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


                                  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 JUNE 30, 1998
                                       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.)

      10375 RICHMOND AVENUE, SUITE 1620
                HOUSTON, TEXAS                                      77042
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                   (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 361-2500

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

         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 .

         The number of shares of Common Stock of the Registrant, par value $.001
per share, outstanding at June 30, 1998, was 7,746,199. The number of shares of
Restricted Common Stock of the Registrant, par value $.001 per share,
outstanding at June 30, 1998, was 242,760.

*        The Registrant became subject to the reporting requirements of Section
         13 of the Securities Exchange Act of 1934 on April 16, 1998.

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





<PAGE>   2

ITEM 1.      FINANCIAL STATEMENTS

GENERAL INFORMATION - The following historical consolidated financial statements
of BrightStar Information Technology Group, Inc. (the "Company" or "BrightStar")
are the historical financial statements of Brian R. Blackmarr and Associates,
Inc. ("Blackmarr"), which became a wholly owned subsidiary of BrightStar in
April 1998, and has been identified as the "accounting acquirer" for
BrightStar's financial reporting purposes in connection with the purchase
acquisitions described in Notes 1 and 2 to the following financial statements.

         BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,         JUNE 30,
ASSETS                                                                                    1997              1998
                                                                                      ------------      ------------
<S>                                                                                   <C>               <C>         
CURRENT ASSETS:
  Cash and cash equivalents                                                           $      2,994       $ 11,616,466
  Trade accounts receivable, net of allowance for doubtful accounts
    of $451,534 and $652,381, respectively                                               4,202,180         17,826,973
  Accounts receivable - employees                                                            3,355             23,615
  Income tax refund receivable                                                              37,515                 --
  Unbilled revenue                                                                         652,711            482,165
  Deferred tax asset                                                                       161,564            161,564
  Prepaid expenses and other current assets                                                   --              836,367
                                                                                      ------------       ------------

      Total current assets                                                               5,060,319         30,947,150

PROPERTY AND EQUIPMENT - Net                                                               276,753          3,264,874

GOODWILL                                                                                      --           52,558,177

DEFERRED TAX ASSET                                                                          31,541                 --

OTHER ASSETS                                                                                56,759            591,301
TOTAL                                                                                 $  5,425,372       $ 87,361,502
                                                                                      ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                                    $    423,143       $  4,108,974
  Line of credit                                                                           847,764                 --
  Current maturities of notes payable                                                      213,185             66,238
  Current maturities of capital lease obligations                                           64,322            455,946
  Accrued salaries and payroll taxes                                                       675,669                 --
  Other accrued expenses                                                                 1,935,260          3,286,885
  Income taxes payable                                                                        --            1,032,394
  Deferred revenue                                                                         621,329          1,001,947
                                                                                      ------------       ------------

      Total current liabilities                                                          4,780,672          9,952,384

COMMITMENTS AND CONTINGENCIES

LONG-TERM NOTES PAYABLE, NET                                                                                   61,410
LONG-TERM CAPITAL LEASES, NET                                                                                 242,903
LONG-TERM DEFERRED TAXES                                                                                      737,187

STOCKHOLDERS' EQUITY:
  Common stock, no par value - 13,068 no par value shares issued and outstanding
    in 1997; and 7,955,952, $.001 par value, shares issued and outstanding in 1998          318,068              7,956
    Stock warrants                                                                              --            450,000
    Additional paid-in capital                                                                  --         83,016,905
    Common stock payable                                                                        --          5,299,819
    Deferred compensation                                                                       --         (6,319,178)
    Retained earnings                                                                      326,632         (6,085,257)
    Cumulative translation adjustment                                                         --               (2,627)
                                                                                      ------------       ------------
      Total stockholders' equity                                                           644,700         76,367,618
                                                                                      ------------       ------------

TOTAL                                                                                 $  5,425,372       $ 87,361,502
                                                                                      ============       ============
</TABLE>

See notes to consolidated financial statements.






