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, 2005 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                       IDENTIFICATION NO.)
             ORGANIZATION)


    6601 OWENS DRIVE, SUITE 115, PLEASANTON, CALIFORNIA            94588
              (ADDRESS OF PRINCIPAL 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, 2005 was 70,707,518.


                 The Exhibit Index is located on page 15 hereof.


                                       1
<PAGE>

                      PART 1, ITEM 1. FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>

                                                                      March 31,     December 31,
                                                                        2005           2004
                                                                     ---------      ---------
                    ASSETS
<S>                                                                  <C>            <C>
Current assets:
   Cash ........................................................     $      39      $      43
   Trade accounts receivable, net of allowance
     for doubtful accounts of $18 ..............................           331            486
   Unbilled revenue ............................................            26              5
   Prepaid expenses and other ..................................            18             34
                                                                     ---------      ---------
     Total current assets ......................................           414            568
   Property and equipment ......................................           446            446
     Less - accumulated depreciation ...........................          (412)          (408)
                                                                     ---------      ---------
   Property and equipment, net .................................            34             38
                                                                     ---------      ---------
     Total assets ..............................................     $     448      $     606
                                                                     =========      =========

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Line of credit ..............................................     $      92      $     218
   Accounts payable ............................................            77             90
   Accrued salaries and other expenses .........................           376            350
                                                                     ---------      ---------
     Total current liabilities .................................           545            658
   Convertible notes payable, net ..............................         1,258          1,258
   Other liabilities ...........................................           101             75
   Commitments and contingencies
Stockholders' equity:
   Common stock, $0 001 par value; 72,000,000 shares authorized;
   15,287,968 (excluding 255,000 shares held in treasury)
   shares issued and outstanding in 2005 and 2004, respectively             16             16
   Additional paid in capital ..................................        99,925         99,925
   Unearned compensation .......................................            (1)
   Treasury stock ..............................................          (118)          (118)
   Accumulated deficit .........................................      (101,279)      (101,207)
                                                                     ---------      ---------
     Total stockholders' equity ................................        (1,456)        (1,385)
                                                                     ---------      ---------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...................     $     448      $     606
                                                                     =========      =========
</TABLE>


See notes to condensed consolidated financial statements.


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED
                                                                              MARCH 31,
                                                                         2005          2004
                                                                      ==========    ==========
<S>                                                                  <C>            <C>
Revenue ........................................................     $     756      $   1,195
Cost of revenue ................................................           573            855
                                                                      ----------    ----------
Gross profit ...................................................           183            340

Operating expenses:
   Selling, general and administrative .........................           219            460
   Depreciation and amortization ...............................             5              4
                                                                      ----------    ----------
    Total operating expenses ...................................           224            464

Loss from operations ...........................................           (41)          (124)

   Interest expense, net .......................................           (31)           (53)
                                                                      ----------    ----------
Loss before tax provision ......................................           (72)          (177)
   Income tax provision
                                                                      ----------    ----------
Net loss .......................................................     $     (72)     $    (177)
                                                                      ==========    ==========
Net loss per share: basic and diluted
    Net loss per share                                                   $ (0 00)   $   (0 01)
                                                                      ==========    ==========
Average shares outstanding: basic and diuted...................       15,287,968    15,287,346
                                                                      ----------    ----------
</TABLE>



See notes to condensed consolidated financial statements.


