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

                                   FORM 10-QSB

(MARK ONE)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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: 000-23889

                                 ---------------

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

          DELAWARE                                          76-0553110
(STATE OF OTHER JURISDICTION OF                          (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

       6160 STONERIDGE MALL ROAD, SUITE 250, PLEASANTON, CALIFORNIA 94588
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (925) 251-0000

                                 ---------------

      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|.

      The number of shares of Common Stock of the Registrant, par value $.001
per share, outstanding at April 30, 2006 was 209,707,518.

      Transitional Small business Disclosure Format (Check one): Yes |_|; No
|X|.
                                       1
<PAGE>

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                       INDEX TO MARCH 31, 2006 FORM 10-QSB

                                                                         Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)

Balance Sheet - March 31, 2006                                                 3

Statements of Operations -
  For the three months ended March 31, 2006 and March 31, 2005                 4

Statements of Cash Flows -
  For the three months ended March 31, 2006 and March 31, 2005                 5

Notes to Financial Statements                                                  6

Item 2 - Management's Discussion and Analysis
  of Results of Operations and Financial Condition                            11

Item 3 - Controls and Procedures                                              14

PART II - OTHER INFORMATION
Item 1 - Legal Proceedings                                                    15

Item 2 - Unregistered Sales of Equity Securities
  and Use of Proceeds                                                         15

Item 3 - Defaults Upon Senior Securities                                      15

Item 4 - Submission of Matters to a Vote of Security Holders                  15

Item 5 - Other information                                                    15

Item 6 - Exhibits                                                             15

Signature Page                                                                16

             "SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE
                    SECURITIES LITIGATION REFORM ACT OF 1995
Statements that are not historical facts contained in this Quarterly Report on
Form 10-QSB are forward looking statements that involve risk and uncertainties
that could cause actual results to differ from projected results. The words
"anticipate," "believe," "estimate," "expect," "plan," "intend" and similar
expressions, as they relate to us, are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and assumptions. We
cannot assure you that any of our expectations will be realized. Factors that
may cause actual results to differ materially from those contemplated by such
forward-looking statements include, without limitation, the timing of
development of the areas where we may sell our services, the market price of our
services and products, changes in applicable statutory and regulatory
requirements, costs of delivery of our products and services, the strength and
financial resources of our competitors, our ability to find and retain skilled
personnel, labor relations, the results of financing efforts and the ability to
meet capital requirements, and general economic conditions.

                                       2
<PAGE>

                      PART 1, ITEM 1. FINANCIAL STATEMENTS

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
                         ($000'S, EXCEPT PER SHARE DATA)

                                                                       UNAUDITED
                                                                       MARCH 31,
                                                                         2006
                                                                       ---------
                                           ASSETS
Current assets:


Cash                                                                         $63
Trade accounts receivable, net of allowance
   for doubtful accounts of $3                                               314
Prepaid expenses and other                                                    66
                                                                       ---------
   Total current assets
                                                                             443
Property and equipment, net                                                   64
In-place contract                                                          1,027
Customer list                                                                840
Other intangible assets                                                      386
                                                                       ---------
   Total assets                                                           $2,760
                                                                       =========

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

     Line of credit                                                          $3
     Accounts payable                                                        76
     Accrued salaries and other expenses                                    329
     Payable to affiliate                                                   215
     Liability for shares issuable in Neulogic acquisiton                   210
     Deferred revenue                                                       424
                                                                      ---------
        Total current liabilities                                         1,257
     Convertible notes payable to affiliate                               1,800
     Notes payable to affiliate                                           1,258
     Other liabilities - payable to affiliate                               101
     Commitments and contingencies                                         --
Stockholders' equity:
     Preferred stock, $0.001 par value; 3,000,000 shares authorized;
     136,585 shares issued and outstanding in 2006                         --
     Common stock, $0.001 par value; 747,000,000 shares authorized;
     70,707,518 shares issued and outstanding in 2006                        71
     Additional paid-in capital                                         100,305
     Accumulated deficit                                               (102,032)
                                                                      ---------
        Total stockholders' equity                                       (1,656)
                                                                      ---------
                         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $2,760
                                                                      =========
See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                         ($000'S, EXCEPT PER SHARE DATA)

