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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C. 20549

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FORM 10-K

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|  |  | (Mark One)                                                                            
|- |  | --------------------------------------------------------------------------------------
| 
|x |  | ANNUAL REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

OR

|o |  | TRANSITION REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ------------------------------------------------------------------------------------------

For the transition period from ___________ to
___________.

Commission File No. 000-29239

INFORTE
CORP.(Exact
name of registrant as specified in its charter)

|Delaware                                                             |  | 36-3909334                               
|-------------------------------------------------------------------- |  | -----------------------------------------
|(State or other jurisdiction of 
  incorporation or organization)    |  | (I.R.S. Employer
  Identification Number)
|                                                                     |  |                                          
|150 North Michigan Avenue 
  Suite 3400, Chicago, Illinois 60601    
|(Address of principal executive offices) (Zip Code)                 
|                                                                    
|Registrants telephone number, including
  area code: (312) 540-0900
|Securities registered pursuant to Section
  12(b) of the Act: None  
|Securities registered pursuant to Section
  12(g) of the Act:       
|Common Stock, $.001 par value                                       

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 o

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

Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Act). Yeso
Nox

The
aggregate market value of the registrants voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrants most recently completed second
fiscal quarter, is $45,881,512.

The
number of shares of the Registrants common shares, par value $0.001 per share,
outstanding as of March 3, 2004 was 11,011,643.

Certain
portions of the Registrants definitive proxy statement dated March 24, 2004
for the Annual Meeting of Stockholders to be held April 28, 2004 are
incorporated by reference into Part III of this report.

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Inforte Corp.
Form 10-K
December 31, 2003

Table of Contents

|Item     | Page No.                                                                               
|-------- | ---------------------------------------------------------------------------------------
|Part I   |                                                                                        
|1.       | Business                                                                               
|2.       | Properties                                                                             
|3.       | Legal
  Proceedings                                                                    
|4.       | Submission
  of Matters to a Vote of Security Holders                                  
|4A.      | Executive
  Officers of the Registrant                                                 
|         |                                                                                        
|Part II  |                                                                                        
|5.       | Market for
  Registrants Common Equity and Related Stockholder Matters                
|6.       | Selected
  Consolidated Financial Data                                                 
|7.       | Managements
  Discussion and Analysis of Financial Condition and Results of Operations
|7A.      | Quantitative
  and Qualitative Disclosures About Market Risk                           
|8.       | Consolidated
  Financial Statements and Supplementary Data                             
|9.       | Changes in
  and Disagreements with Accountants on Accounting and Financial Disclosure 
|9A.      | Controls
  and Procedures                                                              
|         |                                                                                        
|Part III |                                                                                        
|10.      | Directors
  and Executive Officers of the Registrant                                   
|11.      | Executive
  Compensation                                                               
|12.      | Security
  Ownership of Certain Beneficial Owners and Management                       
|13.      | Certain
  Relationships and Related Transactions                                       
|14.      | Principal
  Accountant Fees and Services                                               
|         |                                                                                        
|Part IV  |                                                                                        
|15.      | Exhibits,
  Consolidated Financial Statement Schedules and Reports on Form 8-K         
|         | SIGNATURES                                                                             

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PART I

|ITEM 1. | BUSINESS
|------- | --------

The
information in this document contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements are
based upon current expectations that involve risks and uncertainties. Any
statements contained in this document that are not of historical fact, are
intended to be, and are, forward-looking statements, which involve known and
unknown risks. We generally use the following terms and similar expressions to
identify forward-looking statements: anticipate, believe, estimate,
expect, intend, may, plan, potential, should, could and will. Our
actual results could differ materially from those indicated by the
forward-looking statements made in this report. Accordingly, you should not
place undue reliance on these forward-looking statements.

Although
we believe that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of activity or
performance. Additionally, we do not assume responsibility for the accuracy or
completeness of these statements. We are under no duty to update any of the
forward-looking statements in this document to conform these statements to
actual results or to changes in our expectations.

Overview

Inforte
Corp. is a customer strategy and solutions consultancy that helps clients
improve performance by tying together customer and corporate strategy. Inforte
combines strong business and operational planning with innovative software
solutions to ensure its client base serves the right customers in the right
ways to generate the greatest return.

Our
client base consists primarily of Global 2000 companies. Representative clients
in the past year included Argent Mortgage Company, AutoTrader.com, Avery
Dennison, BP, Chicago Symphony Orchestra, Diageo, Guardian Life Insurance,
PerkinElmer, SouthStar Energy Services, Tribune Company, Unilever Best Foods,
Uniprise and WesCorp.

Inforte
has grown through organic means rather than through mergers or acquisitions
from its inception in 1993 through 2003. Historically, we have funded our
growth primarily through internally generated free cash flow, and we have
continued to generate positive free cash flow since becoming a public company
in February 2000. In March 2004 acquired COMPENDIT, Inc., a leading provider of
SAP Business Intelligence implementation consulting services. This acquisition
enhanced Infortes ability to offer analytics and business intelligence
solutions through COMPENDITs services partnership with SAP. As of December 31,
2003, we employed 189 people in our offices in Atlanta, Chicago, Dallas, London,
Los Angeles, New York and San Francisco.

Inforte
was incorporated in Delaware in 1999 and our stock is traded on the NASDAQ
National Market under the symbol INFT. Our Internet address is
http://www.inforte.com. Material contained on our website is not incorporated
by reference into this annual report.

Industry Background

A
fluctuating economic environment has created many challenges for companies
seeking growth, optimal profitability and increased efficiencies in highly
competitive and rapidly changing markets. In order to achieve these goals in
any economic environment, companies need to develop a customer strategy that is
highly integrated and aligned with its business strategy and goals. An
effective customer strategy applies well-established customer relationship
management (CRM), marketing management and business intelligence techniques to
proven technology solutions, allowing companies to design organizations that
systematically execute on business goals, communicate consistently and generate
the results that success requires.

The
analysis, design and implementation of effective CRM, marketing strategy and
business intelligence solutions require special skills and expertise that many
companies do not possess. These special skills include the ability to:

| |  | Identify the vital
  planning information that companies need to manage their business better in
  response to demand changes;
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                               
| |  | Integrate planning
  processes and systems across business functions;                                                         
| |   |                                                                                                                               
| |  | Develop integrated,
  demand-driven approaches to planning and executing operations;                                          
| |   |                                                                                                                               
| |  | Drive profitability from
  customers by linking customer-facing strategies to the back office; and                            
| |   |                                                                                                                               
| |  | Implement the technology
  required to support these solutions.                                                               

The
availability of high-quality professionals experienced in creating,
implementing and integrating these strategic and technological solutions is
limited. It is often inefficient and difficult for companies seeking to
implement their own customer solutions to hire, train and retain in-house
personnel. As a result, businesses engage professional services firms to help
them design and implement these strategies and solutions.

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Inforte Services & Solutions

Customer
Strategy and Solutions. We deliver customer strategy and solutions that tightly
align with client business strategy and goals. These customer solutions help
clients generate the greatest returns from all customer interactions, and allow
clients to maximize existing and future Customer Relationship Management (CRM)
investments by extending CRM strategy from the front-office throughout the
enterprise. We help our clients focus enterprise-wide decision-making processes
around a true understanding of what their customer demand is likely to be. We
increase our clients knowledge of their customers and help them plan
profit-driving marketing and sales activities around that knowledge. We assist
our clients with their business intelligence initiatives, customer segmentation
approaches, customer differentiation programs and marketing management.

Marketing
Strategy & Solutions. Through the Marketing Strategy & Solutions
practice, Inforte helps clients 1) architect their brand to drive sales to
precisely targeted customer segment, 2) analyze CRM-based information to
improve marketing investment effectiveness (ROI), 3) develop and implement
brand-centered pricing strategies to improve results, 4) reengineer marketing
processes to drive costs and frustration out of execution, 5) leverage
customer/consumer behavioral data to reinvent target segments and marketing
investment approaches, and 6) evaluate, design, and implement marketing tools and
technologies.

Customer
Intelligence. One of the most critical challenges for organizations, business
intelligence allows a companys management and its staff to base strategic and
operational decisions on facts instead of hypothesis and conjecture. Customer
Intelligence focuses on leveraging Business Intelligence for customer-related
issues like retention, mix, marketing performance, customer service impact, and
sales analytics. Inforte helps clients to assess their current analytical,
reporting and data architecture challenges and then implement the requirements,
architecture and processes to improve business intelligence capabilities. The
result is fast and accurate access, analysis and dissemination of an
organizations key information assets to drive actionable plans to meet
critical business objectives.

Service
Lines. To effectively deliver on Infortes strategy and solution offerings, we
deliver the following services:

Operational
Strategy. Inforte
helps firms establish operational strategies that support their desired
strategic positioning. The strategies may be customer-focused (e.g., Customer
Relationship Management/CRM or customer centric), product- or service-driven
strategies (e.g., product/channel strategies), and/or strategies to achieve
operational excellence. Inforte helps clients develop new operating strategies
or improve on existing ones by validating, refining and building value
propositions, conducting competitive analysis, developing customer
value/segmentation approaches, developing benefits or ROI models, and creating
branding or marketing strategies.

Process
Design. By developing
a detailed design of the to-be business processes, an organization can
positively impact organizational and technology changes that follow. Inforte
takes a pragmatic view of this. We recognize that driving sustainable process
change is difficult to accomplish, and we draw upon significant depth of
experience to design business processes that are practical and adoptable.
Inforte provides the support needed to ensure that a process is rolled out and
adopted. Implementation planning, key metrics and organizational change
planning are integral to the successful deployment of redesigned processes.

Program
Management. Inforte
can enhance the successful delivery of projects through the implementation of
disciplined program management techniques. This includes the establishment of a
Program Management Office (PMO) to define, deploy and support common processes,
techniques, and tools that are used by all projects throughout the program.

Organizational
Change. Concurrent
with the design of a clients Operating Model, companies must plan for the
organizational changes that may be required to enact and sustain the business.
Determining the organizations readiness for change requires a thorough
assessment of its current leadership, structure, culture, and workforce.
Organization Change Planning begins with this assessment and produces a
prioritized list of initiatives that address macro (holistic,
organization-wide) and micro (the individual perspective) level activities
required to support the successful deployment of integrated solutions within
the organization.

Technology
Delivery. Infortes
technology delivery service line involves the identification, definition, and
sequencing of a series of technology-focused initiatives to meet a specific set
of business goals. Frequently starting with the development of a technology
roadmap, Infortes technology delivery is anchored in the companys strategic
plan, its operating model and an understanding of the required business
capabilities, current processes, and organizational structures.

Methodology and Tools. Our proprietary
approach to planning and delivering projects, Velocity to Value (V2V), has
produced industry leading project efficiency metrics to help ensure we deliver
projects on time and within budget. We believe our client advocacy approach and
our rigorous delivery methodologies have helped us to achieve high levels of
client satisfaction.

All
Inforte projects are governed by our V2V project delivery methodology. We
structure and price our projects in shorter, multiple phases to ensure that
each phase meets the clients business objectives.

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To
continuously maintain the high level of advanced technological skills among our
staff, Inforte identifies, captures, organizes and disseminates our knowledge
capital internally through an intranet-based system we call the Inforte
Collaborative Environment, or ICE.

Collaborative Client Involvement. We
believe our solutions are successful because they are developed in
collaboration with our clients. Because the ultimate success of any project
will depend upon the clients ability to effectively operate and support the
related strategies, processes and technology on an ongoing basis, our
co-management approach is designed to include substantial client participation
in all phases of the project. This enables the client to have a thorough
understanding of what has been done, how it was completed and why it was
performed. The collaborative environment is further supported by allowing
clients to access project deliverables through our ICE intranet. We believe our
co-management philosophy differs from that of many service providers, who limit
the clients role in project delivery. We believe our collaborative knowledge
transfer philosophy has contributed to consistently high project success rates
and client satisfaction.

Inforte Strategy

Infortes
strategy is to focus on consulting in one area of business, we have chosen to
focus on customer related strategies, processes and solutions. Inforte is an
expert in this area, we focus all of our activity systems, experience building,
intellectual capital development, tool and methodology creation, training and
professional development in this area. We offer our clients best-in-world
capabilities, we believe we compare more favorably than our competitors, who
may be larger and may have more resources than us, but who are unfocused and
have not developed a specialty.

Our
growth focus for 2004 is to:

| |  | Deepen our focus in
  Customer Strategy and Solutions, by offering a broader set of services and
  solutions to our most strategic clients and by developing a broader array of
  offerings within our core industries;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                        
| |  | Build further depth in our
  new practice areas of Marketing Strategy and Solutions and Customer and
  Business Intelligence;                                                                                          
| |   |                                                                                                                                                                                                                        
| |  | Develop new industry
  practices areas; our main focus is build our Federal Sector business but we
  will also further develop our Life Sciences/Pharma and Consumer Packaged
  Goods practices;                       
| |   |                                                                                                                                                                                                                        
| |  | Build a Global Delivery
  Model, we will set up an office in India and build out the infrastructure and
  offerings to be able to offer our customers a differentiated service for
  technology delivery; and          
| |   |                                                                                                                                                                                                                        
| |  | Develop new and
  complementary offerings through acquisitions and mass hires.                                                                                                                                         

The
underlying principles supporting this strategy are:

Maintain
customer strategy and solutions focus. Inforte helps clients increase
profitability by maximizing the effectiveness of their customer-facing
initiatives. Inforte consultants deliver strategy, process and technology
solutions that enhance visibility across our clients enterprise, making their
customer interactions more strategic and lucrative. We believe our focus
enhances our ability to generate assignments from existing and new clients,
achieve high margins, maintain our position of technological and thought
leadership and provide challenging assignments to our employees.

Ensure
Continued Client Satisfaction. Inforte strives to ensure high client
satisfaction. We survey clients each quarter to assess their satisfaction and
link management compensation to these results. Our quarterly surveys ask clients
open-ended questions on measurements they consider important and ask them to
numerically score us on these factors. For comparability purposes, our client
surveys also request numerical scores on nine set factors, including expertise,
project management skills, business understanding, price and responsiveness.

Continue
to Attract and Retain High Quality Personnel. Infortes strategic focus
requires that we attract and retain highly motivated, intelligent people of
exceptional quality. We believe the best way to continue to attract and retain
highly qualified personnel is to provide an intellectually challenging
environment, an opportunity to personally impact our companys future and a
strong corporate culture.

Continue
Superior External and Internal Business Execution. Inforte is committed to
outstanding internal and external execution to deliver superior results for our
clients and for our investors. We believe that our high gross margin relative
to peer companies indicates our ability to deliver fixed fee projects on time
and on budget to a degree greater than other consulting firms. We believe that
our record of consistently delivering on revenue and earnings guidance we set
for the current quarter at the time when we release the prior quarters
results, with no pre-announcements, shows our superior forecasting ability
relative to other companies.

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Inforte
emphasizes continuous improvement of our client delivery expertise, including
our V2V methodology, knowledge management and other internal processes to
compete effectively in the future. We continue to refine the systems and
processes that comprise our internal infrastructure, which we consider to be
advanced for a company of our size.

Clients

Our
client base consists primarily of Global 2000 companies. Representative clients
are listed in the Overview. During 2003 our top five clients equaled 51
percent of total revenue and our top ten clients equaled 68 percent of total
revenue. No single customer has provided Inforte with over 10 percent of annual
revenue for the five years ending December 31, 2002, and two customers contributed
more than 10 percent of annual revenue in 2003.

Sales and Marketing

Inforte
markets with a team-selling approach that combines dedicated sales
professionals, senior client executives and specific subject matter experts,
strategists or senior delivery personnel. We believe our team model is superior
to a traditional professional services sales model where one individual must
manage the sales process in addition to providing the services. Our dedicated
sales professionals focus primarily on selling to new customers, while our
client executives focus primarily on maintaining and extending relationships
with existing customers.

We
use a proprietary sales and marketing methodology called SAMM to capture
detailed information on sales opportunities. SAMM is based on a customized
customer relationship management system to track potential contracts at each
stage of our sales cycle. We project revenue based on a probability analysis of
each sales opportunity, allowing us to manage continually our staffing needs
and spending plans.