                                       3
<PAGE>

                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                         ($000'S, EXCEPT PER SHARE DATA)
                    FOR THE THREE MONTHS ENDED MARCH 31, 2005

<TABLE>
<CAPTION>
                                                                         Additional
                                                  Common Stock            Paid In        Unearned
                                             Shares         Amount        Capital       Compensation
                                           ----------     ----------     ----------     ----------
<S>                                        <C>            <C>            <C>            <C>
Balance, December 31, 2004 ...........     15,287,968     $       16     $   99,925     $       (1)
Variable stock options ...............           --             --             --             --
Warrants issued with convertible notes           --             --             --             --
Exercise of stock options ............           --             --             --             --
Amortization of unearned compensation            --             --             --                1
Net loss .............................           --             --             --             --
                                           ----------     ----------     ----------     ----------
Balance, March 31, 2005 ..............     15,287,968     $       16     $   99,925             $-
                                           ==========     ==========     ==========     ==========

<CAPTION>

                                                                           Total
                                            Treasury     Accumulated   Stockholders'  Comprehensive
                                              Stock        Deficit         Equity          Loss
                                           ----------     ----------     ----------     ----------
<S>                                        <C>            <C>            <C>            <C>
Balance, December 31, 2004 ...........     $     (118)    $ (101,207)    $   (1,385)
Variable stock options ...............           --             --             --             --
Warrants issued with convertible notes           --             --             --             --
Exercise of stock options ............           --             --             --             --
Amortization of unearned compensation            --             --                1           --
Net loss .............................           --              (72)           (72)    $      (72)
                                           ----------     ----------     ----------     ----------
Balance, March 31, 2005 ..............     $     (118)    $ (101,279)    $   (1,456)    $      (72)
                                           ==========     ==========     ==========     ==========
</TABLE>



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,
                                                           2005          2004
                                                          -----          -----
Operating activities:


   Net loss ........................................      $ (72)         $(177)
   Adjustments to reconcile net loss to net
    cash provided (used) by operating activities:
   Depreciation and amortization ...................          5             24
   Non cash compensation expense on issuance of
    common stock options and warrants ..............         --              6
   Changes in operating assets and liabilities
    Trade accounts receivable ......................        155             13
    Unbilled revenue ...............................        (21)             8
    Prepaid expenses and other assets ..............         16             50
    Accounts payable ...............................        (13)             7
    Accrued salaries and other expenses ............         26             (7)
    Deferred revenue ...............................         --              6
    Other liabilities ..............................         26             --
                                                          -----          -----
    Net cash provided (used) by operating activities        122            (70)


Investing activities:
   Capital expenditures ............................        --              9
                                                          -----          -----
    Net cash used in investing activities ..........        --              9

Financing activities:
   Net borrowings (payments) under line of credit ..       (126)            39
   Repayments of convertible notes payable .........        --              13
                                                          -----          -----
    Net cash provided (used) by financing activities       (126)            26

Net increase (decrease) in cash ....................         (4)           (53)

Cash:
   Beginning of period .............................         43            125
   End of period ...................................      $  39          $  72
                                                          =====          =====



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 accompanying  unaudited condensed  consolidated financial statements have
   been prepared in accordance with accounting  principles generally accepted in
   the United States of America ("U.S. GAAP") for interim financial  information
   and  the  instructions  to  Form  10-Q  and  Article  10 of  Regulation  S-X.
   Accordingly,  they  do  not  include  all of the  information  and  footnotes
   required by U.S. GAAP for complete  financial  statements.  In the opinion of
   management, all adjustments considered necessary for a fair presentation have
   been  included  in  the  financial  statements.  Operating  results  for  the
   three-month  period ended March 31, 2005, are not  necessarily  indicative of
   the results that may be expected for the year ending  December 31, 2005.  The
   balance  sheet at  December  31,  2004,  has been  derived  from the  audited
   financial statements at that date but does not include all of the information
   and footnotes  required by U.S. GAAP for complete financial  statements.  The
   information  included in this Quarterly Report on Form 10-Q should be read in
   conjunction with "Management's Discussion and Analysis of Financial Condition
   and Results of Operations",  "Quantitative and Qualitative  Disclosures About
   Market Risk" and the  Consolidated  Financial  Statements  and notes  thereto
   included in Items 7, 7A and 8,  respectively,  of the Company's Annual Report
   on Form 10-K for the fiscal year ended December 31, 2004.