                                                          THREE MONTHS ENDED
                                                               MARCH 31,
                                                        ------------------------
                                                           2006         2005
                                                        ----------   ----------
Revenue                                                       $822         $756
Cost of revenue                                                515          573
                                                        ----------   ----------
Gross profit                                                   307          183

Operating expenses:

     Selling, general and administrative                       447          219
     Depreciation and amortization                              90            5
                                                        ----------   ----------
        Total operating expenses
                                                               537          224

Loss from operations                                          (230)         (41)

     Interest expense, net                                     (73)         (31)
                                                        ----------   ----------
Loss before tax provision                                    $(303)        $(72)

     Income tax provision                                     --           --
                                                        ----------   ----------
Net loss                                                     $(303)        $(72)
                                                        ==========   ==========
Net loss per share: basic and diluted
                                                        ----------   ----------
        Net loss per share                                  $(0.00)      $(0.00)
                                                        ==========   ==========

Average shares outstanding: basic and diluted           70,707,518   15,287,968
                                                        ----------   ----------

See notes to condensed consolidated financial statements.

                                       4
<PAGE>

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         ($000'S, EXCEPT PER SHARE DATA)

                                                            THREE MONTHS ENDED
                                                          ----------------------
                                                          MARCH 31,   MARCH 31,
                                                             2006       2005
                                                          ---------   ---------
Operating activities:

     Net loss                                             $    (303)  $     (72)
     Adjustments to reconcile net loss to net
        cash provided (used) by operating activities:
     Depreciation and amortization                               90           5
     Changes in operating assets and liabilities
        Trade accounts receivable                               (28)        155
        Unbilled revenue                                         --         (21)
        Prepaid expenses and other assets                       (32)         16
        Accounts payable                                         57         (13)
        Accrued salaries and other expenses                     104          26
        Deferred revenue                                         63          --
        Other liabilities                                        --          26
                                                          ---------   ---------
        Net cash provided (used) by operating activities        (49)        122

Investing activities:
     Acquistions, net                                        (1,800)         --
                                                          ---------   ---------
        Net cash used in investing activities                (1,800)         --

Financing activities:
     Net borrowings (payments) under line of credit            (148)       (126)
     Proceeds from convertible notes payable                  1,800          --
                                                          ---------   ---------
        Net cash provided (used) by financing activities      1,652        (126)

Net decrease in cash                                           (197)         (4)

Cash:
     Beginning of period                                        260          43
                                                          ---------   ---------
     End of period                                              $63         $39
                                                          =========   =========
Supplemental Disclosure:
     Interest paid                                        $       7   $       7
     Non cash acquisiton consideration                    $     210   $       -

See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    ($000'S, EXCEPT SHARE AND PER SHARE DATA)



1.    BASIS OF PRESENTATION


      The balance sheet as of March 31, 2006, the statements of operations for
the three ended March 31, 2006 and March 31, 2005, respectively, and the
statements of cash flows for the three months ended March 31, 2006 and March 31,
2005 have been prepared by the Company and have not been audited. In the opinion
of management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position, results of operations and
cash flows at March 31, 2006 and for all periods presented have been
appropriately made.

      Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's fiscal year
2005 Annual Report on Form 10-K. The results of operations for interim periods
presented are not necessarily indicative of the operating results for the full
year.

2.    ACQUISITIONS


      In January 2006, the Company acquired all of the assets and operations of
privately held Neulogic Media, LLC ("Neulogic"). Neulogic provides
e-communication solutions which include website development and support, content
distribution, e-mail marketing and back office integration to the philanthropic
community. Neulogic was acquired to introduce new products and services to
BrightStar customers. The Condensed Consolidated Financial Statements include
the operating results of Neulogic from the date of acquisition.

