in  Philadelphia  against  the  Company and
certain of its  subsidiaries.  SunGard's  complaint  alleged losses in an amount
equal  to  at  least  $7.2   million   resulting   from   alleged   breaches  of
representations and warranties contained in the May 2003 agreement governing the
sale to SunGard of London  Pacific  Advisors,  our financial  advisory  services
business.

     On April 27, 2005,  we filed a lawsuit  against  SunGard and certain of its
affiliates in California  Superior Court in San Francisco ("the Court") accusing
SunGard of wrongful  conduct and seeking  payment of $1.0 million of the initial
purchase  consideration which is currently held in an escrow account, up to $8.0
million in additional earnout payments,  and further damages for SunGard's prior
wrongful  actions.  We are also  asking  the  Court  to  award us  compensatory,
exemplary and punitive damages.

     We also filed a motion to dismiss, for lack of subject matter jurisdiction,
SunGard's lawsuit against us in Pennsylvania. SunGard then voluntarily dismissed
its federal  action  against us and filed a new complaint in the court of Common
Pleas, Chester County, Pennsylvania.  This new complaint alleges essentially the
same claims  against the same parties that were  contained in SunGard's  federal
action.  Based upon  substantial  document  discovery and  deposition  testimony
already completed,  and ongoing consultation with our legal advisors, we believe
that there is no merit to SunGard's  claims  against us, and we will continue to
vigorously defend ourselves.

     On June 3, 2005,  SunGard filed a motion to dismiss or stay our  California
Superior  Court  action  on  jurisdictional  grounds.  On  July  26,  2005,  the
California court denied SunGard's motion.  On August 25, 2005,  SunGard appealed
that  decision.  Its  appeal was  summarily  denied by the  California  court of
appeals on September 22, 2005. In response, on October 12, 2005, SunGard filed a
motion  seeking  to  dismiss  13 of the 14 claims  contained  in our  California
complaint.  On January 3, 2006, the Court heard this motion and dismissed  three
of our claims,  and allowed us to amend six of our remaining  claims. On January
6, 2006, we lodged an 11-count amended  complaint which amended and supplemented
our claims based upon the  substantial  document  discovery we have now received
from SunGard.  SunGard responded by filing another motion,  this time to dismiss
nine of our 11 claims.  SunGard also sought to seal our amended  complaint  from
public view. On March 1, 2006, the Court heard  SunGard's  motions and dismissed
four of our 11  claims.  The Court  then  ordered  SunGard  to answer  our seven
remaining  claims  within 20 days of its March 14,  2006  order.  The Court also
denied SunGard's motion to seal our amended complaint.

     On April  3,  2006,  we  received  SunGard's  Answer  and  Cross-Complaint,
responding to our Second Amended  Complaint against them. Their Answer generally
denies  our  allegations  and  raises  several   affirmative   defenses.   Their
Cross-Complaint essentially repeats the alleged breach of contract claim brought
in their  Pennsylvania  action,  while  adding  SunGard  Data  Systems Inc. as a
claimant, and essentially repeats their intentional  misrepresentation claim. As
before, we believe  SunGard's  denials and affirmative  defenses are unavailing,
and their claims unjustified.

     On June 10, 2005, we filed a petition to dismiss SunGard's complaint in the
Pennsylvania  court.  That motion was heard on April 26, 2006. The court has not
yet issued a ruling.

     Costs  relating to the above  matters are  recognized  in our  statement of
operations as they are incurred.


Item 1A.   RISK FACTORS

     There are no material changes from the risk factors as previously disclosed
in our Form 10-K for the year ended  December 31, 2005 in response to Item 1A to
Part I of Form 10-K.

                                       27
<PAGE>

Item 6.    EXHIBITS

     The following exhibits are filed herewith:

Exhibit
Number   Description
-------  ----------------

31.1     Certification by the Company's Executive Chairman pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
         Act of 2002.

31.2     Certification  by the Company's Chief Financial Officer pursuant to 18
         U.S.C.  Section 1350, as adopted pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

32.1     Certification by the Company's Executive Chairman pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.

32.2     Certification  by the Company's Chief Financial Officer pursuant to 18
         U.S.C.  Section 1350, as adopted pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002.


                                       28
<PAGE>

                                    SIGNATURE


     Pursuant to the  requirements  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.



                                      BERKELEY TECHNOLOGY LIMITED
                                      (Registrant)

Date:  May 12, 2006                   By:    /s/  Ian K. Whitehead

                                             Ian K. Whitehead
                                             Chief Financial Officer

                                             (Principal Financial and Accounting
                                             Officer and Duly Authorized Officer
                                             of the Registrant)


                                       29
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

               EXHIBIT INDEX FOR THE QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2006

Exhibit
Number   Description
-------  ----------------

31.1     Certification by the Company's Executive Chairman pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
         Act of 2002.

31.2     Certification  by the Company's Chief Financial Officer pursuant to 18
         U.S.C.  Section 1350, as adopted pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002.

32.1     Certification by the Company's Executive Chairman pursuant to 18 U.S.C.
         Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.

32.2     Certification  by the Company's Chief Financial Officer pursuant to 18
         U.S.C.  Section 1350, as adopted pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002.

                                       30