   The preparation of the condensed 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  disclosures  of contingent
   assets and liabilities at the date of the condensed financial  statements and
   the reported  amounts of revenues and expenses  during the reporting  period.
   Actual results could differ from these estimates.

   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.  Potentially dilutive securities excluded because of
   their  anti-dilutive  effect are  approximately  7.7  million  shares and 6.8
   million shares at March 31, 2005 and March 31, 2004, respectively.

   Potentially dilutive securities include 40,000 options with an exercise price
   of $1.00 per share issued to the son of Joseph A. Wagda, the Company's former
   CEO  and a  current  director.  Mr.  Wagda's  son  worked  as an  independent
   contractor for the Company on special  projects  during the fourth quarter of
   2000 and the first quarter of 2001.


   Pro forma  disclosures  required under SFAS 148 are presented  below. The pro
   forma  compensation cost may not be representative of that expected in future
   years.

<TABLE>
<CAPTION>
                                                          3 Months Ended March 31,
                                                              2005        2004
                                                             ------      ------
<S>                                                          <C>         <C>
Net loss, as reported ..............................         $ (72)      $(177)
Add: Stock based employee compensation expense
  included in reported income, net of related tax......         --          --
Deduct: Total stock-based employee compensation
        expenses determined under fair value based
        method for all awards, net of related tax
        effects                                                 --          --
                                                             ------      ------

Pro forma net loss .................................         $ (72)      $(177)

Pro forma basic and diluted loss per share:
   Basic - as reported .............................         $(0.00)     $(0.01)
   Basic - pro forma ...............................         $(0.00)     $(0.01)
   Diluted - as reported ...........................         $(0.00)     $(0.01)
   Diluted - pro forma .............................         $(0.00)     $(0.01)
</TABLE>


                                       6
<PAGE>

Compensation cost for the quarter ended March 31, 2005 and 2004 was calculated
in accordance with the binomial model, using the following weighted average
assumptions: (i) expected volatility of 123%; (ii) expected dividend yield of
0%; (iii) expected option term of 10 years; (iv) risk-free rates of return of
2.0% and (v) expected forfeiture rates of 40% for both periods.

2. LIQUIDITY AND CREDIT FACILITY

On December 16, 2002, the Company entered into an agreement with BFI Business
Finance ("BFI"), a Santa Clara, California-based business-credit company, for a
two-year working capital line of credit for $750, to replace our existing credit
facility with Comerica Bank. Under the BFI agreement, available borrowings are
up to 85% of accounts receivable, after reduction for ineligible accounts. The
interest rate on outstanding balances is at prime plus 4% per annum, plus a
monthly administrative fee of 0.50% per month calculated on the average daily
balance outstanding. The minimum monthly interest and administrative fee charged
to the Company was at least $1 per month for the first six months, escalating to
$2 per month for the remaining term of the agreement. The term of the agreement
is stated to be two years and the two year term renews automatically unless
terminated by the Company upon 30 days notice prior to the end of the term. In
December 2004 the agreement between the Company and BFI was automatically
extended for a period of two years. However, BFI has the right to cancel the
agreement at any time on 30 days' prior notice.

The Company's liquidity declined during the past quarter primarily as the result
of the fall off of revenue from the Company's largest customer and expenses
related to the evaluation of its strategic alternatives. On April 14, 2005, the
Company entered into a Stock Purchase Agreement with Stellar McKim LLC
("Stellar"), a financial services and software group (the "Stellar
Transaction"). Pursuant to the Stellar Transaction, the Company filed a
Certificate of Designations creating a new series of Preferred Stock designated
Series A Convertible Preferred Stock ("Series A Preferred Stock") and issued and
sold to Stellar (i) 41,487,929 shares of Common Stock, representing
approximately 57.6% of BrightStar's currently authorized shares for $213 in cash
and (ii) 136,585 shares of Series A Preferred Stock, which are convertible into
482,764,933 shares of the Company's Common Stock, for $137 in cash.
Authorization of the common stock underlying the Series A Preferred Stock issued
to Stellar in the Stellar Transaction is subject to stockholder approval. Upon
such approval and conversion of its Series A Preferred Stock, Stellar will own
94.5% of the common stock of BrightStar, on a fully diluted basis. In addition,
the Series A Preferred Stock has voting rights based on the number of shares of
Common Stock into which it is convertible. Therefore, pursuant to the Stellar
Transaction, Stellar has approximately 94.7% of the voting power held by
stockholders of the Company in all matters upon which stockholders may vote.