      The purchase price of approximately $2.0 million consisting of cash of
$1.8 million and stock preliminarily valued at $210,000, was accounted for as
business combination and allocated to the acquired assets and other identified
intangibles, as follows (in thousands):

                Fair value of assumed liabilities         $(326)
                Identified intangible assets acquired:
                In place contracts and customer list      1,936
                Tradename                                   150
                Developed software                          250
                                                        -------
                Total                                    $2,010
                                                        =======

      The Company has recorded $210 thousand as Liability for shares issuable in
Neulogic acquisition for the value of the 139,000,000 shares of common stock
common stock associated with the Neulogic acquisition as the common stock was
not issued by the end of the reporting period. The value of $210 thousand was
estimated based on the April 2005 purchase of the Company by Stellar McKim LLC,
this amount could change during the allocation period based on independent
valuation of the consideration given or the assets received. Management is
presently evaluating the assets acquired and liabilities assumed and such
amounts could change during the allocation period.

      The valuation of in place contracts, customer list, trade name and
developed software represent the fair value of these assets as determined by
management, based on a preliminary valuation which could change during the
allocation period. All intangible assets are being amortized on a straight-line
basis over the estimated useful life of seven years.

                                       6
<PAGE>

      Selected unaudited pro forma combined consolidated statement of
operations, as if the transaction had occurred at the beginning of the periods
reported:

                                              Three months ended
                                            March 31,     March 31,
                                              2006            2005
                                           -----------   ------------
        Revenues                                   822            956
        Gross profit                               307            346
        Gross profit margin                         37%            36%

        Net loss                                  (303)          (139)

        Net loss per share                      $(0.00)        $(0.00)
        Weighted average number of shares  209,707,518    154,287,968

3.    INTANGIBLE ASSETS

      In January 2006, the Company completed the acquisition of Neulogic (See
Note 2) in the first quarter of 2006. Upon the integration of Neulogic,
BrightStar created a separate division named Neulogic, Inc., and assigned all
operations and assets to Neulogic, Inc.

      The following is a summary of the Company's purchased intangible assets as
of March 31, 2006 (in thousands):

                                      Estimated
                          Gross         Useful                       Net
                         Carrying        Life      Accumulated     Carrying
                          Amount      (in years)   Amortization     Value
                       ------------  ------------  ------------  ------------
  In place contracts   $      1,065             7  $         38  $      1,027

   Customer list                871             7            31           840

   Tradename                    150             7             5           145

   Developed software           250             7             9           241
                       ------------  ------------  ------------  ------------
                       $      2,336                $         83  $      2,253
                       ============  ============  ============  ============

      Estimated future amortization expense for purchased intangible assets as
of March 31, 2006 is as follows (in thousands):

                       2006                    $      249
                       2007                           334
                       2008                           334
                       2009                           334
                       2010                           334
                       2011                           334
                       2012                           334
                                               ----------
                                               $    2,253
                                               ==========


                                       7
<PAGE>

4.    ACCRUED SALARIES AND OTHER EXPENSES

      Accrued salaries and other expenses consist of the following:

                                                         March 31,
                                                           2006
                                                        ----------
             Accrued payroll and payroll taxes          $       75
             Accrued professional fees                          64
             Accrued interest                                  141
             Other accrued expenses                             49
                                                        ----------
                       Total accrued expenses           $      329
                                                        ==========

5.    RELATED PARTY TRANSACTIONS

      At March 31, 2006, the Company had various balances due to Stellar, its
majority shareholder, including notes payable, accrued interest and liabilities
related to operating cash advances. Additionally, during 2006, members of
Stellar's management provided executive management services to the Company
without charge.

      At March 31, 2006, significant balances with Stellar were (in thousands):

                                                            MARCH 31,
                                                              2006
                                                           ----------
          Accrued liabilities due to Stellar, net          $      431
          Long term notes payable to Stellar
                                                                1,258
          Long term other liabilities to Stellar
                                                                  101
          Convertible note payable to Stellar                   1,800
                                                           ----------
                                                           $    3,590
                                                           ----------