                                      -2-
<PAGE>   3





         BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                  THREE MONTHS                          SIX MONTHS
                                                   ENDED JUNE 30,                       ENDED JUNE 30,
                                               1997              1998              1997              1998
                                           ------------      ------------       ------------      ------------

<S>                                        <C>                <C>               <C>               <C>
REVENUES                                   $  3,452,623       $18,556,833       $  6,398,071      $ 23,665,714

COST OF REVENUES                              2,571,298        12,865,943          4,904,908        16,871,099
                                           ------------      ------------       ------------      ------------

      Gross profit                              881,325         5,690,890          1,493,163         6,794,615

OPERATING EXPENSES:
  Selling, general and administrative           418,107         3,930,066            501,404         4,596,861
  Stock compensation expense                       --           1,263,896            305,000         1,263,896
  In process research & development                --           3,000,000               --           3,000,000
  Depreciation and amortization                  41,265           405,679             66,966           436,235
                                           ------------      ------------       ------------      ------------

      Total operating expenses                  459,372         8,599,641            873,370         9,296,992
                                           ------------      ------------       ------------      ------------

INCOME (LOSS) FROM OPERATIONS                   421,953        (2,908,751)           619,793        (2,502,377)

OTHER INCOME                                     11,500           133,667             24,605           134,719

INTEREST EXPENSE                                (27,142)          (29,442)           (50,662)          (61,741)
                                           ------------      ------------       ------------      ------------

INCOME (LOSS) BEFORE INCOME TAXES               406,311        (2,804,526)           593,736        (2,429,399)
                                           ------------      ------------       ------------      ------------

INCOME TAX EXPENSE                               52,927           596,669             52,927           692,469
                                           ------------      ------------       ------------      ------------

NET INCOME (LOSS)                          $    353,384      $ (3,401,195)      $    540,810      $ (3,121,868)
                                           ============      ============       ============      ============


Shares outstanding (Note 4):
     Basic                                    1,012,306         7,203,560            893,453         4,107,933 
                                           ============      ============       ============      ============
     Diluted                                  1,012,306         7,203,560            893,453         4,107,933
                                           ============      ============       ============      ============

Earnings (loss) per share:
     Basic                                 $       0.35      $      (0.47)      $       0.61      $      (0.76)
                                           ============      ============       ============      ============
     Diluted                               $       0.35      $      (0.47)      $       0.61      $      (0.76)
                                           ============      ============       ============      ============         


</TABLE>


See notes to consolidated financial statement



                                      -3-
<PAGE>   4





          BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                      Three Months      Six Months
                                                                      Ended June 30,   Ended June 30,
                                                                          1998              1998
                                                                      ------------      ------------
<S>                                                                   <C>               <C>         
OPERATING ACTIVITIES:
  Net income (loss)                                                     (3,401,195)       (3,121,868)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
  Cumulative translation adjustment                                         (2,627)           (2,627)
  Depreciation and amortization                                            405,679           436,235
  Additions (reductions) to allowance for doubtful accounts                427,749           200,847
  In process research and development expense                            3,000,000         3,000,000
  Compensation expense on issuance of common stock                       1,263,896         1,263,896
  Cash provided by (used in) operating working capital:
  Trade accounts receivable                                             (2,806,665)       (3,140,218)
  Accounts receivable - employee                                             7,632             3,355
  Income tax refund receivable                                              19,039            37,515
  Unbilled revenue                                                       2,119,845         2,035,027
  Prepaid and other assets                                                 395,045           378,234
  Accounts payable                                                        (493,380)          567,345
  Accrued salaries and payroll taxes                                      (747,355)         (675,669)
  Other accrued expenses                                                (3,717,676)       (5,070,002)
  Income taxes payable                                                     941,008         1,036,808
  Deferred revenue                                                      (1,405,367)         (674,684)
                                                                      ------------      ------------

      Net cash used in operating activities                             (3,994,372)       (3,725,806)
                                                                      ------------      ------------

INVESTING ACTIVITIES:
   Cash paid to acquire founding companies                             (41,890,581)      (41,890,581)
   Additions of property and equipment                                    (249,132)         (241,698)
                                                                      ------------      ------------

      Net cash used in financing activities                            (42,139,713)      (42,132,279)
                                                                      ------------      ------------


FINANCING ACTIVITIES:
  Borrowings under (payments on) line of credit                                  0          (175,000)
  Proceeds from (payments on) capital lease obligations                    (59,067)          (99,010)
  Payments on short-term debt and notes payable                         (1,344,308)       (1,344,308)
  Net proceeds from issuance of common stock                            59,089,875        59,089,875
                                                                      ------------      ------------