Pursuant to the Stellar Transaction, the Company also entered into an Omnibus
Agreement (as amended, the "Omnibus Agreement"), with Stellar, BrightStar
Information Technology Services, Inc. ("Services"), the Company's principal
operating subsidiary, and each holder (each a "Holder" and collectively the
"Holders") of Service's Series 1 Convertible Subordinated Promissory Notes (the
"Notes"), pursuant to which Stellar agreed to acquire all of the Notes from the
Holders for $860. Pursuant to the Omnibus Agreement and the Purchase Agreement,
the warrants that were originally issued in connection with the issuance of the
Notes were cancelled, the conversion feature of the Notes was eliminated, the
maturity of the Notes, as well as the due date for interest accrued at March 31,
2005, was extended until December 31, 2007 and the Company issued 13,869,121
shares of common stock to the Holders.

The Stellar Transaction resulted in a change of control of the Company. As
explained above, upon conversion of the Series A Preferred Stock, Stellar
acquired in the Stellar Transaction, Stellar will own 94.5% of the common stock
of BrightStar on a fully diluted basis.

Pursuant to the terms of the Stellar Transaction, all of the directors of the
Company, other than Joseph A. Wagda, and all of the officers of the Company
resigned effective close of business April 18, 2005. After these resignations,
Ian Scott-Dunne was appointed to the Company's board of directors and elected
chairman. In addition, the board elected Brian Burnett as chief executive
officer, John Coogan as chief financial officer and Deborah Seal as corporate
secretary.

Under present circumstances, the Company 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 2005. 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.


                                       7
<PAGE>


3. ACCOUNTS RECEIVABLE

The majority of the Company's accounts receivable are due from public sector
clients. Credit is extended based on an evaluation of the customers' financial
condition and, generally, collateral is not required. The Company maintains
allowances for doubtful accounts for estimated losses resulting from the
inability of our customers to make required payments. Management regularly
evaluates the allowance for doubtful accounts. The estimated losses are based on
the aging of our receivable balances, a review of significant past due accounts,
and our historical write-off experience, net of recoveries. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances would be required.

4. ACCRUED SALARIES AND OTHER EXPENSES

Accrued salaries and other expenses consist of the following:



                                                    March 31,     December 31
                                                      2005            2004
  Accrued payroll and payroll taxes............    $   138       $     145
  Accrued professional fees....................         57              61
  Other accrued expenses.......................        181             144
            Total accrued expenses.............    $   376       $     350



5. CONVERTIBLE NOTES PAYABLE, NET

On July 26, 2001, the Company completed a private placement through the issuance
of approximately $1,100 of Series 1 Convertible Subordinated Promissory Notes
(the "Notes") with warrants to a group of investors, including members of
BrightStar's senior management. The Notes are secured on a junior basis by
substantially all of the assets of the Company and its operating subsidiaries,
and were previously 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 Notes are entitled to simple interest calculated at a rate per
annum equal to 8%. The Company had the option to pay interest for the first year
from the date of the Notes (subsequently extended for another year during the
second quarter of 2002) by issuing additional Notes (the "PIK Notes") and
warrants with the same terms as above. The Company elected to pay the interest
due on the Notes from inception through June 30, 2003 by issuing PIK Notes
totaling $182 and warrants totaling 118,867. In October 2003, the Company
started paying in cash the quarterly interest due on the Notes and PIK Notes.