6.    CONVERTIBLE NOTE PAYABLE, NET

      On January 4, 2006, the Company borrowed $1.8 million from Stellar McKim
LLC, which owns 94.7% of the outstanding voting power of the Company. The loan
was evidenced by a Promissory Note, dated as of January 4, 2006, and is payable
on January 4, 2009. Interest on the outstanding balance of the note accrues at
the rate of 9% per annum and is payable annually commencing on the first
anniversary of the date of the note. All amounts due under the note are payable,
at the option of the Company, in cash or in shares of BrightStar Stock. In the
event that we elect to pay amounts due under the note in shares of BrightStar
Stock, the shares shall be valued at the average trading price of our common
stock for the 20 days immediately preceding the date of payment. No beneficial
conversion feature has been recognized in connection with this borrowing, as the
conversion price if the company elects to settle in stock is based on the fair
value at conversion. All of the proceeds of the loan were paid to the principals
of Neulogic.

7.    NET LOSS PER SHARE


      Basic income (loss) per share is based upon the weighted average number of
common shares outstanding during the period. Diluted income (loss) per share is
computed using the weighted average number of common shares and potentially
dilutive securities outstanding during the period. Potentially dilutive
securities include incremental common shares issuable upon the exercise of stock
options and warrants and conversion of notes payable. Potentially dilutive
securities are excluded from the computation if their effect is anti-dilutive.

      The following table sets forth the computation of basic and diluted
earnings per share:

                                       8
<PAGE>

                                                                  THREE MONTHS
                                                                     ENDED
                                                                 MARCH 31, 2005
                                                                 --------------
Numerator:
Loss from operations                                             $         (230)
                                                                 ==============
Net loss                                                         $         (303)
                                                                 ==============

Numerator for basic earnings per share - loss
  available to common stockholders                                         (303)
Effect of dilutive securities:
None                                                                       --
                                                                 --------------
Numerator for diluted earnings per share - income
  available to common stockholders after assumed conversions     $         (299)
                                                                 --------------
Denominator:
Denominator for basic earnings per share - weighted average
 shares                                                              70,707,518
Effect of dilutive securities:
Employee stock options and other dilutive securities (1)                   --
                                                                 --------------
Denominator for diluted earnings per share - adjusted weighted-
   average shares and assumed conversions                            70,707,518
                                                                 --------------

(1)   Diluted EPS for the three-month period ended March 31, 2006 excludes the
      effect of approximately 483.7 million common shares potentially issuable
      upon the exercise of stock options and warrants and the conversion of
      notes payable, as their inclusion would be anti-dilutive.

8.    SIGNIFICANT CUSTOMERS

      For the first quarter of 2006, the Company had a single customer that
accounted for 48% of total revenue. This customer also accounted for
approximately 26% of the Company's total outstanding accounts receivable balance
as of March 31, 2006. In addition, the Company had two customers which accounted
for 13% and 10%, respectively, of the Company's total outstanding accounts
receivable balance as of March 31, 2006.

      For the first quarter of 2005, the Company had a single customer that
accounted for 42% of total revenue. This customer also accounted for
approximately 14% of the Company's total outstanding accounts receivable balance
as of March 31, 2005. In addition, the Company had one customer that accounted
for 19%, and two customers that each accounted for 12% of total revenue.

9.    RECENTLY ISSUED ACCOUNTING STANDARDS

      Effective January 1, 2006, the Company adopted Statement of Financial
Accounting Standards ("FAS") No. 123 (Revised 2004), Share-Based Payment ("FAS
123R"), which requires the measurement and recognition of compensation expense
for all share-based payment awards made to employees and directors, including
stock options, employee stock purchases related to the employee stock purchase
plan and restricted stock units based on estimated fair values of these awards
over the requisite employee service period. FAS 123R supersedes Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB
25"), which the Company previously followed in accounting for stock-based
awards. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB
107") to provide guidance on FAS 123R. The Company has applied SAB 107 in its
adoption of FAS 123R.