      Net cash provided by financing activities                         57,686,500        57,471,557
                                                                      ------------      ------------

NET INCREASE IN CASH AND CASH
  EQUIVALENTS                                                           11,552,415        11,613,472

CASH AND CASH EQUIVALENTS:
  Beginning of period                                                       64,051             2,994
                                                                      ------------      ------------

  End of period                                                       $ 11,616,466      $ 11,616,466
                                                                      ============      ============

SUPPLEMENTAL INFORMATION - Interest paid                              $     29,442      $     61,741
                                                                      ============      ============

  Property and equipment financed through capital leases              $    253,888      $    253,888
                                                                      ============      ============
</TABLE>

See notes to consolidated financial statements.






                                      -4-
<PAGE>   5


                  BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    BASIS OF PRESENTATION

      BrightStar Information Technology Group, Inc. (the "Company" or
      "BrightStar") was formed to create a international provider of information
      technology consulting services. BrightStar has conducted no operations
      prior to April 16, 1998, and acquired the Founding Companies concurrently
      with and as a condition to the closing of its initial public offering on
      April 16, 1998.

      Concurrent with and as a condition to the closing of the offering,
      BrightStar acquired all of the outstanding capital stock or substantially
      all the net assets of Brian R. Blackmarr and Associates, Inc.
      ("Blackmarr"), Integrated Controls, Inc., Mindworks Professionals
      Education Group, Inc., Software Innovators, Inc., Zelo Group, Inc.,
      Software Consulting Services America, LLC and SCS Unit Trust (the
      "Founding Companies"). The acquisitions were accounted for using the
      purchase method of accounting, with Blackmarr being treated as the
      accounting acquirer, in accordance with Staff Accounting Bulletin No. 97
      ("SAB 97").

      The accompanying historical consolidated financial statements include only
      the historical financial information for Blackmarr, the accounting
      acquirer, prior to the IPO, which elected to change its fiscal year-end
      from September 30 to December 31 and the "Founding Companies" from May 1,
      1998 through June 30, 1998. These financial statements have not been
      audited. In the opinion of the Company's management, the financial
      statements reflect all adjustments necessary to present fairly the results
      of operations for the periods ended June 30, 1998 and 1997, the Company's
      financial position at December 31, 1997 and June 30, 1998, and the cash
      flows for the periods ended June 30, 1998 and 1997. These adjustments are
      of a normal recurring nature.

      Certain notes and other information have been condensed in or omitted from
      the interim financial statements presented in the Quarterly Report on Form
      10-Q. Therefore, these financial statements should be read in conjunction
      with the Company's registration statement on Form S-1.

      The operating results of the Company for the three month period ended June
      30, 1998, are not necessarily indicative of the results that may be
      expected for the entire year.

2.    ACQUISITION OF FOUNDING COMPANIES

      The following unaudited pro forma information gives effect to (i) the
      acquisitions (the "Acquisitions") by BrightStar of the outstanding capital
      stock or substantially all the net assets of the Founding Companies and
      (ii) a share exchange with BIT Investors, LLC ("BITI") and senior
      management of BrightStar for all outstanding common stock of BIT Group
      Services, Inc. ("BITG") and (iii) the closing of BrightStar's initial
      public offering and the application of the net proceeds therefrom. The
      unaudited pro forma information gives effect to the acquisitions, the
      share exchange and the offering as if they had occurred on January 1,
      1998.




                                      -5-
<PAGE>   6

      The Company believes the combination of the Founding Companies will
      provide opportunities to improve operating margins and increase
      profitability, including the consolidation of certain duplicative
      administrative functions. The Company believes it will be able to achieve
      operating efficiencies by consolidating certain administrative functions.
      The pro forma financial information herein reflects neither expected
      savings nor margin improvements but does reflect management's estimate of
      certain incremental corporate general and administrative costs.

      The pro forma adjustments are based on preliminary estimates, available
      information and certain assumptions that management deems appropriate, but
      which may be revised as additional information becomes available. The pro
      forma financial information does not purport to represent what the
      Company's results of operations would actually have been if such
      transactions had in fact occurred on the dates assumed and is not
      necessarily representative of the Company's financial position or results
      of operations for any future period. Since the Founding Companies were not
      under common control or management, historical combined pro forma results
      may not be comparable to, or indicative of, future performance.