Our
market development efforts are designed to build Infortes brand name and recognition
in the marketplace and generate leads for new business. Our activities include
strategic direct marketing programs, seminars and briefings that target
corporate executives, public speaking opportunities, attendance at industry
conferences, regular meetings with industry analysts, public relations
programs, electronic brochures and use of web site properties such as
inforte.com.

We
complement our internal sales and marketing processes with select formalized
industry alliances. We co-market and share leads with software vendors and
complementary services firms with whom we have strategic, non-exclusive
marketing relationships. We also work with other software vendors with whom we
do not have formalized relationships.

People

Our
headcount was 257 people at the end of 1999, 442 people at the end of 2000, 294
people at the end of 2001, 229 employees as of December 31, 2002 and 189
employees as of December 31, 2003. Of these, 151 are consultants, 14 are in
sales and marketing, including 11 quota-based sales personnel, 5 are in human
resources and 19 are management or administrative personnel. None of our
employees are represented by a labor union, and we believe our employee
relations are good.

Competition

We
compete in the strategy and technology professional services market, which is
highly competitive. Despite the elimination of many competitors over the past
two years, competition remains intense due to restrained spending on consulting
and information technology in a tough economic environment. We expect intense
competition to continue. We believe that our competitors fall into several
categories, including the following:

| |  | The successor
  organizations to the Big 5 consulting firms: Accenture, BearingPoint,
  Deloitte Consulting/Braxton, Cap Gemini Ernst & Young and IBM Business
  Consulting Services
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                     
| |  | Technology consulting
  firms such as Answerthink, Braun Consulting, DiamondCluster, and Sapient                                                                                    
| |   |                                                                                                                                                                                     
| |  | Niche service providers
  supporting CRM-related technology, such as Akibia, Extraprise and Headstrong                                                                              
| |   |                                                                                                                                                                                     
| |  | Strategy consulting firms
  such as Bain, Booz Allen & Hamilton, Boston Consulting Group and McKinsey                                                                               
| |   |                                                                                                                                                                                     
| |  | Professional services
  divisions of application software vendors                                                                                                                   
| |   |                                                                                                                                                                                     
| |  | Internal information
  technology departments of current and potential clients                                                                                                      
| |   |                                                                                                                                                                                     
| |  | Indian offshore
  development firms such as Cognizant Technology, Infosys Technologies, Satyam
  Computer Services, Tata Consultancy Services and Wipro                             
| |   |                                                                                                                                                                                     
| |  | Large systems integration
  or outsourcing firms such as Computer Sciences, EDS, and Unisys.                                                                                        

Many
of our competitors have longer operating histories, larger client bases, longer
relationships with clients, greater brand or

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name recognition and significantly greater financial, technical, marketing and
public relations resources than we do. However, we believe that only a few of
our competitors have the focus and possess all of the skills necessary to offer
the comprehensive customer strategies and solutions that we provide.

There
are relatively low barriers to entry into the strategy and technology
professional services market. Existing or future competitors may develop or
offer services that are comparable or superior to ours at a lower price, which
could cause our revenues to decline.

Risk Factors

In
addition to other information in this Form 10-K, the following risk factors
should be carefully considered in evaluating Inforte and its business because
such factors currently may have a significant impact on Infortes business,
operating results and financial condition. As a result of the risk factors set
forth below and elsewhere in this Form 10-K, and the risk factors discussed in
Infortes other Securities and Exchange Commission filings, actual results
could differ materially from those projected in any forward-looking statements.

RISKS RELATED TO INFORTE

If we fail to identify and successfully transition to the
latest and most demanded solutions or keep up with an evolving industry, we
will not compete successfully for clients and our profits may decrease.

If
we fail to identify the latest solutions, or if we identify but fail to
successfully transition our business to solutions with growing demand, our
reputation and our ability to compete for clients and the best employees could
suffer. If we cannot compete successfully for clients, our revenues may
decrease. Also, if our projects do not involve the latest and most demanded
solutions, they would generate lower fees.

Because
our market changes constantly, some of the most important challenges facing us
are the need to:

| |  | develop new services that
  meet changing customer needs;                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                    
| |  | identify and effectively
  market solutions with growing demand during a period of slower technological
  advancement and adoption;
| |   |                                                                                                                                    
| |  | enhance our current
  services;                                                                                                    
| |   |                                                                                                                                    
| |  | continue to develop our
  strategic expertise;                                                                                     
| |   |                                                                                                                                    
| |  | effectively use the latest
  technologies; and                                                                                     
| |   |                                                                                                                                    
| |  | influence and respond to
  emerging industry standards and other technological changes.                                            

All
of these challenges must be met in a timely and cost-effective manner. We
cannot assure you that we will succeed in effectively meeting these challenges,
especially during a substantial economic slowdown when adjusting the size of
the business for lower demand diverts resources and senior managements
attention.

If we fail to satisfy our clients expectations, our existing
and continuing business could be adversely affected.

If
we fail to satisfy the expectations of our clients, we could damage our
reputation and our ability to retain existing clients and attract new clients.
In addition, if we fail to perform adequately on our engagements, we could be
liable to our clients for breach of contract. Although most of our contracts
limit the amount of any damages based upon the fees we receive we could still
incur substantial cost, negative publicity, and diversion of management
resources to defend a claim, and as a result, our business results could
suffer.

We may be unable to hire and retain employees who are highly
skilled, which would impair our ability to perform client services, generate
revenue and maintain profitability.

If
we are unable to hire and retain highly-skilled individuals, our ability to
retain existing business and compete for new business will be harmed.
Individuals who have successfully sold and delivered services similar to those
we provide to our clients are limited and competition for these individuals is
intense. Further, in the current depressed spending environment, individuals
who were previously successful may no longer be successful. Identifying
individuals who will succeed in this environment is extraordinarily difficult.
To attract and retain these individuals, we invest a significant amount of time
and money. In addition, we expect that both bonus payments and equity ownership
will be an important component of overall employee compensation. In the

5

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current
economic and market environment, overall bonus payments have been below target,
increasing the risk that key employees will leave Inforte. Also, if our stock
price does not increase over time, it may be more difficult to retain employees
who have been compensated with stock options. Options granted to employees from
the IPO date, February 17, 2000, through December 31, 2003 have exercise prices
of $4.76 to $71.81. The average exercise price of all options outstanding at
December 31, 2003 is $12.16. Since the current market price for Inforte stock
has recently been below this average strike price, it may be more difficult to
retain employees. If key employee turnover rates grow to unacceptable levels
because compensation is not at competitive rates, Inforte may increase the
level of stock option grants or cash compensation. These actions would reduce
net income per share and may cause Inforte to become unprofitable.

If we fail to adequately manage rapid changes in demand, our
profitability and cash flow may be reduced or eliminated.

If
we cannot keep pace with the rapid changes in demand, we will be unable to
effectively match resources with demand, and maintain high client satisfaction,
which may eliminate our profitability and our ability to achieve positive free
cash flow. Our business grew dramatically from 1993 through 2000. For example,
our net revenue increased by 100% or more for seven consecutive years, reaching
$63.8 million in 2000. As a result of the current depressed Information
Technology (IT) spending environment and overcapacity in our industry however,
net revenue has declined in each of the last three years, dropping to $32.7
million in 2003. If the level of spending declines further, we may not be
profitable or achieve positive free cash flow. If, on the other hand, our
growth exceeds our expectations, our current resources and infrastructure may
be inadequate to handle the growth.

If our marketing relationships with software vendors
deteriorate, we would lose their client referrals. If these vendors continue to
increase their professional services revenue, our revenue could be adversely
affected.

We
currently have marketing relationships with software vendors, including Siebel
Systems, Inc., Vignette and Unica. Although we have historically received a
large number of business leads from these and other software vendors to
implement their products, they are not required to refer business to us and
they may terminate these relationships at any time. If our relationships with
these software vendors deteriorate, we may lose their client leads and our
ability to develop new clients could be negatively impacted. Any decrease in
our ability to obtain clients may cause a reduction in our net revenues.

Historically
our software partners have primarily relied on licensing fees and maintenance
contracts to generate revenue. However, more recently as software licensed
sales have declined, software vendors have sought to supplement their revenue
through increased implementation services for their software. This business
strategy puts us in competition with our software partners on some deals,
reducing client leads and our ability to develop new clients and revenue.

If we are unable to rapidly integrate third-party software,
we may not be able to deliver solutions to our clients on a timely basis,
resulting in lost revenues and potential liability.

In
providing client services, we recommend that our clients use software
applications from a variety of third-party vendors. If we are unable to
implement and integrate this software in a fully functional manner for our
clients, we may experience difficulties that could delay or prevent the
successful development, introduction or marketing of services.

Software
often contains errors or defects, particularly when first introduced or when
new versions or enhancements are released. Despite internal testing and testing
by current and potential clients, our current and future solutions may contain
serious defects due to third-party software or software we develop or customize
for clients. Serious defects or errors could result in liability for damages,
lost revenues or a delay in implementation of our solutions.

Our revenues could be negatively affected by the loss of a
large client or our failure to collect a large account receivable.

At
times, we derive a significant portion of our revenue from large projects for a
limited number of varying clients. During 2003 our five largest clients
accounted for 51% of net revenue and our ten largest clients accounted for 68%
of net revenue. In the same year we had two clients contributing more than 10%
of annual net revenue and frequently we have one or more clients in a quarter
accounting for over 10% of net revenue. Although these large clients vary from
time to time and our long-term revenues do not rely on any one client, our
revenues could be negatively affected if we were to lose one of our top clients
or if we were to fail to collect a large account receivable.

In
addition, many of our contracts are short-term and our clients may be able to
reduce or cancel our services without incurring any penalty. If our clients
reduce or terminate our services, we would lose revenue and would have to
reallocate our employees and our resources to other projects to attempt to
minimize the effects of that reduction or termination. Accordingly,

6

---

---

terminations,
including any termination by a major client, could adversely impact our
revenues. We believe the uncertain economic environment increases the
probability that services may be reduced or canceled.

If we estimate incorrectly the time required to complete our
projects, we will lose money on fixed-price contracts.

A
portion of our contracts are fixed-price contracts, rather than contracts in
which the client pays us on a time-and-materials basis. We must estimate the
number of hours and the materials required before entering into a fixed-price
contract. Our future success will depend on our ability to continue to set
rates and fees accurately and to maintain targeted rates of employee
utilization and project quality. If we fail to accurately estimate the time and
the resources required for a project, any required increase in the time and
resources to complete the project could cause our profits to decline.

If we are unable to accurately forecast our quarterly
revenue, our profitability may be reduced or eliminated.

The
level of IT spending growth by current and potential clients in the United
States has slowed and become less certain. In some cases the uncertainty has
reduced the overall number and size of projects available for bid. In other
cases the uncertainty has resulted in project deferrals, project scope
reductions, longer decision making cycles or limited follow-on projects at
existing clients. With fewer opportunities available in the market, competition
on some opportunities has become more intense. While our revenue forecast
methods are sophisticated and have proven accurate historically, we believe the
current environment adds greater risk and uncertainty to our forecasts. If we
fail to accurately forecast revenue, our actual results may differ materially
from the amounts planned, and our profitability may be reduced or eliminated.

Fluctuations in our quarterly revenues and operating results
due to cyclical client demand may lead to reduced prices for our stock.

Our
quarterly revenues and operating results have fluctuated significantly in the
past and we expect them to continue to fluctuate significantly in the future.
Historically, we have experienced our greatest sequential growth during the
first and second quarters. We typically experience significantly lower
sequential growth in the third and fourth quarters. We attribute this to the
budgeting cycles of our customers, most of whom have calendar-based fiscal
years and as a result are more likely to initiate projects during the first
half of the year. In 2001, this traditional seasonal pattern was overwhelmed by
a cyclical decline in information technology spending, causing our net revenue
to decline sequentially in each quarter of 2001. More recently, in February and
March 2002, we did experience an increase in demand which did allow our net
revenue in the second quarter 2002 to exceed the first quarter 2002 level. We
believe that increase in demand was due to positive seasonal effects, while the
subsequent lower revenue in the third quarter 2002 was due to negative seasonal
effects. In 2003, our net revenue declined sequentially for the first three
quarters of the year. We believe our traditional seasonal pattern was overwhelmed
by geopolitical events that took place early in 2003, the most notable of these
events being the war in Iraq. This existence of both seasonal and cyclical
effects does make it more difficult to predict demand, and if we are unable to
predict client demand accurately in a slower growth or distressed economic
environment, our expenses may be disproportionate to our revenue on a quarterly
basis and our stock price may be adversely affected.

Others could claim that we infringe on their intellectual
property rights, which may result in substantial costs, diversion of resources
and management attention, and harm to our reputation.

A
portion of our business involves the development of software applications for
specific client engagements. Although we believe that our services do not
infringe on the intellectual property rights of others, we may be the subject
of claims for infringement, which even if successfully defended could be costly
and time-consuming. An infringement claim against us could materially and
adversely affect us in that we may:

| |  | experience a diversion of
  our financial resources and management attention;                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                            
| |  | incur damages and
  litigation costs, including attorneys fees;                                                           
| |   |                                                                                                                            
| |  | be enjoined from further
  use of the intellectual property;                                                               
| |   |                                                                                                                            
| |  | be required to obtain a
  license to use the intellectual property, incurring licensing fees;                              
| |   |                                                                                                                            
| |  | need to develop a
  non-infringing alternative, which could be costly and delay projects; and                              
| |   |                                                                                                                            
| |  | have to indemnify clients
  with respect to losses incurred as a result of our infringement of the
  intellectual property.

7

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Because we are newer and smaller than many of our
competitors, we may not have the resources to effectively compete, causing our
revenues to decline.

Many
of our competitors have longer operating histories, larger client bases, longer
relationships with clients, greater brand or name recognition, and
significantly greater financial, technical, marketing, and public relations
resources than we do. We may be unable to compete with full-service consulting
companies, including the former consulting divisions of the largest global
accounting firms, who are able to offer their clients a wider range of
services. If our clients decide to take their IT strategy and technology
projects to these companies, our revenues may decline. It is possible that in
uncertain economic times our clients may prefer to work with larger firms to a
greater extent than normal. In addition, new professional services companies
may provide services similar to ours at a lower price, which could cause our
revenues to decline.

Our expansion and growth internationally could negatively
affect our business.

For
2003, our international net revenue was 20% of total net revenue. There are additional
risks associated with international operations, which we do not face
domestically and we may assume even higher levels of such risk as we expand our
ventures in Europe and India. Risk factors associated with international
operations include longer customer payment cycles, adverse taxes and compliance
with local laws and regulations. Further, the effects of fluctuations in
currency exchange rates may adversely affect the results of operations.
Finally, as the U.S. economic slowdown has spread to the rest of the world, our
ability to obtain international revenues may be reduced in the future. These
risk factors, among others not cited here, may negatively impact our business.

As offshore development becomes accepted as a viable
alternative to doing work domestically, our pricing and revenue may be
negatively affected.

Gradually,
over the past several decades, numerous IT service firms have been founded in
countries such as India, which have well-educated and technically trained
English-speaking workforces available at wage rates that are only a fraction of
U.S. and European wages rates. Additionally, some larger clients have
established internal IT operations at offshore locations. While traditionally
we have not competed with offshore development, presently this form of
development is seeing rapid and increasing acceptance in the market, especially
for routine and repetitive types of development. While offshore development has
greater risk due to distance, geopolitical and cultural issues, we believe its
lower cost advantage will likely overwhelm these risks. If we are unable to
evolve our service offerings to a more differentiated position or if the rate
of acceptance of offshore development advances even faster than we anticipate,
then our pricing and our revenue may be negatively affected.

Recent changes in the executive team and strategic
modifications in business structure could lead to inferior financial results if
this transition does not occur smoothly.