      Under FAS 123R, stock-based compensation cost is measured at the grant
date, based on the estimated fair value of the award, and is recognized on a
straight-line basis as expense over the employee's requisite service period. The
Company has no awards with market or performance conditions. The Company adopted
the provisions of FAS 123R on January 1, 2006, the first day of the Company's
fiscal year 2006, using the modified prospective application. The valuation
provisions of FAS 123R apply to new awards and to awards that are outstanding on
the effective date and subsequently modified or cancelled, prior periods are not
revised for comparative purposes. Estimated compensation expense for awards
outstanding on the effective date will be recognized over the remaining service
period using the compensation cost calculated for pro forma disclosure under
FASB Statement No. 123, "Accounting for Stock-Based Compensation" (FAS 123).

      For the three months ended March 31, 2006, the Company recognized an
immaterial amount as a result of the adoption of FAS 123R. As of March 31, 2006,
compensation expense for all unvested stock options had been recognized by the
Company.

                                        9
<PAGE>

      In February 2006 the Financial Accounting Standards Board issued Statement
No. 155 ("SFAS No 155"), "Accounting for Certain Hybrid Instruments: An
Amendment of FASB Statements No. 133 and 140". Management does not believe that
this statement will have a significant impact as the company does not use such
instruments.

10.   COMMITMENTS AND CONTINGENCIES

      The Company leases office space under an operating lease agreement that
expires in September 2008. Minimum future commitments under this agreement for
the years ending December 31 are: 2006, $35; 2007, $46; and 2008, $35.

      The Company has recorded $210 thousand as Liability for shares issuable in
Neulogic acquisition for the value of common stock associated with the Neulogic
acquisition as the common stock was not issued by the end of the reporting
period, see Note 2 for detail.

11.   SUBSEQUENT EVENTS

      On April 13, 2006, the Company issued 139,000,000 shares of common stock
pursuant to the Purchase of Assets and Sale Agreement with Neulogic Media, LLC,
dated October 31, 2005. The shares constitute approximately 20% of the total
outstanding shares of the Company on a fully diluted basis.

                                       10
<PAGE>

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

FORWARD-LOOKING INFORMATION - Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements, other than
statements of historical facts, included in this MD&A regarding the Company's
financial position, business strategy and plans and objectives of management of
the Company for future operations are forward-looking statements. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of uncertainties and other factors, many of
which are outside of the Company's control, that could cause actual results to
materially differ from such statements. While the Company believes that the
assumptions concerning future events are reasonable, it cautions that there are
inherent difficulties in predicting certain important factors, especially the
timing and magnitude of technological advances; the prospects for future
acquisitions; the possibility that a current customer could be acquired or
otherwise be affected by a future event that would diminish their information
technology requirements; the competition in the information technology industry
and the impact of such competition on pricing, revenues and margins; the degree
to which business entities continue to outsource information technology and
business processes; uncertainties surrounding budget reductions or changes in
funding priorities of existing government programs and the cost of attracting
and retaining highly skilled personnel.

OVERVIEW

      BrightStar Information Technology Group, Inc. ("BrightStar" or "the
Company"), founded in April 1998, provides information technology ("IT")
services for its customers. We help organizations maximize their competitive
advantage through the implementation and /or support of leading edge
enterprise-level packaged-systems applications and legacy software systems by
focusing primarily on serving clients in government markets. BrightStar also
provides software support and training services to major corporations and
recently entered the philanthropic market with the acquisition of Neulogic. We
have approximately 30 employees and contractors. The Company has its
headquarters in the San Francisco Bay Area with a field office near Dallas,
Texas and Columbus, Ohio. We also have other service-delivery locations
throughout the United States, including Arizona, Arkansas, California, Florida
and Texas.

      We generate the vast majority of our revenue from two channels: (1) IT
services provided to the commercial and (2) philanthropic markets. We derive
most of our revenues from the sales of IT services in the United States, our
domestic market.

Acquisition of Neulogic Media, LLC. In January 2006, we acquired all of the
assets and operations of privately held Neulogic Media, LLC ("Neulogic").
Neulogic provides e-communication solutions which include website development
and support, content distribution, e-mail marketing and back office integration
to the philanthropic community. Under the terms of the purchase agreement, we
agreed to purchase Neulogic for approximately $2.0 million. The Consolidated
Financial Statements include the operating results of Neulogic from the date of
acquisition. See notes 2 and 3 for further information.