<TABLE>
<CAPTION>
                                       THREE-MONTH PERIOD          SIX-MONTH PERIOD
                                       ENDED JUNE 30, 1998        ENDED JUNE 30, 1998
                                      (IN THOUSANDS, EXCEPT      (IN THOUSANDS, EXCEPT
PRO FORMA                                PER SHARE DATA)           PER SHARE DATA)
--------------------------------------------------------------------------------------
<S>                                        <C>                        <C>    
Revenues                                   $24,137                    $44,064
Net income                                 $   855                    $ 1,432
Net income per share - diluted             $  0.10                    $   .17
</TABLE>

      The computation of pro forma net income per share of common stock
      presented above is based on 8,497,822 shares of common stock outstanding
      as of June 30, 1998.




                                      -6-
<PAGE>   7


         BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

                 PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            THREE MONTHS
                                                           ENDED JUNE 30,
                                                                1998
                                                           --------------

<S>                                                         <C>         
REVENUES                                                    $ 24,137,115

COST OF REVENUES                                              16,736,441
                                                            ------------
      Gross profit                                             7,400,674

OPERATING EXPENSES:
  Selling, general and administrative                          5,453,023
  Stock compensation expense                                        --
  In process research & development                                 --
  Depreciation and amortization                                  594,832
                                                            ------------

      Total operating expenses                                 6,047,855
                                                            ------------
INCOME (LOSS) FROM OPERATIONS                                  1,352,819

OTHER INCOME                                                     175,405

INTEREST EXPENSE                                                 (47,542)

INCOME (LOSS) BEFORE INCOME TAXES                              1,480,682

INCOME TAX EXPENSE                                               626,063

NET INCOME (LOSS)                                           $    854,619
                                                            ============

Shares outstanding:
         Basic                                                 8,442,035
         Diluted                                               8,497,822

Earnings per share
         Basic                                              $       0.10
         Diluted                                            $       0.10
</TABLE>


      3. COMPREHENSIVE INCOME

      SFAS No. 130, "Reporting Comprehensive Income," became effective as of the
      first quarter of 1998. This statement requires companies to report and
      display comprehensive income and its components (revenues, expenses, gains
      and losses). Comprehensive income includes all changes in equity during a
      period except those resulting from investment by owners and distributions
      to owners. For the Company, comprehensive income was $(3,403,822) and
      $(3,124,495) for the three and six months ended in 1998, respectively, and
      is the same as net income reported in the 1997 periods.

      4. EARNINGS PER SHARE

      Earnings per share is based on the weighted average number of common stock
      and common stock equivalents outstanding during each period. The weighted
      average shares used to calculate earnings per share on the historical
      statement of operations has been determined by converting the number of
      outstanding shares of Blackmarr during the periods presented, based upon
      the ratio of 77 to 1, which was the ratio received as a result of the
      Offering.





                                      -7-
<PAGE>   8





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


      INTRODUCTION - BrightStar was organized in July 1997 and completed its
      public offering April 16, 1998. BrightStar was formed to provide
      enterprise-wide business and technology solutions to Fortune 1000
      companies and other large organizations. BrightStar provides these
      services to a diverse client base including but not limited to retail,
      industrial, petrochemical, manufacturing and distribution.

      The Company's services and products include ERP software implementation,
      consulting, software application development, systems integration and
      outsourcing, training as well as upgrades and support related to software
      products. The services are generally performed at clients' locations and
      at the Company's facilities. In providing ERP implementation and other IT
      services, the Company may assume responsibility for project management and
      bill the client on a time and material or fixed fee basis.

      Revenue is recognized as services are rendered. The timing of revenue is
      difficult to forecast because the Company's sales cycle for certain of its
      services can be relatively long and is subject to a number of
      uncertainties, including clients' budgetary constraints, the timing of
      clients' budget cycles, clients' internal approval processes and general
      economic conditions. In addition, as is customary in the industry, the
      Company's engagements, generally, are terminable without a client penalty.
      The Companies' 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, the rate of hiring and the
      productivity of revenue generating personnel; the availability of
      qualified IT professionals; the significance of client 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; changes in the demand for IT services; and general
      economic factors.

      Cost of revenue primarily consists 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.