The Notes and PIK Notes were originally due and payable on July 1, 2004.
However, the Notes and PIK Notes were amended effective October 24, 2003 to
extend their due date to December 31, 2005 when holders representing more than
75% of the aggregate principal amount of the Notes and PIK Notes agreed to the
extension. As consideration for this amendment the Company agreed to a partial
pay down schedule for the PIK notes, commencing January 2004. The Company agreed
to pay in cash each quarter an amount equal to 50% of the interest then due on
the Notes and PIK Notes and the amounts so paid were applied sequentially to
retire the PIK Notes in the order issued until December 31, 2005. Subsequently,
forbearance agreements were consummated with holders representing more than 75%
of the aggregate principal amount of the Notes and PIK Notes in (i) July 2004
(with respect to interest due for the quarter ended June 30, 2004) and (ii)
October 2004 (with respect to the quarters ended September 30, 2004 and December
31, 2004) to defer the payment of interest for the three quarters ended December
31, 2004 until December 31, 2005. Under the Stellar Transaction described in
Note 2, the conversion feature and warrants related to the Notes and PIK Notes
were extinguished, and the term of the Notes and PIK Notes was extended to, and
all interest accrued on the Notes and PIK Notes as of March 31, 2005 will be
payable on, December 31, 2007.

6. INCOME TAXES

As a result of historical losses, the Company has recorded a valuation allowance
to offset all of its net deferred tax assets recorded at March 31, 2005. The
valuation allowance, which was approximately $11,900 as of December 31, 2004,
relates to deferred tax assets established for net operating loss carryforwards
generated through March 31, 2005 and other temporary differences. The Company
does not expect to recognize tax benefits on prior or future losses or other
temporary differences until such time that it is more likely than not that tax
benefits will be realized by the Company. At December 31, 2004, the Company had
a net operating loss carryforward of approximately $16,156 for federal income
tax purposes, which will expire in years 2019 through 2024. The Stellar
Transaction described in Note 2 is expected to trigger a change in ownership
which will severely limit the use of our tax attributes in the future.


                                       8
<PAGE>



7. NET (LOSS) INCOME PER SHARE

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


<TABLE>
<CAPTION>


                                                                                               Three months ended
                                                                                         March 31,               March 31,
<S>                                                                                         <C>                    <C>
                                                                                            2005                   2004
 Numerator:
 Loss from operations.........................................................      $      (41)               $    (124)
 Net loss.....................................................................      $      (72)               $    (177)

 Numerator for basic earnings per share - loss
   available to common stockholders...........................................              (72)                   (177)
 Effect of dilutive securities:
 None.........................................................................               --                      --
 Numerator for diluted earnings per share - income
   available to common stockholders after assumed conversions.................      $      (72)               $    (177)

 Denominator:
 Denominator for basic earnings per share - weighted average shares                  15,287,968               15,287,346
 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....................................       15,287,968               15,287,346



</TABLE>


(1)  Diluted EPS for the  three-month  period  ended March 31, 2005  excludes
     the  effect  of  approximately  7.7  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. LITIGATION

On January 17, 2005, the Company received service of an action filed by the
State of Texas in the 353d Judicial District of the District Court of Travis
County, Texas (Cause No. GV500031) against the Company and BRBA, Inc., its
former wholly owned subsidiary, for sales taxes, interest, penalties and
attorney fees for the period 1997 through 2004 in the aggregate amount of
$666,387, plus future interest. BRBA, Inc. was liquidated in a chapter 7
proceeding that was completed in 2002 and the Company no longer has any
responsibility for its affairs.

The Company believes that the suit against it was without merit. However, to
avoid the cost and time required to adjudicate this matter, it entered into a
contingent settlement agreement on January 19, 2005 whereby the action against
the Company would be dismissed, provided the State of Texas receives $25,000
from the Company on or before May 12, 2005. The Company made the $25,000 payment
in April 2005.