Financial highlights. Net revenues for the three months ended March 31, 2006 was
$0.8 million, consistent with the three months ended March 31, 2005. While
revenues remained flat, they were driven by a reduction in the demand for our
Enterprise Resource Planning ("ERP") services offset revenues generated by our
acquisition of Neulogic. Our operating expenses for the three months ended March
31, 2006 were $0.4 million as compared to $0.2 million for the three months
ended March 31, 2005. The increase in operating expenses primarily resulted from
increases in sales and marketing expenses, as further described below. We expect
our spending for the remainder of fiscal 2006 to increase as compared to 2005 as
we expand our sales and marketing programs and invest in our organizational
infrastructure.

RESULTS OF OPERATIONS

      Revenues. The timing of revenues is difficult to forecast because our
sales cycle can be relatively long and is subject to a number of uncertainties,
including customers' budgetary constraints, the timing of customers' budget
cycles, customers' internal approval processes and general economic conditions.
In addition, as is customary in the industry, our engagements generally can be
changed or terminated without a significant customer penalty. Our revenue and
results of operations may fluctuate significantly from quarter to quarter or
year to year because of a number of factors, including, but not limited to,
changes in demand for IT services, the effect of changes in estimates to
complete fixed fee contracts, the rate of hiring and the productivity of revenue
generating personnel, the availability of qualified IT professionals, the
significance of customer engagements commenced and completed during a quarter,
the number of business days in the quarter, changes in the relative mix of the
Company's services, changes in the pricing of the Company's services, the timing
and the rate of entrance into new geographic or IT specialty markets, departures
or temporary absences of key revenue-generating personnel, the structure and
timing of acquisitions, and general economic factors.


                                       11
<PAGE>

      Revenues for the first quarter ended March 31, 2006 were $0.8 million,
consistent with the first quarter ended March 31, 2005. Decreases in our
commercial IT services resulting from a reduced demand for our enterprise
resource planning consulting services were offset by the acquisition of Neulogic
and our entry into the philanthropic market place.

      Cost of revenues. Cost of revenues consists primarily of salaries
(including non-billable and training time) and benefits for consultants and
employees. The Company generally strives to maintain its gross profit margins by
offsetting increases in salaries and benefits with increases in billing rates,
although this is subject to the market conditions at the time. In addition, the
Company tries to increase or decrease the number of consultants used by the
Company to provide its services, including third party contractors, as the
amount of billable work (and resultant revenue) changes. In other words, the
Company continually strives to minimize the amount of unbillable consulting
resources or bench.

      Gross profit as a percentage of revenue for the first quarter ended March
31, 2006 increased from 25% to 38% compared to first quarter ended March 31,
2005, primarily reflecting the inclusion of a full quarter of Neulogic's
operations and change in the mix of services provided to our clients.

      Selling, general and administrative expenses. Selling, general and
administrative expenses (SG&A) primarily consist of costs associated with (i)
corporate overhead, (ii) sales and account management, (iii) telecommunications,
(iv) human resources, (v) recruiting and training, and (vi) other administrative
expenses.

      Selling, general and administrative expenses for the first quarter ended
March 31, 2006 increased from $0.2 million to $0.4 million or 100% compared to
the first quarter ended March 31, 2005, primarily as a result of the acquisition
of Neulogic and increased general and administrative services provided to our
business, mainly in the areas of sales and marketing, research and development
and general corporate administration.

LIQUIDITY AND CAPITAL RESOURCES

      Historically, we have funded our operations with the proceeds from debt
and from cash generated from operations. As of March 31, 2006, we had $0.1
million of cash and cash equivalents. We had an accumulated deficit of
approximately $102.0 million as of March 31, 2006.

      Net cash used in operating activities totaled $49 thousand for the three
months ended March 31, 2006 as compared to cash provided by operations of $122
thousand for the three months ended March 31, 2005. Net cash used in operating
activities for the three months ended March 31, 2006 resulted primarily from
operating losses and increases in deferred revenue and accrued expenses, as a
result of including Neulogic's operations for a full quarter. For the three
months ended March 31, 2005, net cash provided by operating activities resulted
primarily from increases in accounts receivable.