      Selling, general and administrative expenses 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 expenditures.

      In July of 1996, the Securities and Exchange Commission (the "SEC") issued
      Staff Accounting Bulletin No. 97 ("SAB 97") relating to business
      combinations immediately prior to an initial public offering. SAB 97
      requires that these combinations be accounted for using the purchase
      method of accounting and requires that one of the companies be designated
      as the accounting acquirer. Accordingly, for financial statement purposes,
      BR Blackmarr and Associates, Inc. ("BRBA") has been designated as the
      acquiring company because its current shareholders, in the aggregate,
      acquired more common stock than the former shareholders of any of the
      other Founding Companies in conjunction with the acquisitions. The excess
      of the aggregate purchase price paid for the Founding Companies other that
      BRBA over the fair value of the net assets to be acquired by BrightStar is
      recorded as goodwill.



                                      -8-
<PAGE>   9



                        HISTORICAL RESULTS OF OPERATIONS

      Financial results for the quarter and six months ended June 30, 1998
      contain the operations of the seven Founding Companies from the date of
      the IPO. Financial results for the quarter and six months ended June 30,
      1997 contain only the operations of Blackmarr the accounting acquirer, for
      the period prior to the IPO. Consequently, the primary reason for
      variances between periods is the combined operations of the Founding
      Companies from their dates of acquisition.

      Specific events which occurred during 1998 are as follows :

      REVENUE - increased primarily due to new ERP contracts and additional
      custom application development projects. Revenues from Training and
      Education remained relatively constant during the period. The Company's
      foreign operations are subject to currency fluctuations. The impact of the
      fluctuation for the period was not material.

      COST OF REVENUES - increased in proportion to the additional ERP and
      custom application development revenue.

      SELLING, GENERAL AND ADMINISTRATIVE - remained relatively constant during
      the period. The Company has a sufficient amount of administrative
      personnel to support its current operations. The Company continues to
      invest in its infrastructure and internal reporting systems in order to
      support its growth.

                         LIQUIDITY AND CAPITAL RESOURCES

      As of June 30, 1998, and as a result of the successful completion of a
      public offering on April 16, 1998, BrightStar had $11.6 million in cash
      and cash equivalents and no borrowings outstanding from commercial lenders
      other than $.7 million of capital lease obligations.

      The proceeds of the offering, $59.0 million, net of commissions, were used
      to (i) pay the cash portion of the aggregate consideration for the
      Acquisitions, (ii) repay certain indebtedness of the Founding Companies,
      (iii) repay the advances from BITI under the BITI Loan Agreement, and (iv)
      pay certain professional and other related fees related to the public
      offering. The remaining cash and cash equivalents provide working capital
      and unallocated net proceeds for potential acquisitions.

      BrightStar is a company that conducts all of its operations through its
      subsidiaries. Accordingly, the Company's principal sources of liquidity
      are the cash flows of its subsidiaries, the cash available from any lines
      of credit that it may establish and the unallocated net proceeds of the
      offering.

      The Company expects to install or upgrade its accounting and management
      information systems and to install an internal network and communications
      system to facilitate exchange of information among the Founding Companies.
      Management presently anticipates that expenditures for these items will
      total approximately $3.0 million over the next two years; however, no
      assurance can be made with respect to the actual timing and amount of such
      expenditures.



                                      -9-
<PAGE>   10


      The Company has received a commitment from Banque Paribas to provide a
      Credit Facility. The Company expects that under the Credit Facility, the
      Company will have available to it an aggregate of up to $30.0 million in
      borrowings, which will be divided into two tranches: (i) a revolving
      credit facility (the "Revolving Credit Facility"), providing for
      borrowings of up to $20.0 million. Under the terms of the Banque Paribas
      commitment, the Revolving Credit Facility will be available to support
      working capital needs, to issue letters of credit, to refinance Founding
      Company indebtedness, if necessary, and for general corporate purposes;
      and the Acquisition Facility will be secured by liens on substantially all
      of the Company's assets (including accounts receivable) and a pledge of
      the Company's equity interest in each of its subsidiaries. The Company
      expects that the Credit Facility will require the Company to comply with
      various loan covenants, including (i) maintenance of certain financial
      ratios, (ii) restrictions on additional indebtedness and (iii)
      restrictions on liens, guarantees and payments of dividends. The Company
      anticipates that the Revolving Credit Facility will be available for
      advances and repayments through July 2001 and that, unless such facility
      is extended or renewed, all outstanding principal and accrued and unpaid
      interest under the Revolving Credit Facility will be due on such date. The
      Company anticipates that the Acquisition Facility will be available for
      advances and repayments through July 2003. The Credit Facility will
      contain provisions requiring mandatory prepayment of outstanding
      borrowings from the issuance of debt or equity securities for cash,
      excluding certain equity issued in connection with future acquisitions,
      and cash realized in connection with permitted asset sales outside of the
      ordinary course of business. The Company is presently negotiating the
      definitive loan documents with Banque Paribas; however, there can be no
      assurance that the Company will enter into the Credit Facility on the
      terms described or that the Company will enter into any credit facility at
      all.