On
July 25, 2003 Inforte filed a Form 8-K with the Securities and Exchange
Commission announcing strategic changes for growth which, among other things,
included simplification of the current business structure and changes in
Infortes executive management team. In addition, on December 5, 2003, Inforte
announced the hiring of new President and Chief Operating Officer, David
Sutton, and the stepping down of Stephen Mack, both effective on that date.
Should these changes in the executive team adversely affect relationships with
current partners and clients or lead to higher turnover rates, we may be unable
to maintain the present level of profitability.

Current or future legislative and regulatory requirements,
such as the Sarbanes-Oxley Act of 2002, may lead to increased insurance,
accounting, legal and other costs, which may cause our profitability to
decline.

We
have already switched some supplier relationships, including our audit and tax
advisor relationship to mitigate these cost increases, and other relationships
are under review. On September 8, 2003, the Audit Committee of the Board of
Directors approved (1) the dismissal of Ernst & Young LLP (E&Y) as the
Companys independent accountants, effective November 15, 2003, and (2) the
replacement of E&Y with Grant Thornton LLP as the Companys independent
accountants, commencing upon the dismissal of E&Y. The replacement of
E&Y with Grant Thornton LLP was based on economic reasons related to
possible future fees escalation in current and forthcoming engagements of the
Companys independent accountants.

We may not be able to integrate successfully the business of
recently acquired COMPENDIT, Inc. with Infortes business.

While
we believe that our recently closed acquisition of COMPENDIT, Inc., a leading provider
of SAP Business Intelligence implementation consulting services, will enhance
our ability to offer analytics and business intelligence solutions to our
costumers, the Inforte and COMPENDIT businesses may not be integrated
successfully because of the potential loss during the post-closing period of
key employees, customers or service partners or for other reasons. Failure to
integrate COMPENDITs business successfully could result in an inability to
realize certain synergies of the acquisition, which, in turn, may negatively
impact our operating results.

8

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RISKS RELATED TO OUR INDUSTRY

If the rate of adoption of advanced information technology
slows substantially, our revenues may decrease.

We
market our services primarily to firms that want to adopt information
technology that provides an attractive return on investment or helps provide a
sustainable competitive advantage. Our revenues could decrease if companies
decide not to integrate the latest technologies into their businesses due to
economic factors, governmental regulations, financial constraints or other
reasons.

Infortes
market research suggests that the level of information technology spending in
the United States is closely linked with the growth rate of the Gross Domestic
Product (GDP). The slowdown in the U.S. GDP growth rate that began in the
second half of 2000 has caused a slower rate of adoption of advanced
information technology by our target clients. We expect information technology
spending and Inforte revenue to be highly dependent on the health of the U.S.
economy. We believe that corporate revenue-driven profit growth must resume for
IT spending to improve. If the overall level of business capital investment
remains depressed or declines further, this may cause our revenue to decline
further.

If the supply of information technology companies and
personnel continues to exceed demand, this may adversely impact the pricing of
our projects and our ability to win business.

Beginning
in the second half of 2000, many firms in our industry announced significant
employee layoffs and lower rates of utilization of billable personnel. An
oversupply of technology professionals may reduce the price clients are willing
to pay for our services. An oversupply may also increase the talent pool for
potential clients who may choose to complete projects in-house rather than use
an outside consulting firm such as Inforte. Lower utilization rates increase
the likelihood that a competitor will reduce their price to secure business in
order to improve their utilization rate. The extent to which pricing and our
ability to win business may be impacted is a function of both the magnitude and
duration of the supply and demand imbalance in our industry.

Geopolitical instability may cause our revenues to decrease.

Our
clients often avoid large IT spending commitments during periods of
geopolitical instability and economic uncertainty. The possibility of
terrorists attacking the United States interests or geopolitical concerns in
other areas such as the Middle East and North Korea may cause clients to freeze
or slow their decision making processes. This would slow demand for our
services and would negatively impact our revenue.

RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK

Our stock price could be extremely volatile, like many
technology stocks.

The
market prices of securities of technology companies, particularly information
technology services companies, have been highly volatile. We expect continued high
volatility in our stock price, with prices at times bearing no relationship to
Infortes operating performance.

Infortes
average trading volume during 2003 averaged approximately 40,000 shares per
day. On any particular day, Infortes trading volume can be less than 1,000
shares, increasing the potential for volatile stock prices.

Volatility of our stock price could result in expensive class
action litigation.

If
our common stock suffers from volatility like the securities of other
technology companies, we have a greater risk of further securities class action
litigation claims. One such claim is pending presently. Litigation could result
in substantial costs and could divert our resources and senior managements
attention. This could harm our productivity and profitability.

Officers and directors own a significant percentage of
outstanding shares and, as a group, may control a vote of stockholders.

As
of March 3, 2004 our executive officers and directors beneficially own over 40% of the
outstanding shares of our common stock. The largest owners and their percentage
ownership are set forth below:

| |  | Philip S. Bligh   |  | 21.7 | %
| | - | ----------------- |  | ---- | -
| |   |                   |  |      |  
| |  | Stephen C.P. Mack |  | 15.2 | %

9

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If
the stockholders listed above act or vote together with other employees who own
significant shares of our common stock, they will have the ability to control
the election of our directors and the approval of any other action requiring
stockholder approval, including any amendments to the certificate of incorporation
and mergers or sales of all or substantially all assets, even if the other
stockholders perceive that these actions are not in their best interests.

Our
stock repurchase program has had the effect of increasing the concentration of
insider ownership. If we make further repurchases, the percentage of insider
ownership could increase further.

Over
time, the influence or control executive officers have on a stockholder vote
may decrease as officers supplement below-market salaries and diversify overall
equity wealth with sales of Inforte stock. As permitted by SEC Rule 10b5-1,
Inforte executive officers have or may set up a predefined, structured stock
trading program. The trading program allows brokers acting on behalf of company
insiders to trade company stock during company blackout periods or while the
insiders may be aware of material, non-public information, if the transaction
is performed according to a pre-existing contract, instruction or plan that was
established with the broker during a non-blackout period and when the insider
was not aware of any material, non-public information. Inforte executive
officers may also trade company stock outside of plans set up under SEC Rule
10b5-1, however, such trades would be subject to company blackout periods and
insider trading rules.

The authorization of preferred stock, a staggered board of
directors and supermajority voting requirements will make a takeover attempt
more difficult, even if the takeover would be favorable for stockholders.

Infortes
certificate of incorporation and bylaws may have the effect of deterring,
delaying or preventing a change in control of Inforte. For example, our charter
documents provide for:

| |  | the ability of the board
  of directors to issue preferred stock and to determine the price and other
  terms, including preferences and voting rights, of those shares without
  stockholder approval;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                        
| |  | the inability of our
  stockholders to act by written consent or to call a special meeting;                                                                                                            
| |   |                                                                                                                                                                                                        
| |  | advance notice provisions
  for stockholder proposals and nominations to the board of directors;                                                                                                       
| |   |                                                                                                                                                                                                        
| |  | a staggered board of
  directors, with three-year terms, which will lengthen the time needed to gain
  control of the board of directors; and                                                          
| |   |                                                                                                                                                                                                        
| |  | supermajority voting
  requirements for stockholders to amend provisions of the charter documents
  described above.                                                                                   

We
are also subject to Delaware law. Section 203 of the Delaware General
Corporation Law prohibits us from engaging in a business combination with any
significant stockholder for a period of three years from the date the person
became a significant stockholder unless, for example, our board of directors
approved the transaction that resulted in the stockholder becoming an
interested stockholder. Any of the above could have the effect of delaying or
preventing changes in control that a stockholder may consider favorable.

|ITEM 2. | PROPERTIES
|------- | ----------

Our
headquarters are located in Chicago, Illinois. Senior management, sales,
marketing, human resources and administrative personnel, as well as the
Chicago-based consultants use this facility. We have two subleases for a total
of 50,765 square feet in Chicago. The primary sublease for 33,065 square feet
expires in December 2005 with no option to renew. The secondary sublease for
17,700 square feet expires in June 2006 with no option to renew. We have
regional offices for our regional personnel. We lease 22,529 square feet in
Irvine, California and this lease term expires in July 2006 with an option to
renew. We lease 4,480 square feet in Irving, Texas and this lease term expires
in May 2005 with an option to renew. We have also entered into various
short-term leases for professional office space in San Mateo, California,
Alpharetta, Georgia, New York and London, England.

|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

Inforte,
Philip S. Bligh, an officer of Inforte, and Stephen C.P. Mack and Nick Padgett,
both former officers of Inforte, have been named as defendants in Mary C. Best
v. Inforte Corp.; Goldman, Sachs & Co.; Salomon Smith Barney, Inc.; Philip
S. Bligh; Stephen C.P. Mack and Nick Padgett, Case No. 01 CV 10836, filed on
November 30, 2001 in Federal Court in the Southern District of New York (the
Case). The Case is among more than 300 putative class actions against certain
issuers, their officers and directors, and underwriters with respect to such
issuers initial public offerings, coordinated as In re Initial Public Offering
Securities Litigation, 21 MC 92 (SAS) (collectively, the Multiple IPO
Litigation). An amended class action complaint was filed in the Case on April
19, 2002. The amended complaint in the Case alleges violations of federal
securities laws in connection with Infortes initial public offering occurring
in February 2000 and seeks certification of a class of purchasers of Inforte
stock, unspecified damages, interest, attorneys and expert witness fees and
other costs. The amended complaint does not allege any claims

10

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relating
to any alleged misrepresentations or omissions with respect to our business.
The individual defendants (Messrs. Bligh, Mack and Padgett) have been dismissed
from the case without prejudice pursuant a stipulated dismissal and a tolling
agreement. We have moved to dismiss the plaintiffs case. On February 19, 2002,
the Court granted this motion in part, denied it in part and ordered that
discovery in the case may commence. The Court dismissed with prejudice the
plaintiffs purported claim against Inforte under Section 10(b) of the
Securities Exchange Act of 1934, but left in place the plaintiffs claim under
Section 11 of the Securities Act of 1933.

Inforte
has entered into a Memorandum of Understanding (the MOU), along with most of
the other defendant issuers in the Multiple IPO Litigation, whereby such
issuers and their officers and directors (including Inforte and Messrs. Bligh,
Mack and Padgett) will be dismissed with prejudice from the Multiple IPO
Litigation, subject to the satisfaction of certain conditions. Under the terms
of the MOU, neither Inforte nor any of its formerly named individual defendants
admit any basis for liability with respect to the claims in the Case. The MOU
provides that insurers for Inforte and the other defendant issuers
participating in the settlement will pay approximately $1 billion to settle the
Multiple IPO Litigation, except that no such payment will occur until claims
against the underwriters are resolved and such payment will be paid only if the
recovery against the underwriters for such claims is less than $1 billion and
then only to the extent of any shortfall. Under the terms of the MOU, neither
Inforte nor any of its named directors will pay any amount of the settlement.
The MOU further provided that participating defendant issuers will assign
certain claims they may have against the defendant underwriters in connection
with the Multiple IPO Litigation. The MOU is subject to the satisfaction of
certain conditions, including, among others, approval of the court and the
issuers insurers.

Inforte
has been named as a co-defendant in a lawsuit captioned Braun Consulting, Inc.
v. Inforte Corporation and Scott A. Stawski, filed in July 2003 in the Circuit
Court of Cook County, Illinois. Braun Consulting, Inc. (Braun) has alleged
that Inforte intentionally interfered with Mr. Stawskis employment agreement
with Braun and aided and abetted Mr. Stawskis alleged breach of his employment
agreement and alleged misappropriation of Brauns trade secrets. Braun is
seeking injunctive relief and an unspecified amount of money damages. Inforte
intends to vigorously defend the action.

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

No
matters were submitted to a vote of security holders during the fourth quarter
of the fiscal year ended December 31, 2003.

|ITEM 4A. | EXECUTIVE
  OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------

The
following table provides information with respect to our executive officers:

| | Name            |  | Age |  | Position                               
| | --------------- |  | --- |  | ---------------------------------------
| |                 |  |     |  |                                        
| | Philip S. Bligh |  | 36  |  | Chief Executive Officer
  and Chairman 
| |                 |  |     |  |                                        
| | David A. Sutton |  | 40  |  | Chief Operating Officer
  and President
| |                 |  |     |  |                                        
| | Nick Heyes      |  | 39  |  | Chief Financial Officer
  and Secretary

Philip S. Blighco-founded Inforte and has
served as chairman of the board of directors of Inforte since inception in
September 1993. Mr. Bligh also currently serves as chief executive officer.
Before founding Inforte, Mr. Bligh served in various technology consulting
roles for Accenture from October 1988 to February 1991 and as a project manager
for Systems Software Associates, an enterprise software provider, from April
1991 through Infortes founding. Mr. Bligh holds a B.S. in chemical engineering
from University College, London, England.

David A. Suttonwas appointed a President
and Chief Operating Officer of Inforte Corp. in December 2003. A leading
authority on Enterprise Marketing Management, Mr. Sutton has led numerous
business strategy, marketing strategy and transformation engagements for Global
2000 companies and government agencies, including Coca-Cola, Department of
Defense, Georgia-Pacific, Intuit, Internal Revenue Service, JP Morgan Chase,
Miller Brewing, Texaco and Toshiba. Prior to Inforte, Mr. Sutton served as
Senior Vice President of Strategic Services at CSC Index Inc. and prior to that
served on various consulting positions with Booz Allen Hamilton management
consultants. Mr. Sutton holds an MBA from George Washington University and a
Bachelors degree from the University of Virginia.

Nick Heyeshas served as Infortes chief
financial officer since October 2003. Mr. Heyes also served Inforte as an
executive vice president since October 1999 with comprehensive operational
experience, including overall responsibility for the U.S. consulting
organization, general manager of the technology business unit, and head of
delivery operations and human resources. Prior to joining Inforte Mr. Heyes was
an associate partner at Accenture. Mr. Heyes holds Bachelors and Masters
degrees in engineering and management from Birmingham University in the United
Kingdom.