In addition, the Company is from time to time involved in litigation incidental
to its business. The Company believes that the results of such litigation will
not have a materially adverse effect on the Company's financial condition.

10. SIGNIFICANT CUSTOMERS

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. These three customers
accounted for 40%, 8% and 19%, respectively, of the the Company's total
outstanding accounts receivable balance as of March 31, 2005.


                                       9
<PAGE>


For the first quarter of 2004, the Company had a single customer that accounted
for approximately 70% of total revenue. This customer also accounted for
approximately 58% of the Company's total outstanding accounts receivable balance
as of March 31, 2004.

11.   RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004) "Share-Based Payments"
("SFAS 123R"). SFAS 123R requires measurement of all employee stock-based
compensation awards using a fair value method and the recording of such expenses
in the consolidated financial statements. In addition, the adoption of SFAS 123R
will require additional accounting related to the income tax effects and
additional disclosure regarding the cash flow effects resulting from share-based
payment arrangements. SFAS 123R is effective beginning in the Company's first
quarter of fiscal 2006. The Company is evaluating the requirements of SFAS 123R
and it expects that the adoption of SFAS 123R will have a material impact on the
Company's results of operations and financial condition. The Company has not yet
determined whether the adoption of SFAS 123R will result in a stock-based
compensation charges that are similar to the current pro forma disclosures under
SFAS 123.

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

BrightStar Information Technology Group, Inc. ("BrightStar" or "the Company")
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. We have approximately 20 employees and
contractors. The Company has its operations headquartered in the San Francisco
Bay Area with a field office near Dallas, Texas. We also have other
service-delivery locations throughout the United States, including Arizona,
Arkansas, California, Florida, Oregon and Texas.

The timing of revenue is difficult to forecast because the Company's 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, the Company's engagements generally
can be changed or terminated without a significant customer penalty. The
Company's 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.

Cost of revenue consists primarily of salaries (including non-billable and
training time) and benefits for consultants. 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. As revenues declined over the past
couple of years, the Company reduced its consulting resources accordingly.

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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES


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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 -- The Company provides services to customers for fees that
are based on time and materials or occasionally, fixed fee contracts. Revenue
for fixed fee contracts is recognized ratably over the contract term based on
the percentage-of-completion method. Costs incurred to date as a percentage of
total estimated costs are used to determine the percentage of the contract that
has been completed throughout the contract life. Costs reimbursed by its
customers are included in revenue for the periods in which costs are incurred.

Income taxes -- The Company accounts for income taxes under SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires an asset and liability
approach to accounting for income taxes. The Company provides deferred income
taxes for temporary differences that will result in taxable or deductible
amounts in future years. A valuation allowance is recognized if it is
anticipated that some or all of a deferred tax asset may not be realized. Based
on the Company's net losses for the previous years, the Company has recorded a
valuation allowance for deferred taxes as of March 31, 2005. In the event that
the Company were to determine that it would be able to realize its deferred tax
assets in the future, an asset would be recorded, which in turn would increase
income in the period such determination was made.

RESULTS OF OPERATIONS

Revenue for the first quarter ended March 31, 2005 decreased from $1.2 million
to $0.8 million or 33% compared to the first quarter ended March 31, 2004 as a
result of a reduction in the demand for our services.

Gross profit as a percentage of revenue for the first quarter ended March 31,
2005 decreased from 28% to 24% compared to first quarter ended March 31, 2004 as
a result of consultant cost increases, which were not passed on to our customers
and a change in the mix of services provided to our clients.