      Net cash used in investing activities totaled $1.8 million for the three
months ended March 31, 2006 as compared to no investing activities the three
months ended March 31, 2005. For the three months ended March 31, 2006, net cash
used in investing activities resulted from the acquisition of Neulogic. There
were no investing activities for the three months ended March 31, 2005.

      Net cash provided by financing activities was $1.7 million for the three
months ended March 31, 2006, as compared to cash used in financing activities of
$126 thousand for the three months ended March 31, 2005. For the three month
periods ended March 31, 2006, net cash provided by financing activities
consisted of proceeds from the issuance of convertible notes payable partially
offset by payments on debt obligations related to the receivables-based
revolving line of credit. For the three months ended March 31, 2005, net cash
used in financing activities related to payments on debt obligations related to
the receivables-based revolving line of credit.

      In December 2002, we negotiated a $750 thousand revolving line of credit
based on domestic accounts receivable which accrues interest at a rate of 4%
above prime. Accessing the accounts receivable based revolving line of credit is
restricted based on qualifying accounts receivable and compliance with certain
loan covenants. As of March 31, 2006 the credit facility had an outstanding
balance of $3 thousand.

                                       12
<PAGE>

Series 1 Subordinated Promissory Notes (the "Notes")

      We have $1.3 million in 8% subordinated notes due in December 2007. On
July 26, 2001, we raised $1.1 million though a private placement of convertible
promissory notes. The Notes are secured on a junior basis by substantially all
of the assets of the Company and its operating subsidiaries, and were
convertible into common stock, at the option of the investors, at a fixed price
of $0.23 per share, subject to anti-dilution provisions. The Company paid
interest from inception through June 30, 2003 by issuing additional Notes. The
Company also issued a total of 836,867 stock warrants in conjunction with the
Notes exercisable at $0.50.

      In April 2005, under the terms of the Stellar Transaction, the Notes
became payable to Stellar McKim LLC, the convertible features of all Notes were
eliminated, all warrants associated with the Notes were cancelled and the terms
of the notes and all interest accrued on the Notes as of March 31, 2005 were
extended to December 31, 2007.

      On January 4, 2006, we borrowed $1.8 million from Stellar McKim LLC. The
loan was evidenced by a Promissory Note, dated as of January 4, 2006, and is
payable on January 4, 2009. Interest on the outstanding balance of the note
accrues at the rate of 9% per annum and is payable annually commencing on the
first anniversary of the date of the note. All amounts due under the note are
payable, at our option, in cash or in shares of our common stock. In the event
that we elect to pay amounts due under the note in shares of our common stock,
the shares shall be valued at the average trading price of our common stock for
the 20 days immediately preceding the date of payment. All of the proceeds of
the loan were paid to the principals of Neulogic.

      Under present circumstances, we believes that its planned results from
operations, when combined with the proceeds from the Stellar transaction and
proceeds available from the BFI credit facility, or any alternative working
capital facility, will be adequate to fund its operations at least through the
end of 2006. However, our operating results could be worse than we are
expecting, or the BFI credit facility or other credit facility could be
canceled. Under such circumstances, without additional financing, there can be
no assurance that the Company would have sufficient cash available to meet our
obligations as they come due in order to continue as a going concern.

CRITICAL ACCOUNTING POLICIES

      Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses BrightStar's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States for interim financial information. The preparation of these
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. On an
on-going basis, management evaluates its estimates and judgments. Management
bases its estimates and judgments on historical experience and on various other
factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying value of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.

      Management believes the following critical accounting policies, among
others, affect its more significant judgments and estimates used in preparation
of its consolidated financial statements.

Revenue recognition

      We provide services to customers for fees that are based on time and
materials and fixed fee contracts. Accordingly, revenue is recognized as
consulting services are performed. Unbilled revenue is recorded for contract
services provided for which billing has not been rendered. Costs reimbursed by
its customers are included in revenue for the periods in which the costs are
incurred.