11

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|ITEM 5. | MARKET
  FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|------- | -----------------------------------------------------------------------

Our
common stock is traded on the NASDAQ National Market under the symbol INFT.
The price range reflected in the table below is the high and low sales price for
our stock as reported by the NASDAQ National Market during each quarter of the
last two years. Our present policy is to retain earnings, if any, to finance
future growth. We have never paid cash dividends, although we may consider
doing so. In January 2001, Inforte announced that the board of directors
approved a stock repurchase program that allows Inforte to buy up to $25
million of Inforte shares. The program was completed in August 2002. The board
of directors approved an additional $5.0 million stock repurchase program on
August 22, 2002. We stated at that time that we had no present plans to make
additional repurchases of stock, and as of December 31, 2003, we have made no
repurchases under this second program. As of March 3, 2004, there were approximately
3,009 stockholders, including stockholders of record and holders in street
name, and the closing price of Inforte shares of common stock as reported by
the NASDAQ National was $10.53.

|                       |  | Three Months Ended |      
|---------------------- |  | ------------------ | -----
|                       |  |                    |      
|                       |  | Mar. 31,
  2002    |      
|                       |  |                    |      
|Price range per share: |  |                    |      
|Low                    |  | $                  | 8.11 
|High                   |  | $                  | 14.10

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|ITEM 6. | SELECTED
  FINANCIAL DATA
|------- | -------------------------

The
following selected financial data should be read in conjunction with our
consolidated financial statements and related notes and Managements Discussion
and Analysis of Financial Condition and Results of Operations included
elsewhere in this Form 10-K. The consolidated statement of operations data for
the years ended 2001, 2002 and 2003 and the balance sheet data as of December
31, 2002 and 2003 are derived from our audited consolidated financial
statements, which are included elsewhere in this Form 10-K. The consolidated
statement of operations data for the years ended 1999 and 2000 and the
balance sheet data as of December 31, 1999, 2000 and 2001 are derived
from our audited consolidated financial statements, which are not included in
this Form 10-K.

|                                                                                           |  | Year ended December 31,               |       
|------------------------------------------------------------------------------------------ |  | ------------------------------------- | ------
|                                                                                           |  |                                       |       
|                                                                                           |  | 1999                                  |       
|                                                                                           |  |                                       |       
|                                                                                           |  | (in thousands, except per share data) |       
|Consolidated
  Statement of Operations Data                                                |  |                                       |       
|Revenue before
  reimbursements (net revenue)                                              |  | $                                     | 30,088
|Operating expenses before
  reimbursements:                                                |  |                                       |       
|Project
  personnel and related expenses                                                   |  |                                       | 12,846
|Sales
  and marketing                                                                      |  |                                       | 4,949 
|Recruiting,
  retention and training                                                       |  |                                       | 2,987 
|Management
  and administrative                                                            |  |                                       | 5,617 
|Non-cash,
  non-recurring stock compensation expense                                       |  |                                       |      
|                                                                                           |  |                                       |       
|Total
  operating expenses before reimbursements                                           |  |                                       | 26,399
|                                                                                           |  |                                       |       
|Operating income (loss)                                                                    |  |                                       | 3,689 
|Interest income, net and
  other                                                           |  |                                       | 147   
|                                                                                           |  |                                       |       
|Income before income taxes                                                                 |  |                                       | 3,836 
|Income tax expense                                                                         |  |                                       | 1,287 
|                                                                                           |  |                                       |       
|Net income (loss)                                                                          |  | $                                     | 2,549 
|                                                                                           |  |                                       |       
|Net income (loss) per
  share:                                                             |  |                                       |       
|Basic                                                                                      |  |                                       |       
|                                                                                           |  |                                       |       
|Diluted                                                                                    |  |                                       |       
|                                                                                           |  |                                       |       
|Weighted average common shares outstanding:                                                |  |                                       |       
|Basic                                                                                      |  |                                       |       
|                                                                                           |  |                                       |       
|Diluted                                                                                    |  |                                       |       
|                                                                                           |  |                                       |       
|Reconciliation
  of net income on a GAAP
       basis to Non-GAAP supplemental net income: |  |                                       |       
|Net income (loss)                                                                          |  |                                       | 2,549 
|Add:                                                                                       |  |                                       |       
|Non-cash,
  non-recurring stock compensation 
            expense(1)                       |  |                                       |       
|Subtract:                                                                                  |  |                                       |       
|Tax
  effect of converting to C-corp. from
            S-corp.(2)                          |  |                                       | (255  
|                                                                                           |  |                                       |       
|Non-GAAP supplemental net
  income                                                         |  | $                                     | 2,294 
|                                                                                           |  |                                       |       
|Non-GAAP supplemental net
  income per share:                                              |  |                                       |       
|Basic                                                                                      |  | $                                     | 0.27  
|                                                                                           |  |                                       |       
|Diluted                                                                                    |  | $                                     | 0.21  
|                                                                                           |  |                                       |       
|Weighted-average common
  shares outstanding:                                              |  |                                       |       
|Basic                                                                                      |  |                                       | 8,636 
|                                                                                           |  |                                       |       
|Diluted                                                                                    |  |                                       | 10,786
|                                                                                           |  |                                       |       

13

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|                                                          |  | Year ended December 31,               |       
|--------------------------------------------------------- |  | ------------------------------------- | ------
|                                                          |  |                                       |       
|                                                          |  | 1999                                  |       
|                                                          |  |                                       |       
|                                                          |  | (in thousands, except per share data) |       
|Balance Sheet
  Data (at period end):                     |  |                                       |       
|Cash and short-term and
  long-term marketable securities |  | $                                     | 3,792 
|Working capital                                           |  |                                       | 793   
|Total assets                                              |  |                                       | 12,957
|Long-term debt, net of
  current portion                  |  |                                       |      
|Stockholders equity                                      |  |                                       | 2,301 

---

| | (1) | In 2001 Inforte incurred a
  non-cash, non-recurring stock compensation expense of $1,374 for a
  performance-based option, which is recognized as an expense under GAAP. This
  option was granted in 1997 with an exercise price equal to the fair market
  value at the time of the grant and with vesting based on achieving specified
  corporate performance criteria. Once vesting is probable (the measurement
  date) GAAP requires recording of an expense equal to the difference between
  fair market value on the measurement date and exercise price times the number
  of shares granted under the option. With typical time based vesting criteria
  the measurement date equals the grant date and no expense is recorded
  normally. Even though the vesting criteria on this performance-based option
  were more difficult to achieve than the criteria on a normal time-based
  option  making the option less valuable from the employees perspective and
  more advantageous from Infortes perspective  GAAP results in lower earnings
  with this performance-based option than if the option were time based.                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The Non-GAAP supplemental
  information shows results excluding the non-cash, non-recurring stock
  compensation expense described in the previous paragraph. This Non-GAAP
  supplemental information is a non-GAAP financial measure that may not conform
  to similarly titled measures reported by other companies. We present this
  Non-GAAP supplemental information to allow for comparability of our results
  for this period with the results of other periods. The stock compensation
  expense from this performance-based option did not occur in prior periods and
  will not occur in future periods. We believe that comparability of results
  from different periods is reduced significantly without this Non-GAAP
  supplemental presentation, considering the magnitude of the stock
  compensation expense relative to our normal level of operating expenses. In
  addition to providing comparability, we believe the Non-GAAP supplemental
  information corrects for an anomalous situation where GAAP earnings are lower
  with this performance-based option than with a time-based option even though
  Inforte is economically better off with the performance-based option since it
  has more difficult to achieve vesting criteria. The stock compensation
  expense had no impact on income tax expense.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (2) | In 1999, Inforte was a C
  corporation; however, the conversion from a sub-chapter S corporation to a C
  corporation on January 1, 1999 resulted in a tax benefit for accounting
  purposes due to the recording of deferred tax benefits, increasing net income
  (loss) per share. The Non-GAAP supplemental net income (loss) per share for
  the year ended December 31, 1999 reflects the net income (loss) per share
  Inforte would have reported without the one-time conversion to a C
  corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | During the three years
  ended December 31, 1998, Inforte operated as a sub-chapter S corporation
  under the Internal Revenue Code and in some of the states in which we did
  business. As a result, any taxable earnings or loss flowed through to Inforte
  stockholders. The Non-GAAP supplemental net income data for 1998 assumes that
  Inforte was subject to income tax had we always operated as a C corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

14

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|ITEM 7. | MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | ---------------------------------------------------------------------------------------

You
should read the following discussion in conjunction with Selected Financial Data
and our consolidated financial statements, together with the notes to those
statements, included elsewhere in this Form 10-K. The following discussions
contain forward-looking statements that involve risks, uncertainties, and
assumptions such as statements of our plans, objectives, expectations and
intentions. Our actual results may differ materially from those discussed in
these forward-looking statements because of the risks and uncertainties
inherent in future events, particularly those identified in Risk Factors.

OVERVIEW

Inforte
Corp. is a customer strategy and solutions consultancy that helps clients
improve performance by tying together customer and corporate strategy. Inforte
combines strong business and operational planning with innovative software
solutions to ensure its client base serves the right customers in the right
ways to generate the greatest return. Founded in 1993, Inforte is headquartered
in Chicago and has offices in Atlanta, Dallas, London, Los Angeles, New York and
San Francisco.

Our
revenue is derived almost entirely through the performance of professional
services. The majority of the services we perform is on a time and materials
basis; however, we also perform services on a fixed-price basis if this structure
best fits out clients preferences or the requirements of the project.
Typically, the first portion of an engagement involves a strategy project or a
discovery phase lasting 30 to 60 days. This work enables us to determine with
our clients the scope of successive phases of work. These successive phases of
work can be additional strategy phases, or phases for technology design and
implementation, and generally last three to nine months. If a project is to be
performed on a fixed price basis, the fixed price is based upon estimates from
senior personnel in our consulting organization who project the length of the
engagement, the number of people required to complete the engagement and the
skill level and billing rates of those people. We then adjust the fixed price
based on various qualitative risk factors such as the aggressiveness of the
delivery deadline, the technical complexity of the solution and the value of
the solution delivered to the client. We typically ask clients to pay 25%-50%
of our fixed price projects in advance to enable us to secure a project team in
a timeframe that is responsive to the clients needs.

Results of Operations

The
following table sets forth the percentage of net revenue of certain items
included in Infortes Non-GAAP supplemental (1) consolidated statement of
operations:

|                                                                                            |  | Year ended December 31, |      
|------------------------------------------------------------------------------------------- |  | ----------------------- | -----
|                                                                                            |  |                         |      
|                                                                                            |  | 2001                    |      
|                                                                                            |  |                         |      
|Revenue before
  reimbursements (net revenue)                                               |  |                         | 100.0
|Operating expenses before
  reimbursements:                                                 |  |                         |      
|Project
  personnel and related expenses                                                    |  |                         | 55.2 
|Sales
  and marketing                                                                       |  |                         | 14.8 
|Recruiting,
  retention and training                                                        |  |                         | 6.0  
|Management
  and administrative                                                             |  |                         | 27.7 
|                                                                                            |  |                         |      
|Total operating expenses
  before reimbursements                                            |  |                         | 103.7
|                                                                                            |  |                         |      
|Operating income (loss)                                                                     |  |                         | (3.7 
|Interest income, net and
  other                                                            |  |                         | 7.2  
|                                                                                            |  |                         |      
|Income before income taxes                                                                  |  |                         | 3.5  
|Income tax expense                                                                          |  |                         | 1.1  
|                                                                                            |  |                         |      
|Net income                                                                                  |  |                         | 2.5  
|                                                                                            |  |                         |      
|Reconciliation
  of net income on a Non-GAAP 
       supplemental basis to GAAP net income: |  |                         |      
|Non-GAAP supplemental net
  income                                                          |  |                         | 2.5  
|                                                                                            |  |                         |      
|Subtract: Non-cash,
  non-recurring stock
       compensation expense(1)                    |  |                         | (2.9 
|                                                                                            |  |                         |      
|GAAP basis net loss                                                                         |  |                         | (0.4 
|                                                                                            |  |                         |      

15

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---

| | (1) | In 2001 Inforte incurred a
  non-cash, non-recurring stock compensation expense of $1,374 for a
  performance-based option, which is recognized as an expense under GAAP. This
  option was granted in 1997 with an exercise price equal to the fair market
  value at the time of the grant and with vesting based on achieving specified
  corporate performance criteria. Once vesting is probable (the measurement
  date) GAAP requires recording of an expense equal to the difference between
  fair market value on the measurement date and exercise price times the number
  of shares granted under the option. With typical time based vesting criteria
  the measurement date equals the grant date and no expense is recorded
  normally. Even though the vesting criteria on this performance-based option
  were more difficult to achieve than the criteria on a normal time-based option
   making the option less valuable from the employees perspective and more
  advantageous from Infortes perspective  GAAP results in lower earnings with
  this performance-based option than if the option were time based.                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The Non-GAAP supplemental
  information shows results excluding the non-cash, non-recurring stock
  compensation expense described in the previous paragraph. This Non-GAAP
  supplemental information is a non-GAAP financial measure that may not conform
  to similarly titled measures reported by other companies. We present this
  Non-GAAP supplemental information to allow for comparability of our results
  for this period with the results of other periods. The stock compensation
  expense from this performance-based option did not occur in prior periods and
  will not occur in future periods. We believe that comparability of results
  from different periods is reduced significantly without this Non-GAAP
  supplemental presentation, considering the magnitude of the stock
  compensation expense relative to our normal level of operating expenses. In
  addition to providing comparability, we believe the Non-GAAP supplemental
  information corrects for an anomalous situation where GAAP earnings are lower
  with this performance-based option than with a time-based option even though
  Inforte is economically better off with the performance-based option since it
  has more difficult to achieve vesting criteria. The stock compensation
  expense had no impact on income tax expense.

Quarterly Results of Operations

The
following tables set forth certain unaudited quarterly results of operations of
Inforte for 2002 and 2003. The quarterly operating results are not necessarily
indicative of future results of operations.

|                                                 |  | Three Months Ended (unaudited) |           
|------------------------------------------------ |  | ------------------------------ | ----------
|                                                 |  |                                |           
|                                                 |  | Mar. 31,
  2002                |           
|                                                 |  |                                |           
|                                                 |  |                                |           
|Revenue before
  reimbursements (net revenue)    |  | $                              | 9,434,014 
|Operating expenses before
  reimbursements:      |  |                                |           
|Project
  personnel and related expenses         |  |                                | 5,001,725 
|Sales
  and marketing                            |  |                                | 1,517,606 
|Recruiting,
  retention and training             |  |                                | 374,448   
|Management
  and administrative                  |  |                                | 3,004,236 
|                                                 |  |                                |           
|Total operating expenses
  before reimbursements |  |                                | 9,898,015 
|                                                 |  |                                |           
|Operating income (loss)                          |  |                                | (464,001  
|Interest income, net, and
  other                |  |                                | 564,329   
|                                                 |  |                                |           
|Income before income taxes                       |  |                                | 100,328   
|Income tax expense
  (benefit)                   |  |                                | (35,250   
|                                                 |  |                                |           
|Net income                                       |  | $                              | 135,578   
|                                                 |  |                                |           
|Net income per share                             |  |                                |           
|Diluted                                          |  | $                              | 0.01      
|                                                 |  |                                |           
|Weighted-average common
  shares outstanding:    |  |                                |           
|Diluted                                          |  |                                | 12,213,343
|                                                 |  |                                |           

16

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|                                                 |  | Three Months Ended (unaudited) |      
|------------------------------------------------ |  | ------------------------------ | -----
|                                                 |  |                                |      
|                                                 |  | Mar. 31,
  2002                |      
|                                                 |  |                                |      
|As a
  percentage of net revenue:                |  |                                |      
|Revenue before
  reimbursements (net revenue)    |  |                                | 100.0
|Operating expenses before
  reimbursements:      |  |                                |      
|Project
  personnel and related expenses         |  |                                | 53.0 
|Sales
  and marketing                            |  |                                | 16.1 
|Recruiting,
  retention and training             |  |                                | 4.0  
|Management
  and administrative                  |  |                                | 31.8 
|                                                 |  |                                |      
|Total operating expenses
  before reimbursements |  |                                | 104.9
|                                                 |  |                                |      
|Operating income (loss)                          |  |                                | (4.9 
|Interest income, net, and
  other                |  |                                | 6.0  
|                                                 |  |                                |      
|Income before income taxes                       |  |                                | 1.1  
|Income tax expense
  (benefit)                   |  |                                | (0.4 
|                                                 |  |                                |      
|Net income                                       |  |                                | 1.4  
|                                                 |  |                                |      

|                                                 |  | Three Months Ended (unaudited) |           
|------------------------------------------------ |  | ------------------------------ | ----------
|                                                 |  |                                |           
|                                                 |  | Mar. 31,
  2003                |           
|                                                 |  |                                |           
|Revenue before
  reimbursements (net revenue)    |  | $                              | 8,292,732 
|Operating expenses before
  reimbursements:      |  |                                |           
|Project
  personnel and related expenses         |  |                                | 4,346,312 
|Sales and marketing                              |  |                                | 1,404,708 
|Recruiting, retention and
  training             |  |                                | 142,433   
|Management and
  administrative                  |  |                                | 2,331,583 
|                                                 |  |                                |           
|Total operating expenses
  before reimbursements |  |                                | 8,225,036 
|                                                 |  |                                |           
|Operating income                                 |  |                                | 67,696    
|Interest income, net, and
  other                |  |                                | 420,542   
|                                                 |  |                                |           
|Income before income taxes                       |  |                                | 488,238   
|Income tax expense                               |  |                                | 44,125    
|                                                 |  |                                |           
|Net income                                       |  | $                              | 444,113   
|                                                 |  |                                |           
|Net income per share:                            |  |                                |           
|Diluted                                          |  | $                              | 0.04      
|                                                 |  |                                |           
|Weighted-average common
  shares outstanding:    |  |                                |           
|Diluted                                          |  |                                | 10,952,705
|                                                 |  |                                |           

|                                               |  | Three Months Ended (unaudited) |      
|---------------------------------------------- |  | ------------------------------ | -----
|                                               |  |                                |      
|                                               |  | Mar. 31,
  2003                |      
|                                               |  |                                |      
|As a
  percentage of net revenue:              |  |                                |      
|Revenue before
  reimbursements (net revenue)  |  |                                | 100.0
|Operating expenses before reimbursements:      |  |                                |      
|Project
  personnel and related expenses       |  |                                | 52.4 
|Sales
  and marketing                          |  |                                | 16.9 
|Recruiting,
  retention and training           |  |                                | 1.7  
|Management
  and administrative                |  |                                | 28.1 
|                                               |  |                                |      
|Total operating expenses before reimbursements |  |                                | 99.2 
|                                               |  |                                |      
|Operating income                               |  |                                | 0.8  
|Interest income, net, and
  other              |  |                                | 5.1  
|                                               |  |                                |      
|Income before income taxes                     |  |                                | 5.9  
|Income tax expense                             |  |                                | 0.5  
|                                               |  |                                |      
|Net income                                     |  |                                | 5.4  
|                                               |  |                                |      

17

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---

Years ended December 31, 2002 and 2003

Net revenue.Net revenue excludes
reimbursable expenses that are billed to our clients. Net revenue decreased
$7.7 million or 19% to $32.7 million for the year ended December 31, 2003 from
$40.4 million for the year ended December 31, 2002. We attribute this decline
in net revenue to the slow growth rate of the U.S. economy and the negative
impact that economic uncertainty has had on information technology (IT)
spending. These factors have depressed the market for strategic technology services
over the last 36 months. For the year ended December 31, 2003, we had 24
significant clients with each of these clients contributing $1.2 million to net
revenue on average. We had 29 significant clients during the year ended
December 31, 2002, each contributing $1.3 million to net revenue on average. We
had two significant clients contributing more than 10% from net revenue each in
2003 and no clients contributed more than 10% from net revenue in 2002.