LIQUIDITY AND CAPITAL RESOURCES

On December 16, 2002, the Company entered into an agreement with BFI Business
Finance ("BFI"), a Santa Clara, California-based business-credit company, for a
two-year working capital line of credit for $0.75 million, to replace our
existing credit facility with Comerica Bank. Under the BFI agreement, available
borrowings are up to 85% of accounts receivable, after reduction for ineligible
accounts. The interest rate on outstanding balances is at prime plus 4% per
annum, plus a monthly administrative fee of 0.50% per month calculated on the
average daily balance outstanding. The minimum monthly interest and
administrative fee charged to the Company was at least $1,000 per month for the
first six months, escalating to $2,375 per month for the remaining term of the
agreement. The term of the agreement is stated to be two years and the two year
term renews automatically unless terminated by the Company upon 30 days notice
prior to the end of the term. In December 2004 the agreement between the Company
and BFI was automatically extended for a period of two years. However, BFI has
the right to cancel the agreement at any time on 30 days' prior notice.

The Company's liquidity declined during the past quarter primarily as the result
of the fall off of revenue from the Company's largest customer and expenses
related to the evaluation of its strategic alternatives. On April 14, 2005, the
Company entered into a Stock Purchase Agreement with Stellar McKim LLC
("Stellar"), a financial services and software group (the "Stellar
Transaction"). Pursuant to the Stellar Transaction, the Company filed a
Certificate of Designations creating a new series of Preferred Stock designated
Series A Convertible Preferred Stock ("Series A Preferred Stock") and issued and
sold to Stellar (i) 41,487,929 shares of Common Stock, representing
approximately 57.6% of BrightStar's currently authorized shares for
approximately $213,000 in cash and (ii) 136,585 shares of Series A Preferred
Stock, which are convertible into 482,764,933 shares of the Company's Common
Stock, for approximately $137,000 in cash. Authorization of the common stock
underlying the Series A Preferred Stock issued to Stellar in the Stellar
Transaction is subject to stockholder approval. Upon such approval and
conversion of its Series A Preferred Stock, Stellar will own 94.5% of the common
stock of BrightStar, on a fully diluted basis. In addition, the Series A
Preferred Stock has voting rights based on the number of shares of Common Stock
into which it is convertible. Therefore, pursuant to the Stellar Transaction,
Stellar has approximately 94.7% of the voting power held by stockholders of the
Company in all matters upon which stockholders may vote.


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Pursuant to the Stellar Transaction, the Company also entered into an Omnibus
Agreement (as amended, the "Omnibus Agreement"), with Stellar, BrightStar
Information Technology Services, Inc. ("Services"), the Company's principal
operating subsidiary, and each holder (each a "Holder" and collectively the
"Holders") of Service's Series 1 Convertible Subordinated Promissory Notes (the
"Notes"), pursuant to which Stellar agreed to acquire all of the Notes from the
Holders for approximately $860,000. Pursuant to the Omnibus Agreement and the
Purchase Agreement, the warrants that were originally issued in connection with
the issuance of the Notes were cancelled, the conversion feature of the Notes
was eliminated, the maturity of the Notes, as well as the due date for interest
accrued at March 31, 2005, was extended until December 31, 2007 and the Company
issued 13,869,121 shares of common stock to the Holders.

The Stellar Transaction resulted in a change of control of the Company. As
explained above, upon conversion of the Series A Preferred Stock, Stellar
acquired in the Stellar Transaction, Stellar will own 94.5% of the common stock
of BrightStar on a fully diluted basis.

Under present circumstances, the Company 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 2005. 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.

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the information previously reported
under Item 7A of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2004. Refer to the Company's Annual Report on Form 10-K for
the year ended December 31, 2004 for more details.

ITEM 4. CONTROLS AND PROCEDURES


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(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.

                         PART II - OTHER INFORMATION

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, 2004.  Refer to the Company's  Annual Report
   on Form 10-K for the year ended December 31, 2004 for more details.


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.


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                                  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 16, 2005.                 BY: /s/ Brian Burnett
                                        Brian Burnett
                                        Chairman and Chief Executive Officer


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<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