      Also, we enter into arrangements to sell products, services, and other
arrangements (multiple element arrangements) that include combinations of
products. Revenue from product sales and services, net of discounts, is
recognized provided that persuasive evidence of an arrangement exists, delivery
has occurred, the price is fixed or determinable, and collectibility is
reasonably assured. Service revenues are recorded when completed. Deferred
revenue primarily represents the excess of amounts billed over contract amounts
earned. Other multiple element arrangements require delivery of services in the
future. We use objective evidence of fair value to allocate revenue to the
elements and recognize revenue when the criteria for revenue recognition have
been met for each element. Revenue is deferred on the undelivered element based
on estimated service periods and recognized when service delivery occurs.
Deferred revenues associated with annual fees are recognized over the one year
service period.

                                       13
<PAGE>

Income taxes

      Income taxes are recorded under the liability method, under which deferred
tax assets and liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.

      Stock-based compensation

      Effective January 1, 2006, the Company adopted Statement of Financial
Accounting Standards ("FAS") No. 123 (Revised 2004), Share-Based Payment (FAS
123R), which requires the measurement and recognition of compensation expense
for all share-based payment awards made to employees and directors, including
stock options, employee stock purchases related to the employee stock purchase
plan and restricted stock units based on estimated fair values of these awards
over the requisite employee service period. FAS 123R supersedes Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB
25"), which the Company previously followed in accounting for stock-based
awards. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB
107") to provide guidance on FAS 123R. The Company has applied SAB 107 in its
adoption of FAS 123R.

      Under FAS 123R, stock-based compensation cost is measured at the grant
date, based on the estimated fair value of the award, and is recognized on a
straight-line basis as expense over the employee's requisite service period. The
Company has no awards with market or performance conditions. The Company adopted
the provisions of FAS 123R on January 1, 2006, the first day of the Company's
fiscal year 2006, using the modified prospective application. The valuation
provisions of FAS 123R apply to new awards and to awards that are outstanding on
the effective date and subsequently modified or cancelled, prior periods are not
revised for comparative purposes. Estimated compensation expense for awards
outstanding on the effective date will be recognized over the remaining service
period using the compensation cost calculated for pro forma disclosure under
FASB Statement No. 123, "Accounting for Stock-Based Compensation" (FAS 123).

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. Our chief executive
officer and our chief financial officer, after evaluating the effectiveness of
the company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Rules 13a-15e and
15d-15e) as of the end of the period covered by this report (the "Evaluation
Date"), have concluded that, as of the Evaluation Date, our disclosure controls
and procedures were adequate based on the evaluation of these controls and
procedures required by paragraph (b) of the Exchange Act Rules 13a-15 or 13d-15.

(b) Changes in internal controls. During our last fiscal quarter, there was no
change in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect our internal control over
financial reporting.

                                       14
<PAGE>

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

      There have been no material changes from the information previously
reported under Item 3 of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2005. Refer to the Company's Annual Report on Form 10-K
for the year ended December 31, 2005 for more details.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None

ITEM 5. OTHER INFORMATION

      None

ITEM 6. EXHIBITS

      (a) Exhibits

      31.1 - Certification of Chief Executive Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.

      31.2 - Certification of Chief Financial Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.

      32.1 - Certification of Chief Executive Officer pursuant to 18 U.S.C.
      Section 1360.

      32.2 - Certification of Chief Financial Officer pursuant to 18 U.S.C.
      Section 1360.

                                       15
<PAGE>

                                   SIGNATURES

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

                                   BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.

Date: May 15, 2006.                BY: /s/ Brian S. Burnett
                                       -----------------------------------------
                                       Brian S. Burnett
                                       Chairman and Chief Executive Officer

                                       16
<PAGE>

                                INDEX TO EXHIBITS

EXHIBIT
NUMBER           DESCRIPTION

31.1 -           Certification of Chief Executive  Officer pursuant to Section
                 302 of the  Sarbanes-Oxley  Act of 2002.

31.2 -           Certification of Chief Financial Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002

32.1 -           Certification of Chief Executive Officer pursuant to 18 U.S.C.
                 Section 1360

32.2 -           Certification of Chief Financial Officer pursuant to 18 U.S.C.
                 Section 1360

                                       17