Project personnel and related expenses. Project
personnel and related expenses consist primarily of compensation and benefits
for our professional employees who deliver consulting services and
non-reimbursable project costs. All labor costs for project personnel are
included in project personnel and related expenses. Project personnel and
related expenses decreased $2.7 million or 13% to $17.3 million for the year
ended December 31, 2003, from $19.9 million for the year ended December 31,
2002. The decrease results, in part, from reductions in consulting headcount.
We employed 151 and 172 consultants on December 31, 2003 and 2002,
respectively. Further, project personnel and related expenses were reduced both
in 2002 and 2003 by a downward adjustment in the allowance for doubtful
accounts which was $550,000 and $100,000, respectively. Our allowance for
doubtful accounts was $0.5 million as of December 31, 2003, compared to $0.6
million as of December 31, 2002. The revised balances reflect more accurately
our exposure to loss from non-paying customers, due to an overall reduction in
business activity. The adjustments in both years were not due to any write-off
of a specific customer account.

Project
personnel and related expenses represented 52.9% of net revenue for the year
ended December 31, 2003, compared to 49.4% for the year ended December 31,
2002. This increase is due to the higher use of subcontractors in 2003 in
addition to an escalation in the non-billable project related expenses. Net
revenue per consultant was $217,000 in the year ended December 31, 2003, up
from $214,000 in the year ended December 31, 2002. The slight change in net
revenue per consultant versus the prior year is a result of the small increase
in our effective hourly rate.

In
June 2001 Inforte offered a six-to-nine-month voluntary leave of absence
program and a voluntary resignation program to employees in underutilized
areas. Approximately 90 people participated in the programs. Individuals who
selected the leave of absence program received compensation at 20%-25% of
regular pay if they remained available to return to full-time service. Salary
costs for employees on leave of absence were expensed as incurred and included
in the quarters ended September 2001 through June 2002 with the amounts
declining in the later quarters. In January 2002, Inforte offered again a
voluntary program similar to the June 2001 program, however, these latter
programs were smaller in scope, involving approximately 30 people. In the
fourth quarter 2002, Inforte enacted a further headcount reduction program,
affecting approximately 20 individuals. All costs for this program were
expensed in fourth quarter 2002. There were no significant headcount-reduction
programs in the twelve months ended December 31, 2003.

Sales and marketing. Sales and marketing
expenses consist primarily of compensation, benefits and travel costs for
employees in the market development and practice development groups and costs
to execute marketing programs. Sales and marketing and expenses decreased $1.4
million or 23% to $4.6 million for the year ended December 31, 2003 from $6.1
million in 2002. This decrease is due to lower headcount in this area,
resulting in lower salary and benefit costs and a decrease in travel expense.
Total sales and marketing headcount was 26 as of December 31, 2001, 22 as of
December 31, 2002 and 14 as of December 31, 2003. Sales and marketing expenses
as a percentage of net revenue dropped in 2003 to 14.2% from 15.0% in 2002.

Recruiting, retention and training.Recruiting,
retention and training expenses consist of compensation, benefits, and travel
costs for personnel engaged in human resources; costs to recruit new employees;
costs of human resources programs; and training costs. Recruiting, retention
and training expenses decreased by $0.5 million or 39% to $0.7 million for the
year ended December 31, 2003 from $1.2 million for the year ended December 31,
2002. The decrease in spending is due primarily to less training activity due
to lower company-wide headcount. Total employees declined from 294 as of
December 31, 2001 to 229 as of December 31, 2002 to 189 as of December 31,
2003. Total recruiting retention and training headcount was 9 as of December
31, 2001, 5 as of December 31, 2002 and 2003. In addition, in the current
economic environment of higher unemployment, recruiting efforts require fewer
expenses, such as recruiting finder fees, signing bonuses, relocation
allowances and employee referral bonuses to identify and attract qualified
candidates. Recruiting, retention and training expenses as a percentage of net
revenue decreased to 2.3% for the year ended December 31, 2003 from 3.0% in
2002.

Management and administrative. Management
and administrative expenses consist primarily of compensation, benefits and
travel costs for management, finance, information technology and facilities
personnel, together with rent, telecommunications,

18

---

---

audit,
legal, business insurance, and depreciation and amortization of capitalized
computers, purchased software and property. Management and administrative
expenses decreased $3.4 million or 27% to $9.4 million for the year ended
December 31, 2003 from $12.9 million in 2002. For the year ended December 31,
2003, management and administrative expenses decreased to 28.9% as a percent of
revenue from 31.9% in the prior year period, as net revenue declined at a
slower rate than management and administrative expenses. During 2003 most
management and administrative areas had lower expenses relative to 2002.
Expense reductions related primarily to lower headcount and lower facilities
costs. Total management and administrative headcount declined from 30 as of
December 31, 2002 to 19 as of December 31, 2003. Lease expense in 2003 was
lower than lease expense in 2002 due to a write-down to lease expense in 2002
of $0.6 million necessitated by a downward revision in our initial estimate of
sublease income due to a reduction in the rental price of office space. In
addition to that, in the third quarter on 2003, we reversed $146,000 of
previously recognized losses as we succeeded in subletting a portion of the
abandoned office space, which had been initially regarded as unsuitable for
sublease. The initial charge in 2001 was determined based on future lease
obligations less estimated sublease income.

Interest
income, net and other. During the year ended December 31, 2003, interest
income, net and other decreased $0.7 million, or 35% to $1.4 million. The
decrease was due to the reinvestment of matured securities into similar type
securities at lower market interest yields.

Income
tax expense. Income
tax expense for the year ended December 31, 2003 was 10.3% of pre-tax income
versus income tax expense of 28.2% of pre-tax income in 2002. The decrease in
the effective income tax rate results primarily from a reduction of income tax
expense by $500,000 to account for a decline in certain estimates for
nondeductible expenses and state and international income tax liabilities,
offset in part by a drop in 2003 tax-exempt interest income as a percentage of
pretax book income.

Years ended December 31, 2001 and 2002

Net
revenue. Net revenue
excludes reimbursable expenses that are billed to our clients. Net revenue
decreased $7.4 million or 15% to $40.4 million for the year ended December 31,
2002 from $47.7 million for the year ended December 31, 2001. We attribute this
decline in net revenue to the slow growth rate of the U.S. economy and the
negative impact that economic uncertainty has had on information technology (IT)
spending. These factors have depressed the market for strategic technology
services over the 24 months ending December 31, 2002. For the year ended
December 31, 2002, we had 29 significant clients with each of these clients
contributing $1.3 million to net revenue on average. We had 43 significant
clients during the year ended December 31, 2001, each contributing $1.0 million
to net revenue on average. From 1997 through 2002, we have not had a client
accounting for more than 10% of our net revenue.

Project personnel and related expenses.
Project personnel and related expenses consist primarily of compensation and
benefits for our professional employees who deliver consulting services and
non-reimbursable project costs. All labor costs for project personnel are
included in project personnel and related expenses. Project personnel and
related expenses decreased $6.4 million or 24% to $19.9 million for the year
ended December 31, 2002, from $26.3 million for the year ended December 31,
2001. The decrease results from reductions in consulting headcount. We employed
172 and 217 consultants on December 31, 2002 and 2001, respectively. Further,
project personnel and related expenses declined due to a $550,000 reduction in
the allowance for doubtful accounts during 2002. Our allowance for doubtful
accounts was $0.6 million as of December 31, 2002, compared to $1.15 million as
of December 31, 2001. This reduction was not due to any write-off of a specific
customer account.

Project
personnel and related expenses represented 49.4% of net revenue for the year
ended December 31, 2002, compared to 55.2% for the year ended December 31,
2001. This decrease is due to consulting headcount declining at a faster rate
than the rate of net revenue decline. Net revenue per consultant was $214,000
in the year ended December 31, 2002, up from $173,000 in the year ended
December 31, 2001. The increase in net revenue per consultant versus the prior
year results from higher consultant utilization as excess consulting capacity
was reduced, offset slightly by a small decline in our effective hourly rate.

In
June 2001 Inforte offered a six-to-nine-month voluntary leave of absence
program and a voluntary resignation program to employees in underutilized
areas. Approximately 90 people participated in the programs. Individuals who
selected the leave of absence program received compensation at 20%-25% of
regular pay if they remained available to return to full-time service.
Individuals who chose the voluntary resignation package received pay through
the end of August 2001. All costs related to resigning employees were included
either in our June 2001 quarter results or our September 2001 quarter results.
In October 2001, Inforte again offered voluntary programs similar to the June
2001 program, however, these latter program was smaller in scope, involving
approximately 20 people.

Sales
and marketing. Sales
and marketing expenses consist primarily of compensation, benefits and travel
costs for employees in the market development and practice development groups
and costs to execute marketing programs. Sales and marketing and  and costs to

19

---

---

expenses
decreased $1.0 million or 14% to $6.1 million for the year ended December 31,
2002 from $7.1 million in 2001. This decrease is due to lower headcount in this
area, resulting in lower salary and benefit costs and a decrease in travel
expense. Total sales and marketing headcount was 31 as of December 31, 2000, 26
as of December 31, 2001 and 22 as of December 31, 2002. Sales and marketing
expenses as a percentage of net revenue were stable in 2002 at 15.0% versus
14.8% in 2001.

Recruiting,
retention and training.
Recruiting, retention and training expenses consist of compensation, benefits,
and travel costs for personnel engaged in human resources; costs to recruit new
employees; costs of human resources programs; and training costs. Recruiting,
retention and training expenses decreased by $1.6 million or 57% to $1.2
million for the year ended December 31, 2002 from $2.9 million for the year
ended December 31, 2001. The decrease in spending is due primarily to less
training activity due to lower company-wide headcount and reduced headcount for
employees engaged in recruiting, retention and training. Total employees
declined from 442 as of December 31, 2000 to 294 as of December 31, 2001 to 229
as of December 31, 2002. Total recruiting retention and training headcount was
18 as of December 31, 2000, 9 as of December 31, 2001 and 5 as of December 31,
2002. Also, in the current economic environment of higher unemployment,
recruiting efforts require fewer expenses, such as recruiting finder fees,
signing bonuses, relocation allowances and employee referral bonuses to
identify and attract qualified candidates. Recruiting, retention and training
expenses as a percentage of net revenue decreased to 3.0% for the year ended
December 31, 2002 from 6.0% in 2001.

Management
and administrative.
Management and administrative expenses consist primarily of compensation,
benefits and travel costs for management, finance, information technology and
facilities personnel, together with rent, telecommunications, audit, legal,
business insurance, and depreciation and amortization of capitalized computers,
purchased software and property. Management and administrative expenses
decreased $0.3 million or 2% to $12.9 million for the year ended December 31,
2002 from $13.2 million in 2001 For the year ended December 31, 2002,
management and administrative expenses increased as a percent of revenue to
31.9% from 27.7% in the prior year period, as net revenue declined at a greater
rate than management and administrative expenses. During 2002 some management
and administrative areas had lower expenses relative to 2001, while other areas
had higher expenses. Expense reductions related primarily to lower headcount
and lower facilities costs. Total management and administrative headcount
declined from 53 as of December 31, 2000 to 42 as of December 31, 2001 and 30
as of December 31, 2002. Lease expense in 2002 is lower than lease expense in
2001 due to a write-down of $1.1 million in 2001 for abandoned lease space
which we were working to sublet. The 2001 charge was determined based on future
lease obligations less estimated sublease income. During 2002 we recorded an
additional charge of $0.6 million to lease expense as our estimate of sublease
income has decreased due to a reduction in the rental price of office space.
Offsetting the overall reduction in management and administrative salary
expense were increased costs for variable executive compensation resulting from
improved operating income, severance costs related to senior management
terminations and start-up costs for new practice areas. Business insurance
costs also increased significantly.

Interest
income, net and other.
During the year ended December 31, 2002, interest income, net and other
decreased $1.3 million, or 38% to $2.1 million. The decrease was due to the
reinvestment of matured securities into similar type securities at lower market
interest yields and also due to the lower average cash balances as a result of
Infortes stock buyback program.

Income
tax expense. Income
tax expense for the year ended December 31, 2002 was 28.2% of pre-tax income
versus income tax expense of 161.5% of pre-tax income in 2001. The unusually
high tax rate for 2001 results primarily from expenses not deductible for
income tax purposes, the most significant of which is the non-cash,
non-recurring stock compensation expense. Excluding the non-cash, non-recurring
stock compensation expense, effective income tax expense was 29.9% of pre-tax
income in 2001. The decrease of the tax rate in 2002 versus 2001, excluding the
non-cash, non-recurring stock compensation expense, reflects the adjustment of
certain estimates for non-deductible expenses and state and internal tax
obligations. This decrease is partially offset by the tax effect of having less
interest income from tax exempt and tax advantaged investments. The 2002 income
tax expense was the sum of a) operating income times a 41.6% combined federal
and state tax rate and b) interest income, net and other times a reduced tax
rate of 26.5%.

Liquidity and Capital Resources

Cash
and cash equivalents increased from $19.2 million as of December 31, 2002 to
$24.1 million as of December 31, 2003. Short-term marketable securities
decreased from $31.3 million as of December 31, 2002 to $25.5 million as of
December 31, 2003. Long-term marketable securities increased from $16.8 million
as of December 31, 2002 to $18.2 million as of December 31, 2003. Short-term
and long-term marketable securities are available-for-sale securities
consisting of commercial paper, U.S. government or municipal notes and bonds,
corporate bonds and corporate auction preferreds. In total, cash and cash
equivalents, short-term and long-term marketable securities increased from
$67.3 million to $67.7 million during the year ended December 31, 2003.

20

---

---

During
2003, Infortes cash flow from operations was positive $0.8 million and capital
expenditures were $0.4 million, resulting in $0.4 million of positive free cash
flow (cash flow from operations minus capital expenditures). Financing
activities resulted in a cash inflow of $0.6 million from employees
participating in stock purchase and stock option plans.

In
January 2001, Inforte announced that the board of directors approved a stock
repurchase program that allows Inforte to buy up to $25 million of Inforte
shares. The program was completed in August 2002. The board of directors
approved an additional $5.0 million stock repurchase program on August 22,
2002. We stated at that time that we had no present plans to make additional
repurchases of stock, and as of December 31, 2003, we have made no repurchases
under this second program. On December 31, 2003, Inforte had 10,957,432 shares
outstanding and $67.7 million in cash and marketable securities, resulting in
$6.18 of cash and marketable securities per basic share. As of December 31,
2003, the public float (shares not held by executive officers and directors)
totaled 6.8 million shares or 62% of total outstanding shares.