      The Company intends to pursue acquisition opportunities. The timing, size
      or success of any acquisition effort and the associated potential capital
      commitments are unpredictable. The Company expects to fund future
      acquisitions through the issuance of additional equity, as well as through
      a combination of working capital, cash flow from operations and
      borrowings, including borrowings under the Credit Facility.

      The Company believes that cash flow from operations, borrowings under the
      Credit Facility and the unallocated net proceeds of the offering will be
      sufficient to fund its requirements for the foreseeable future.

      STOCK COMPENSATION EXPENSE - is a non-cash expense item related to the
      issuance of stock to certain Founders as a part of the IPO. This amount is
      being amortized over a 12 month period.

      IN PROCESS RESEARCH AND DEVELOPMENT - is a one time non-cash expense
      related to the research and development costs attributable to the Founding
      companies at the time of the IPO.

      DEPRECIATION AND AMORTIZATION - remained relatively constant during the
      period.

      INFLATION - Due to the relatively low levels of inflation experienced in
      the last three years, inflation did not have a significant effect on the
      results of operations of any of the Founding Companies in those periods.

      YEAR 2000 COMPLIANCE - All of the Company's management information and
      other date-referenced systems, including computer software and hardware,
      are Year 2000 compliant. There are no internal matters, therefore, that
      will affect the Company's ability to process systems date-referenced
      information when the Year 2000 arrives. The Company does not know the
      extent to which the current preparedness of its external business
      associates could adversely affect the Company's business transactions.
      There can be no assurance that such business associates will be compliant.

                                      -10-
<PAGE>   11
      CHANGES IN ACCOUNTING STANDARDS - SFAS No. 131, "Disclosures About
      Segments of an Enterprise and Related Information," will become effective
      in 1998. This statement establishes standards for defining and reporting
      business segments. The Company is currently determining its reportable
      segments. The adoption of SFAS No. 131 will not affect the Company's
      consolidated financial position, results of operations or cash flows.

      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
      performance of recently acquired businesses; 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 or existing
      government programs and the cost of attracting and retaining highly
      skilled personnel.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      This item is not applicable to the Registrant.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      This item is not applicable to the Registrant.

                                      -11-
<PAGE>   12

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

      The sole stockholder of the Company held a special meeting on January 26,
      1998, to consider action with respect to an amendment to the certificate
      of incorporation of the Company, creating two million shares of a new
      class of capital stock designated as Restricted Common Stock. The sole
      stockholder of the Company held a special meeting on February 27, 1998, to
      approve and ratify the long-term incentive plan adopted by the Company's
      board of directors. Both actions were approved by the sole stockholder.

ITEM 5. OTHER INFORMATION

      None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            27 Financial Data Schedule

      (b)   Reports on Form 8-K

            None.





                                      -12-
<PAGE>   13





                                   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 thereunto
duly authorized.


                                             BRIGHTSTAR INFORMATION
                                             TECHNOLOGY GROUP, INC.



                                             By:   /s/  MARSHALL G. WEBB
                                                 -------------------------------
                                                        Marshall G. Webb
                                                          President and
                                                      Chief Executive Officer




                                             By:   /s/  DANIEL M. COFALL
                                                 -------------------------------
                                                        Daniel M. Cofall
                                                     Chief Financial Officer





                                      -13-
<PAGE>   14


                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT NO.         DESCRIPTION
-----------         -----------
<S>                 <C>
   27               Financial Data Schedule

</TABLE>