Inforte
believes that its current cash, cash equivalents and marketable securities will
be sufficient to meet working capital and capital expenditure requirements for
the foreseeable future.

All
highly liquid investments with maturities of three months or less when
purchased are considered cash equivalents. Cash and cash equivalent balances
consist of obligations of U.S. and U.K. banks, high-grade municipal and
U.S.government agencies bonds and other high quality, short-term obligations of
U.S. companies. Short-term and long-term marketable securities are
available-for-sale securities that are recorded at fair market value. The
difference between amortized cost and fair market value, net of tax, is shown
as a separate component of stockholders equity. The cost of securities
available-for-sale is adjusted for amortization of premiums and discounts to
maturity. Interest and amortization of premiums and discounts for all
securities are included in interest income.

Inforte
has several operating leases that have contractual cash obligations for future
payments. There are no other contractual obligations that require future cash
obligations or other commitments. The table below identifies all future
commitments.

|                                     |  | Payments
  Due by Period |      
|------------------------------------ |  | ------------------------ | -----
|                                     |  |                          |      
|                                     |  | Total                    |      
|                                     |  |                          |      
|                                     |  | (in thousands)           |      
|Contractual
  Obligations            |  |                          |      
|Long-term debt                       |  |                          |     
|Capital lease obligations            |  |                          |      
|Operating leases                     |  | $                        | 5,507
|Unconditional purchase
  obligations |  |                          |     
|Other long-term obligations          |  |                          |     
|                                     |  |                          |      
|Total contractual cash
  obligations |  | $                        | 5,507
|                                     |  |                          |      

Critical Accounting Policies

The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States of America, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and 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. Management bases its estimates on historical experience
and other assumptions, which it believes are reasonable. If actual amounts are
ultimately different from these estimates, the revisions are included in the
Companys results of operations for the period in which the actual amounts
become known.

Accounting
policies are considered critical when they require management to make
assumptions about matters that are highly uncertain at the time the estimate is
made and when different estimates than management reasonably could have used
have a material impact on the presentation of our financial condition, changes
in financial condition or results of operations.

Revenue
recognition, losses on fixed-price contracts, deferred revenue.We recognize revenue when all of the
following four criteria are met: persuasive evidence exists that we have an
agreement, service has been rendered, our price is fixed or determinable and
collectibility is reasonably assured. We recognize net revenue from fixed-price
contracts based on the ratio of hours incurred to total estimated hours. The
cumulative impact of any change in estimated hours to complete is reflected in
the period in which the changes become known. We recognize time-and-materials
net revenue as we perform the services. In November 2001, the Financial
Accounting Standards Boards Emerging Issues Task Force issued Topic 01-14,
Income Statement

21

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---

Characterization
of Reimbursements Received for Out-of-Pocket Expenses Incurred stating these
costs should be characterized as revenue in the income statement if billed to
customers. For each quarter beginning with the March 31, 2002 quarter, we
included reimbursable expenses in revenue and expense and we have reclassified prior
periods in the comparative consolidated financial statements as required by the
Financial Accounting Standards Board. This reclassification had no effect on
current or previously reported net income (loss) per share. For presentation
purposes, we show two components of total revenue: 1) revenue before
reimbursements, which we call net revenue, consisting of revenue for performing
consulting services; and 2) reimbursements, consisting of reimbursements we
receive from clients for out-of-pocket expenses incurred. We believe net
revenue is a more meaningful representation of our economic activity than total
revenue since it excludes pass-through, zero-margin expense reimbursements.

Financial Instruments.Short-term and
long-term marketable securities are available-for-sale securities which are
recorded at fair market value. The difference between amortized cost and fair
market value, net of tax effect, is shown as a separate component of
stockholders equity. The cost of securities available-for-sale is adjusted for
amortization of premiums and discounts to maturity. Interest and amortization
of premiums and discounts for all securities are included in interest income.

Allowance for doubtful accounts.An
allowance for doubtful accounts is maintained for potential credit losses. The
amount of the reserve is established analyzing all client accounts to determine
credit risk. In establishing a clients creditworthiness we consider whether
the client has a deteriorating or poor financial condition, limited financial
resources, poor or no payment history, a large relative accounts receivable
balance or a non-U.S. location.

Stock
compensation.At
December 31, 2002, Inforte has three stock-based employee compensation plans,
which are described more fully in footnote 9 of the Consolidated Financial
Statements. We account for stock-based employee compensation in accordance with
Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and have adopted the disclosure-only
provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation(SFAS
123) related to options issued to employees. All options granted under our
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant.

Bonus accruals. We have several bonus
programs that are based on individual and company performance. Revenue bonuses
are earned based on individual or roll up revenue credit assigned to salespeople,
client executives, other senior delivery personnel and senior management.
Margin bonuses are earned by all employees based on company or business unit
operating income performance. In addition, senior management may award
discretionary bonuses. All of these bonuses are expensed in the period in which
they are earned. A corresponding accrual is included on the balance sheet in
accrued expenses until the bonus is paid.

Income
Taxes.We account for
income taxes in accordance with Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes(SFAS
109), which requires the recognition of deferred income taxes based upon the
tax consequences of temporary differences between financial reporting and
income tax reporting by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts
and the tax basis of existing assets and liabilities. SFAS 109 also requires
that deferred tax assets be reduced by a valuation allowance if it is more
likely than not that some portion of the deferred tax asset will not be
realized.

In
connection with the preparation of our consolidated financial statements, we
are required to estimate our income tax liability for each of the tax
jurisdictions in which we operate. This process involves estimating our actual
current income tax expense and assessing temporary differences resulting from
differing treatment of certain income or expense items for income tax reporting
and financial reporting purposes. We also recognize as deferred tax assets the
expected future tax benefits of net operating loss carry forwards. In
evaluating the realizability of deferred tax assets associated with net
operating loss carry forwards, we consider, among other things, expected future
taxable income, the expected timing of the reversals of existing temporary
reporting differences, and the expected impact of tax planning strategies that
may be implemented to prevent the potential loss of future tax benefits.
Changes in, among other things, income tax legislation, statutory income tax
rates or future taxable income levels could materially impact the our valuation
of income tax assets and liabilities and could cause our income tax provision
to vary significantly among financial reporting periods.

Recently Issued Accounting Pronouncements

In
January 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation Number 46, Consolidation of Variable Interest Entities
(Interpretation No. 46). Interpretation No. 46 clarified the application of
Accounting Research Bulletin Number 51, Consolidated Financial Statements to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. Qualifying special purpose entities as defined by
FASB Statement Number 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities are excluded from the scope of
Interpretation No. 46. Interpretation No. 46 applied immediately to all
variable interest entities created after January

22

---

---

31,
2003 and was originally effective for fiscal periods beginning after July 1,
2003 for existing variable interest entities. In October 2003, the FASB
postponed the effective date of Interpretation No. 46 to December 31, 2003.

In
December 2003, a revised version of Interpretation 46 (Revised Interpretation
No. 46) was issued by the FASB. The revisions clarify some requirements, ease
some implementation problems, add new scope exceptions, and add applicability
judgments. Revised Interpretation No. 46 is required to be adopted by most
public companies no later than March 31, 2004. The adoption of Revised
Interpretation No. 46 will not have a material impact on our financial position
or results of operations.

In
May 2003, the FASB issued Statement Number 150, Accounting for Financial
Instruments with Characteristics of Liabilities, Equity, or Both (SFAS No.
150). This limited scope statement establishes standards for how certain
financial instruments with characteristics of both liabilities and equity are
to be classified and measured. In November 2003, the FASB issued FASB Staff
Position Number 150-3, which deferred indefinitely the effective date of SFAS
No. 150 as it relates to certain mandatorily redeemable non-controlling
interests. SFAS No. 150 was effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of SFAS No. 150 will not
have a material impact on our financial position or results of operations.

On
December 17, 2003, the Staff of the Securities and Exchange Commission (SEC or
the Staff) issued SAB 104, Revenue
Recognition, which amends SAB 101, Revenue
Recognition in Financial Statements. SAB 104s primary purpose is to
rescind accounting guidance contained in SAB 101 related to multiple element
revenue arrangements, superseded as a result of the issuance of EITF 00-21.
Additionally, SAB 104 rescinds the SECs Revenue
Recognition in Financial Statements Frequently Asked Questions and Answers(the
FAQ) issued with SAB 101 that had been codified in SEC Topic 13, Revenue Recognition. Selected portions of
the FAQ have been incorporated into SAB 104. While the wording of SAB 104 has
changed to reflect the issuance of EITF 00-21, the revenue recognition
principles of SAB 101 remain largely unchanged by the issuance of SAB 104. The
adoption of SAB 104 did not have a material impact on our financial statements.

Subsequent Events

On
March 12, 2004 Inforte acquired COMPENDIT, Inc., a leading provider of SAP
Business Intelligence implementation consulting services. Under the terms of
the merger agreement, Inforte paid $5.5 million in cash on closing with an
additional aggregate cash payment of $500,000 in cash within 45 days after
closing based on a closing statement calculation of cash less transaction
costs. Supplementary cash amounts of up to $6.3 million may be paid over 2005
and 2006 based on 2004 performance.

|ITEM 7A. | QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ------------------------------------------------------------

Foreign Currency Risk

During
2003, our international revenues were over 20% of our total net revenue. We
face additional risks internationally that we do not face domestically. Such
risks include longer customer payment cycles, adverse taxes and compliance with
local laws and regulations. Further, the effects of fluctuations in currency
exchange rates may adversely affect the results of operations. Finally, as the
U.S. economic slowdown has spread to the rest of the world, our ability to
obtain international revenue going forward could be limited.

Interest Rate Risk

As
of December 31, 2003 Infortes total short-term and long-term marketable
securities equaled $67.7 million. During 2003, interest income represented 71%
of Infortes pre-tax income. As a result, fluctuations in interest rates can
have a significant impact on our net income (loss) per share. We estimate that
the impact on interest income from a 1 percentage point change in interest
rates could change our annual net income (loss) per share by approximately
$0.06 per diluted share. Our estimate is calculated using investment balances
as of December 31, 2003 and diluted weighted average shares outstanding for the
year then ended.

|ITEM 8. | CONSOLIDATED
  FINANCIAL STATEMENTS
|------- | -----------------------------------

The
following consolidated financial statements, and the related notes thereto, of
Inforte and the Report of Independent Auditors are filed as a part of this Form
10-K.

|                                                     | Page
|---------------------------------------------------- | ----
|                                                     |     
|Report of Independent
  Certified Public Accountants | 24  
|Report of Independent
  Auditors                     | 25  
|Balance Sheets                                       | 26  
|Consolidated Statements of
  Operations              | 27  
|Statements of
  Stockholders Equity                 | 28  
|Statements of Cash Flows                             | 29  
|Notes to the Consolidated
  Financial Statements     | 30  

23

---

---

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Stockholders
and Board of Directors 
Inforte Corp. and subsidiaries

We
have audited the accompanying balance sheet of Inforte Corp. as of December 31,
2003, and the related consolidated statements of operations, stockholders
equity, and cash flows for the year ended December 31, 2003. These financial
statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with auditing standards generally accepted in
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Inforte Corp. at
December 31, 2003 and the results of their operations and their cash flows for
the year ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.

|                                                                                  | /s/ GRANT THORNTON LLP
|--------------------------------------------------------------------------------- | ----------------------
|                                                                                  |                       
|Chicago, Illinois                                                                 |                       
|January 23, 2004, except
  for Note 8 and Note 15 which are as of March 12, 2004. |                       

24

---

---

REPORT OF INDEPENDENT AUDITORS

Stockholders
and Board of Directors
Inforte Corp.

We
have audited the accompanying balance sheet of Inforte Corp. as of December 31,
2002, and the related consolidated statements of operations, stockholders
equity, and cash flows for each of the two years in the period ended December
31, 2002. These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Inforte Corp. at
December 31, 2002 and the results of their operations and their cash flows for
each of the two years in the period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States.

|                  |  | /s/
  ERNST & YOUNG LLP
|----------------- |  | -----------------------
|                  |  |                        
|Chicago, Illinois | 
|January 21, 2003  | 

25

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---

INFORTE
CORP.CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                     |  | December 31, |            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | -----------
|                                                                                                                                                                                     |  |              |            
|                                                                                                                                                                                     |  | 2002         |            
|                                                                                                                                                                                     |  |              |            
|Assets                                                                                                                                                                               |  |              |            
|Current assets:                                                                                                                                                                      |  |              |            
|Cash
  and cash equivalents                                                                                                                                                          |  | $            | 19,185,820 
|Short-term
  marketable securities                                                                                                                                                   |  |              | 31,340,299 
|Accounts
  receivable, less allowance for doubtful accounts of $600,000
       at December 31, 2002 and $500,000 at December
  31, 2003                                              |  |              | 4,499,960  
|Prepaid
  expenses and other current assets                                                                                                                                          |  |              | 1,098,219  
|Interest
  receivable on investment securities                                                                                                                                       |  |              | 496,599    
|Deferred
  income taxes                                                                                                                                                              |  |              | 1,224,005  
|                                                                                                                                                                                     |  |              |            
|                                                                                                                                                                                     |  |              |            
|Total
  current assets                                                                                                                                                               |  |              | 57,844,902 
|                                                                                                                                                                                     |  |              |            
|Computers, purchased
  software and property, net                                                                                                                                    |  |              | 1,077,827  
|Long-term marketable
  securities                                                                                                                                                    |  |              | 16,819,270 
|Deferred income taxes                                                                                                                                                                |  |              | 328,113    
|                                                                                                                                                                                     |  |              |            
|                                                                                                                                                                                     |  |              |            
|Total
  assets                                                                                                                                                                       |  | $            | 76,070,112 
|                                                                                                                                                                                     |  |              |            
|                                                                                                                                                                                     |  |              |            
|Liabilities
  and stockholders equity                                                                                                                                               |  |              |            
|Current liabilities:                                                                                                                                                                 |  |              |            
|Accounts
  payable                                                                                                                                                                   |  | $            | 240,361    
|Income
  taxes payable                                                                                                                                                               |  |              | 291,170    
|Accrued
  expenses                                                                                                                                                                   |  |              | 5,194,683  
|Accrued
  loss on disposal of leased property                                                                                                                                        |  |              | 1,126,229  
|Deferred
  revenue                                                                                                                                                                   |  |              | 4,486,727  
|                                                                                                                                                                                     |  |              |            
|Total
  current liabilities                                                                                                                                                          |  |              | 11,339,170 
|Stockholders
  equity:                                                                                                                                                              |  |              |            
|Preferred
  stock, $0.001 par value; 5,000,000 shares authorized, none     issued
  and outstanding at December 31, 2002 and 2003                                                    |  |              |           
|Common
  stock, $0.001 par value; authorized  50,000,000
       shares; issued and outstanding  10,799,386 as
  of December 31,
       2002 and 10,957,432 as of December 31, 2003 |  |              | 10,799     
|Additional
  paid-in capital                                                                                                                                                         |  |              | 79,192,280 
|Cost
  of common stock in treasury, 2,720,823 as of December 31,
            2002 and 2003                                                                                           |  |              | (24,997,277
|Retained
  earnings                                                                                                                                                                  |  |              | 10,276,174 
|Accumulated
  other comprehensive income                                                                                                                                             |  |              | 248,966    
|                                                                                                                                                                                     |  |              |            
|Total
  stockholders equity                                                                                                                                                         |  |              | 64,730,942 
|                                                                                                                                                                                     |  |              |            
|Total
  liabilities and stockholders equity                                                                                                                                         |  | $            | 76,070,112 
|                                                                                                                                                                                     |  |              |            

The accompanying notes are an integral part of these consolidated
financial statements.

26

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INFORTE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                    |  | Year ended December 31, |           
|----------------------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                                    |  |                         |           
|                                                                                    |  | 2001                    |           
|                                                                                    |  |                         |           
|Revenues:                                                                           |  |                         |           
|Revenue
  before reimbursements (net revenue)                                       |  | $                       | 47,735,606
|Reimbursements                                                                      |  |                         | 6,259,841 
|                                                                                    |  |                         |           
|Total
  Revenues                                                                    |  |                         | 53,995,447
|Operating expenses:                                                                 |  |                         |           
|Project
  personnel and related expenses                                            |  |                         | 26,333,782
|Reimbursed
  expenses                                                               |  |                         | 6,259,841 
|Sales
  and marketing                                                               |  |                         | 7,073,390 
|Recruiting,
  retention and training                                                |  |                         | 2,869,356 
|Management
  and administrative                                                     |  |                         | 13,207,051
|Non-cash,
  non-recurring stock compensation
            expense (see footnote
  2) |  |                         | 1,374,000 
|                                                                                    |  |                         |           
|Total
  operating expenses                                                          |  |                         | 57,117,420
|                                                                                    |  |                         |           
|Operating income (loss)                                                             |  |                         | (3,121,973
|Interest income, net and
  other                                                    |  |                         | 3,433,436 
|                                                                                    |  |                         |           
|Income before income taxes                                                          |  |                         | 311,463   
|Income tax expense                                                                  |  |                         | 503,134   
|                                                                                    |  |                         |           
|Net income (loss)                                                                   |  | $                       | (191,671  
|                                                                                    |  |                         |           
|Net income (loss) per
  share:                                                      |  |                         |           
|Basic                                                                               |  | $                       | (0.02     
|                                                                                    |  |                         |           
|Diluted                                                                             |  | $                       | (0.02     
|                                                                                    |  |                         |           
|Weighted average common
  shares outstanding:                                       |  |                         |           
|Basic                                                                               |  |                         | 12,472,070
|                                                                                    |  |                         |           
|Diluted                                                                             |  |                         | 12,472,070
|                                                                                    |  |                         |           

The accompanying notes are an integral part of these consolidated
financial statements.

27

---

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INFORTE CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

|                                                                                       |  | Common Stock |            | Additional
  Paid-In
  Capital |  | Treasury
  Stock |        | Retained
  Earnings |   | Other
  Comprehensive
  Income |   | Total
  Stockholders
  Equity |            
|-------------------------------------------------------------------------------------- |  | ------------ | ---------- | ------------------------------ |  | ---------------- | ------ | ------------------- | - | ------------------------------ | - | ------------------------------ | -----------
|                                                                                      
|Number
  of Shares                                                                     |  | Amount      
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Balance at January 1, 2001                                                             |  |              | 12,702,926 |                                |  | $                | 12,703 |                     | $ | 74,192,205                     |   | $                              |           
|Stock
  option and purchase
            plans                                          |  |              | 381,340    |                                |  |                  | 382    |                     |   | 1,319,317                      |   |                                |           
|Compensation
  recognized
            related to stock
  options                       |  |              |           |                                |  |                  |       |                     |   | 1,549,000                      |   |                                |           
|Tax
  benefit of disqualifying
            dispositions of
  stock
            options |  |              |           |                                |  |                  |       |                     |   | 855,862                        |   |                                |           
|Purchase
  of common stock
            for treasury                                    |  |              | (1,492,702 | )                              |  |                  | (1,493 | )                   |   |                               |   |                                | (14,502,306
|Comprehensive
  income:                                                                |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Foreign
  currency translation
            adjustments                                 |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Unrealized
  gain on
            available-for-sale
            securities             |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Net
  loss                                                                             |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Comprehensive
  loss                                                                   |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Balance at December 31, 2001                                                           |  |              | 11,591,564 |                                |  | $                | 11,592 |                     | $ | 77,916,384                     |   | $                              | (14,502,306
|Stock
  option and purchase
            plans                                          |  |              | 435,943    |                                |  |                  | 435    |                     |   | 952,616                        |   |                                |           
|Tax
  benefit of disqualifying
            dispositions of
  stock
            options |  |              |           |                                |  |                  |       |                     |   | 323,280                        |   |                                |           
|Purchase
  of common stock
            for treasury                                    |  |              | (1,228,121 | )                              |  |                  | (1,228 | )                   |   |                               |   |                                | (10,494,971
|Comprehensive
  income:                                                                |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Foreign
  currency translation
            adjustments                                 |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Unrealized
  loss on
            available-for-sale
            securities             |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Net
  income                                                                           |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Comprehensive
  income                                                                 |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Balance at December 31, 2002                                                           |  |              | 10,799,386 |                                |  | $                | 10,799 |                     | $ | 79,192,280                     |   | $                              | (24,997,277
|Stock
  option and purchase
            plans                                          |  |              | 158,046    |                                |  |                  | 158    |                     |   | 583,897                        |   |                                |           
|Compensation
  reversed
            related to stock
  options                         |  |              |           |                                |  |                  |       |                     |   | (75,000                        | ) |                                |           
|Tax
  benefit of disqualifying
            dispositions of
  stock
            options |  |              |           |                                |  |                  |       |                     |   | 90,230                         |   |                                |           
|Comprehensive
  income:                                                                |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Foreign
  currency translation
                 adjustments                            |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Unrealized
  loss on
                 available-for-sale
                 securities   |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|Net
  income                                                                           |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Comprehensive
  income                                                                 |  |              |           |                                |  |                  |       |                     |   |                               |   |                                |           
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            
|Balance at December 31, 2003                                                           |  |              | 10,957,432 |                                |  | $                | 10,957 |                     | $ | 79,791,407                     |   | $                              | (24,997,277
|                                                                                       |  |              |            |                                |  |                  |        |                     |   |                                |   |                                |            

The accompanying notes are an integral part of these consolidated
financial statements.

28

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---

INFORTE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                  |  | Year ended December 31, |            
|------------------------------------------------------------------------------------------------- |  | ----------------------- | -----------
|                                                                                                  |  |                         |            
|                                                                                                  |  | 2001                    |            
|                                                                                                  |  |                         |            
|Cash flows
  from operating activities                                                            |  |                         |            
|Net income (loss)                                                                                 |  | $                       | (191,671   
|Adjustments to reconcile
  net income (loss) to net cash
       provided by operating activities: |  |                         |            
|Depreciation
  and amortization                                                                   |  |                         | 1,682,601  
|Non-cash
  stock compensation                                                                     |  |                         | 1,549,000  
|Deferred
  income taxes                                                                           |  |                         | (841,887   
|Changes
  in operating assets and liabilities:                                                    |  |                         |            
|Accounts
  receivable                                                                             |  |                         | 3,847,228  
|Prepaid
  expenses and other current assets                                                       |  |                         | (103,046   
|Accounts
  payable                                                                                |  |                         | (182,658   
|Income
  taxes                                                                                    |  |                         | 2,568,839  
|Accrued
  expenses and other                                                                      |  |                         | (2,178,342 
|Deferred
  revenue                                                                                |  |                         | (409,370   
|                                                                                                  |  |                         |            
|Net cash provided by
  operating activities                                                       |  |                         | 5,740,694  
|                                                                                                  |  |                         |            
|Cash flows
  from investing activities                                                            |  |                         |            
|(Purchases of) Proceeds
  from marketable securities                                              |  |                         | (14,368,642
|Purchases of property and
  equipment                                                             |  |                         | (387,257   
|                                                                                                  |  |                         |            
|Net cash (used in) provided
  by investing activities                                             |  |                         | (14,755,899
|                                                                                                  |  |                         |            
|Cash flows
  from financing activities                                                            |  |                         |            
|Stock option and purchase
  plans                                                                 |  |                         | 1,319,699  
|Purchase of common stock                                                                          |  |                         | (14,503,799
|                                                                                                  |  |                         |            
|Net cash provided by (used
  in) financing activities                                             |  |                         | (13,184,100
|                                                                                                  |  |                         |            
|Effect of change in
  exchange rates on cash                                                      |  |                         | 15,218     
|                                                                                                  |  |                         |            
|Net increase (decrease) in
  cash and cash equivalents                                            |  |                         | (22,184,087
|Cash and cash equivalents,
  beginning of year                                                    |  |                         | 42,391,880 
|                                                                                                  |  |                         |            
|Cash and cash equivalents,
  end of year                                                          |  | $                       | 20,207,793 
|                                                                                                  |  |                         |            

The accompanying notes are an integral part of these consolidated
financial statements.

29

---

---

INFORTE CORP. 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.       Nature of
Business

Inforte
Corp. is a customer strategy and solutions consultancy that helps clients
improve performance by tying together customer and corporate strategy. Inforte
combines strong business and operational planning with innovative software
solutions to ensure its client base serves the right customers in the right
ways to generate the greatest return.

In
the fourth quarter of 2003 Inforte Corp. owned 100% of Inforte India Holding
Company, a Delaware corporation which in turn owned 100% of Inforte India Private Ltd., a
company legally domiciled in India. As of December 2003 efforts were under way
to establish and commence business operations in Delhi, India in the first half
of 2004.

2.       Significant
Accounting Policies

Cash and Cash Equivalents

All
highly liquid investments with original maturities of three months or less when
purchased are considered cash equivalents. Cash and cash equivalent balances
consist of obligations of U.S. and U.K. banks, money market and auction
instruments and other high quality, short-term obligations of U.S. companies or
local governmental bodies.

Accounts Receivable, net

Credit
is extended based on evaluation of a customers financial condition, and
generally, collateral is not required. Accounts receivable are due within 0 to
30 days and are stated at amounts due from customers. Accounts outstanding
longer than the contractual payments terms are considered past due.

The
Company determines its allowance by considering a number of factors, including
the length of time accounts receivable are past due, the Companys previous
loss history, the customers current ability to pay its obligation to the
Company, and the condition of the general economy and the industry as a whole.

Changes
in the Companys allowance for doubtful accounts are as follows for the years
ended December 31:

|                                 |  | 2001 |           | 2002 |   | 2003      | 
|-------------------------------- |  | ---- | --------- | ---- | - | --------- | 
|                                 |  |      |           |      |   |           | 
|Balance at beginning of
  period |  | $    | 1,150,000 |      | $ | 1,150,000 | 
|Bad debt expense                 |  |      |          |      |   |          | 
|Accounts written off             |  |      |          |      |   |          | 
|Adjustments                      |  |      |          |      |   | 550,000   | 
|Recoveries                       |  |      |          |      |   |          | 
|Balance at end of period         |  | $    | 1,150,000 |      | $ | 600,000   | 

Financial Instruments

Short-term
and long-term marketable securities are available-for-sale securities which are
recorded at fair market value. The difference between amortized cost and fair
market value, net of tax effect, is shown as a separate component of
stockholders equity. The cost of securities available-for-sale is adjusted for
amortization of premiums and discounts to maturity. Interest and amortization
of premiums and discounts for all securities are included in interest income.
Realized gains and losses from sales of available-for-sale securities were
$19,560 in 2001 and were not material in 2003 or 2002. Unrealized gains were
accounted for in other comprehensive income and totaled $237,523 as of December
31, 2002 and were immaterial in the year ended December 31, 2003.

Principles of Consolidation

The
consolidated financial statements include the accounts of Inforte and its
wholly-owned subsidiaries. All significant intercompany accounts have been
eliminated.

30

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.       Significant
Accounting Policies (Continued)

Computers, Purchased Software, and Property

Computers,
purchased software, and property are stated at cost. Inforte provides for
depreciation and amortization using the straight-line method over their
estimated useful lives as follows:

|Asset
  Classification  |  | Estimated Useful Life                                            | 
|----------------------- |  | ---------------------------------------------------------------- | 
|Office furniture        |  | 3-5
  years                                                      | 
|Computers and equipment |  | 2-3
  years                                                      | 
|Purchased software      |  | 2-3
  years                                                      | 
|Leasehold improvements  |  | Estimated
  useful life or life of
  lease, whichever is shorter | 

Significant
improvements are capitalized and depreciated. Upon retirement or sale, the cost
of the assets disposed of and the related accumulated depreciation are removed
from the accounts, and any resulting gain or loss is included in the results of
operations.

Revenue Recognition

We
recognize revenue when all of the following four criteria are met: persuasive
evidence exists that we have an agreement, service has been rendered, our price
is fixed or determinable and collectibility is reasonably assured. We recognize
net revenue from fixed-price contracts based on the ratio of hours incurred to
total estimated hours. The cumulative impact of any change in estimated hours
to complete is reflected in the period in which the changes become known. We
recognize time-and-materials net revenue as we perform the services.

In
November 2001, the Financial Accounting Standards Boards Emerging Issues Task
Force issued Topic 01-14, Income Statement Characterization of Reimbursements
Received for Out-of-Pocket Expenses Incurred stating these costs should be
characterized as revenue in the income statement if billed to customers. For
each quarter beginning with the March 31, 2002 quarter, we included
reimbursable expenses in revenue and expense and we have reclassified prior
periods in the comparative consolidated financial statements as required by the
Financial Accounting Standards Board. This reclassification had no effect on
current or previously reported net income (loss) per share. For presentation
purposes, we show two components of total revenue: 1) revenue before
reimbursements, which we call net revenue, consisting of revenue for performing
consulting services; and 2) reimbursements, consisting of reimbursements we
receive from clients for out-of-pocket expenses incurred.

Stock-Based Compensation

Inforte
accounts for stock-based employee compensation in accordance with Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees , and
have adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS
123) related to options and warrants issued to employees. For options issued
to employees during the years ended December 31, 2003, 2002 and 2001, no
stock-based employee compensation is reflected in net income in the
accompanying consolidated statements of operations, as all such options had an
exercise price equal to the market value of the underlying common stock on the
date of the grant. Had we applied the fair value recognition provisions of SFAS
123 to stock-based employee compensation during the years ended December 31,
2003, 2002 and 2001, net income and net income (loss) per share would have been
as follows:

31

---

---

INFORTE CORP. 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.       Significant
Accounting Policies (Continued)

|                                                                                                                                                     |  | Year ended December 31, |           
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                                                                                                     |  |                         |           
|                                                                                                                                                     |  | 2001                    |           
|                                                                                                                                                     |  |                         |           
|Net income (loss), as
  reported                                                                                                                     |  | $                       | (191,671  
|Add: Stock-based
  compensation expense recorded, net of
       related tax effects                                                                  |  |                         | 1,374,000 
|Deduct: Total stock-based
  compensation expense
       determined under fair value based method for
  all
       awards, net of related tax effects |  |                         | (5,437,671
|Pro forma net income (loss)                                                                                                                          |  | $                       | (4,255,342
|Net income (loss), per
  share:                                                                                                                      |  |                         |           
|Basic
   as reported                                                                                                                                |  | $                       | (0.02     
|Basic
   pro forma                                                                                                                                  |  | $                       | (0.34     
|Diluted
   as reported                                                                                                                              |  | $                       | (0.02     
|Diluted
   pro forma                                                                                                                                |  | $                       | (0.34     

Compensation
expense related to options in 2001 totaled $1,549,000, of which $1,374,000 was
for a performance-based stock option and the remaining $175,000 was for options
that were granted to a member of the Board of Directors for consulting
services. We have listed the performance-based stock option expense as a
separate line of the consolidated statements of operations due its magnitude
and non-recurring nature. Note that this expense would otherwise be included
entirely in the management and administrative expense line. The exercise price
on all of these options grants equaled fair market value at the time of grant.

Income taxes

Deferred
income taxes are provided on all differences between the tax bases of assets
and liabilities and their reported amounts in the consolidated financial
statements based upon enacted statutory tax rates in effect in the periods when
such differences are expected to reverse.

Net income (loss) per share

Basic
and diluted net income (loss) per share is computed by dividing the net income
(loss) available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the period. The calculation
of diluted net income (loss) per share excludes potential common shares if the
effect is antidilutive. Potential common shares are composed of common stock
issuable upon the exercise of stock options.

Comprehensive Income

Comprehensive
income includes net income as currently reported under accounting principles
generally accepted in the United States and also considers the effect of
additional economic events that are not required to be recorded in determining
net income but are rather reported as a separate component of stockholders
equity. Inforte reports foreign currency translation adjustments and unrealized
gains and losses on marketable securities as components of comprehensive
income.

Foreign Currency Translation

Assets
and liabilities of the Companys foreign operations are translated into United
States dollars at the exchange rate in effect at the balance sheet date while
income and expenses are translated at the weighted-average exchange rate for
the year. Translation adjustments are classified as a separate component of
stockholders equity. Gains and losses arising from intercompany foreign
currency transactions that are of a long-term-investment nature are reported in
the same manner as translation adjustments.

32

---

---

INFORTE CORP. 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.       Significant
Accounting Policies (Continued)

Net
gains and losses resulting from foreign exchange transactions are included in
the consolidated statements of operations and were not significant during the
periods presented.

Concentration of Credit Risk

Infortes
financial instruments consist of cash and cash equivalents, short-term and
long-term marketable securities, accounts receivable and accounts payable. At
December 31, 2002 and 2003, the fair value of these instruments approximated
their consolidated financial statement carrying amounts.

Inforte
performs periodic credit evaluations of its customers financial condition and
generally does not require collateral. Inforte maintains an allowance for
potential credit losses, and such losses have been within managements
expectations.

For
the year ended December 31, 2001, two customers accounted for 9% and 1%,
respectively, of revenue and 17% and 16%, respectively, of accounts receivable
at December 31, 2001. For the year ended December 31, 2002, two customers
accounted for 9% and 2%, respectively, of revenue and 19% and 10%,
respectively, of accounts receivable at December 31, 2002. For the year ended
December 31, 2003, three customers accounted for 8%, 16% and 13%, respectively,
of net revenue and 31%, 17% and 8%, respectively, of accounts receivable at
December 31, 2003.

Use of Accounting Estimates

The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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 consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Advertising Costs

Inforte
expenses the cost of advertising as incurred. Such costs are included in sales
and marketing in the consolidated statements of operations. In the years 2001,
2002 and 2003 advertising costs were immaterial.

Reclassifications

Certain
2001 balances have been reclassified to conform to 2002 and 2003 financial
statement presentation.

3.       Financial
Instruments

The
portfolio of short-term and long-term marketable securities (including cash and
cash equivalents) consisted of the following:

|                             |  | Year ended
  December 31, 2002 |            | Year ended
  December 31, 2003      | 
|---------------------------- |  | ------------------------------ | ---------- | ----------------------------------- | 
|                             |  |                                |            |                                     | 
|                             |  | Amortized
  Cost               |            | Gross
  Unrealized
  Gains (Losses) | 
|                             |  |                                |            |                                     | 
|Cash                         |  | $                              | 5,785,820  |                                     | 
|Municipal notes/bonds        |  |                                | 16,400,000 |                                     | 
|Corporate bonds              |  |                                | 17,921,103 |                                     | 
|Corporate auction preferreds |  |                                | 17,000,000 |                                     | 
|U.S. government agencies     |  |                                | 10,000,943 |                                     | 
|                             |  |                                |            |                                     | 
|                             |  | $                              | 67,107,866 |                                     | 
|                             |  |                                |            |                                     | 

33

---

---

INFORTE CORP. 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.       Financial
Instruments (Continued)

Inforte
considers all marketable securities with maturities of one year or less as of
December 31, 2002 or December 31, 2003 to be short term. Long-term marketable
securities consist of marketable securities with remaining maturities of
greater than twelve months.

Contractual
maturities of investments in debt securities December 31, 2002 and 2003:

|                                |  | Year ended December 31, 2002 |   | Year ended December 31, 2003 | 
|------------------------------- |  | ---------------------------- | - | ---------------------------- | 
|                                |  |                              |   |                              | 
|                                |  | Amortized Cost               |   | Fair Market
  Value          | 
|                                |  |                              |   |                              | 
|Less than one year              |  |                              | $ | 28,327,991                   | 
|Due in 1-2 years                |  |                              |   | 5,993,112                    | 
|                                |  |                              |   |                              | 
|Investment in debt
  securities |  |                              | $ | 34,321,103                   | 
|                                |  |                              |   |                              | 

4.       Accrued expenses
and accrued loss on disposal of leased property

Accrued
expenses as of December 31, 2002 and 2003:

|                                            |  | Year ended December 31, 2002 |   | Year ended December 31, 2003 | 
|------------------------------------------- |  | ---------------------------- | - | ---------------------------- | 
|                                            |  |                              |   |                              | 
|Compensation and employee
  benefits        |  |                              | $ | 2,788,925                    | 
|Professional and ancillary
  services       |  |                              |   | 1,376,586                    | 
|Payroll, sales and other
  non-income taxes |  |                              |   | 519,273                      | 
|Rent                                        |  |                              |   | 509,899                      | 
|                                            |  |                              |   |                              | 
|Total accrued expenses                      |  |                              | $ | 5,194,683                    | 
|                                            |  |                              |   |                              | 

During
2001 Inforte took major steps to reduce its costs to better align its overall
cost structure and organization with anticipated demand for its services. These
steps included consolidating office space at the Chicago location where Inforte
had multiple contractual rental commitments. Estimated costs for the
consolidation of Chicago facilities consist of contractual rental commitments
for office space being vacated and unamortized leasehold improvements related
to this space less estimated sub-lease income. The total reduction of office
space resulting from this consolidation of our Chicago office space was
approximately 17,770 square feet, all of which were vacated as of December 31,
2001. Total charges related to this reduction of office space in 2001 and 2002
were $1,107,841 and $605,062, respectively and there was a reversal of
previously recognized losses of $145,978 in 2003. These charges as well as the
loss reversal were recorded as a component of Management and Administrative
expenses in the 2001, 2002 and 2003 Consolidated Statement of Operations. At
December 31, 2002 and 2003 the Company recorded $1,126,229 and $558,439 as
Accrued Expenses on the Consolidated Balance Sheet. If we vacate additional
space, if future sub-lease income is less than estimated, or if we are unable
to sub-lease our vacated space, additional charges in future periods will be
necessary.

Charges
for restructuring as of, and for the twelve months ended December 31, 2003 and
2002 were as follows:

|Year ended December 31, 2002   |  | Balance 12/31/01 |   | Expense   |  | Cash payments |   | Adjustments |   | Balance 12/31/02 | 
|------------------------------ |  | ---------------- | - | --------- |  | ------------- | - | ----------- | - | ---------------- | 
|                               |  |                  |   |           |  |               |   |             |   |                  | 
|Lease termination              |  |                  | $ | 1,107,841 |  |               | $ | (83,019     | ) |                  | 
|                               |  |                  |   |           |  |               |   |             |   |                  | 
|Year ended
  December 31, 2003 |  | Balance 12/31/02 |   | Expense   |  | Cash payments |   | Adjustments |   | Balance 12/31/03 | 
|                               |  |                  |   |           |  |               |   |             |   |                  | 
|Lease termination              |  |                  | $ | 1,126,229 |  |               | $ | (55,021     | ) |                  | 

5.       Computers,
Purchased Software, and Property

Computers,
purchased software and property at December 31 consist of the following:

|                                                  |  | 2002 |           | 2003 |  
|------------------------------------------------- |  | ---- | --------- | ---- | -
|                                                  |  |      |           |      |  
|Office furniture                                  |  | $    | 294,737   |      | $
|Computers and equipment                           |  |      | 1,057,104 |      |  
|Leasehold improvements                            |  |      | 803,520   |      |  
|Purchased software                                |  |      | 701,470   |      |  
|                                                  |  |      |           |      |  
|                                                  |  |      | 2,856,831 |      |  
|Less: Accumulated
  depreciation and amortization |  |      | 1,779,004 |      |  
|                                                  |  |      |           |      |  
|                                                  |  | $    | 1,077,827 |      | $
|                                                  |  |      |           |      |  

34

---

---

6.       Income Taxes

For
the twelve months ending December 31, 2003 federal taxes paid were $608,000 and
refunds from net operating losses pertaining to previous years were $934,240.
There were no federal taxes paid in 2001 and 2002. State income taxes paid were
$103,568 and $61,372 in 2003 and 2001, respectively and there were no state
taxes paid in 2002. In addition, refunds of state income taxes totaled $433,418
in 2003. These refunds were due to a net operating loss in 2001 carried back
and taken as a deduction in 2000.

Income
tax expense (credit) for the years ended December 31, 2001, 2002 and 2003
consists of the following:

|                                    |  | 2001 |           | 2002 |   | 2003    |  
|----------------------------------- |  | ---- | --------- | ---- | - | ------- | -
|                                    |  |      |           |      |   |         |  
|Current:                            |  |      |           |      |   |         |  
|Federal                             |  | $    | 1,134,400 |      | $ | 169,062 |  
|State                               |  |      | 65,431    |      |   | 21,979  |  
|Foreign                             |  |      | 100,000   |      |   | (50,000 | )
|                                    |  |      |           |      |   |         |  
|Total
  current provision           |  |      | 1,299,831 |      |   | 141,041 |  
|Deferred:                           |  |      |           |      |   |         |  
|Federal                             |  |      | (773,465  | )    |   | 470,138 |  
|State                               |  |      | (23,232   | )    |   | 61,118  |  
|                                    |  |      |           |      |   |         |  
|Total
  deferred provision (credit) |  |      | (796,697  | )    |   | 531,256 |  
|                                    |  |      |           |      |   |         |  
|Total
  provision for income taxes  |  | $    | 503,134   |      | $ | 672,297 |  
|                                    |  |      |           |      |   |         |  

The
reconciliation of income taxes computed using the federal statutory rate of 35%
for the years ended December 31, 2001, 2002 and 2003 is as follows:

|                                                |  | 2001           |      | 2002 |   | 2003 |  
|----------------------------------------------- |  | -------------- | ---- | ---- | - | ---- | -
|                                                |  |                |      |      |   |      |  
|                                                |  | (in thousands) |     
|Federal statutory income
  tax                  |  | $              | 110  |      | $ | 834  |  
|State income tax, net of
  federal tax benefit  |  |                | 122  |      |   | 109  |  
|Nondeductible expenses                          |  |                | 165  |      |   | 59   |  
|Tax exempt and tax
  advantaged interest income |  |                | (578 | )    |   | (280 | )
|Non-deductible stock
  compensation expense     |  |                | 551  |      |   |     |  
|Effect of international
  taxes                 |  |                | 100  |      |   | (50  | )
|Other                                           |  |                | 33   |      |   |     |  
|                                                |  |                |      |      |   |      |  
|                                                |  | $              | 503  |      | $ | 672  |  
|                                                |  |                |      |      |   |      |  

The
tax effects of temporary differences that give rise to deferred tax assets and
liabilities at December 31, 2002 and 2003 are as follows:

|                                                       |  | December 31, |          
|------------------------------------------------------ |  | ------------ | ---------
|                                                       |  |              |          
|                                                       |  | 2002         |          
|                                                       |  |              |          
|Deferred income tax assets:                            |  |              |          
|Allowance
  for doubtful accounts                      |  | $            | 237,300  
|Accrued
  loss on lease                                |  |              | 445,424  
|Book
  over tax depreciation                           |  |              | 126,447  
|Accrued
  bonuses, vacation and health insurance costs |  |              | 294,237  
|Other                                                  |  |              | 247,044  
|Deferred
  rent                                        |  |              | 201,666  
|                                                       |  |              |          
|Total
  deferred tax assets                            |  | $            | 1,552,118
|                                                       |  |              |          

35

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.       Net
Income (Loss) per Share

The
following table sets forth the computation of basic and diluted net income
(loss) per share.

|                                                                      |  | Year ended December 31, |           
|--------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                      |  |                         |           
|                                                                      |  | 2001                    |           
|                                                                      |  |                         |           
|                                                                      |  |                         |           
|Numerator                                                             |  |                         |           
|Numerator
  for basic and diluted net income (loss) per common share: |  |                         |           
|Net
  income (loss)                                                   |  | $                       | (191,671  
|                                                                      |  |                         |           
|                                                                      |  |                         |           
|Denominator                                                           |  |                         |           
|Denominator
  for basic earnings per common share:                    |  |                         |           
|Weighted-average
  shares                                             |  |                         | 12,472,070
|                                                                      |  |                         |           
|Effect of
  dilutive securities:                                      |  |                         |           
|Employee
  stock options                                              |  |                         |          
|                                                                      |  |                         |           
|Denominator
  for diluted earnings per common share:                  |  |                         |           
|Adjusted
  weighted-average shares                                    |  |                         | 12,472,070
|                                                                      |  |                         |           
|Weighted-average
  anti-dilutive stock options                        |  |                         | 1,304,652 
|                                                                      |  |                         |           

The
following table sets forth common stock equivalents that are not included in
the diluted net income per share calculation above because to do so would be
antidilutive for the periods indicated:

|                                                       |  | Year ended December 31, |        
|------------------------------------------------------ |  | ----------------------- | -------
|                                                       |  |                         |        
|                                                       |  | 2001                    |        
|                                                       |  |                         |        
|Weighted
  average effect of common stock equivalents: |  |                         |        
|Employee
  stock options                               |  |                         | 802,244
|                                                       |  |                         |        

8.       Related
Party Transactions

Transactions
with related parties are entered into only upon approval by a majority of the
independent directors of Inforte and only with terms comparable to those that
would be available from unaffiliated parties.

Inforte has
entered into an agreement, dated January 28, 2004, with Marketing Scientists,
LLC, a Georgia limited liability company (Marketing Scientists), and David
Sutton, Infortes president and chief operating officer, among others, pursuant
to which Marketing Scientists conveyed its interest in, or, where such
conveyance may not be permitted, agreed to subcontract its right to perform
under, certain contracts and prospective contracts to Inforte and Mr. Sutton
granted to Inforte a fully paid, non-exclusive, non-transferable license to use
the book titled, Enterprise Marketing Management. Mr. Sutton is a member and
50% owner of Marketing Scientists. In consideration for the conveyance of
certain contracts and prospective contracts, Inforte agreed to pay Marketing
Scientists the lesser of 30% of, or the actual gross margin realized by Inforte
on, revenues recognized by Inforte in 2004 from Infortes performance of work
with respect to such contracts or prospective contracts. Payments will be made
in cash quarterly with respect to revenues recognized during the preceding
quarter. As of the date of these financial statements, Inforte has not yet made
any payment to Marketing Scientists under this agreement. Marketing Scientists
is the entity through which Mr. Sutton conducted consulting services prior to
his employment as president and chief operating officer of Inforte in December
2003. In connection with its conveyance of certain contracts and prospective
contracts, Marketing Scientists has entered into a covenant not to compete in
favor of Inforte with respect to strategy and technology consulting services.
However, Marketing Scientists will finish one remaining engagement, with
assistance from Inforte. Inforte has agreed to pay Mr. Sutton and the other
owner of Marketing Scientists, who also is now employed by Inforte, 2.5% each of
the revenues recognized by Inforte on this work.

During
2003, in consideration for strategy consulting services, Inforte agreed to pay
Michael E. Porter an annual fee of $50,000 over the three years ending December
31, 2005 and issued to him 20,000 shares of Inforte restricted stock, subject
to a forfeiture clause. Under the terms of the agreement, forfeiture will lapse
upon completion by Dr. Porter of certain objectives still to be performed.

In
addition, in 2003, Inforte paid Mr. Porter a $80,000 fee, and reimbursed him
for lodging expenses of $763, in connection with his conducting a senior
executive-level strategy conference for Inforte directed towards U.K-based
Inforte clients and prospects.

During
2003, in consideration for marketing consulting services, Inforte paid Philip
Kotler a fee of $5,000.

Inforte
believes that all transactions between Inforte and its officers, directors,
principal stockholders and other affiliates have been and will be on terms no
less favorable to us than could be obtained from unaffiliated third parties.

36

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.       Stockholders
Equity

Stock Option and
Incentive Plans

The 1995
Incentive Stock Option Plan (the 1995 Plan) provides for the issuance of
incentive stock options and nonqualified stock options to officers and other
key employees of Inforte. Inforte has reserved an aggregate of 4,900,000 shares
for issuance under the 1995 Plan, of which 365,000 were available for grant as
of December 31, 2003. As of December 31, 2003, Inforte does not intend to issue
any additional options under the 1995 Plan.

On December
31, 1997, the stockholders approved the 1997 Incentive Compensation Plan (the
1997 Plan), which permits the grant of stock options and other stock awards
to employees and directors of Inforte.

On December
1, 1999, the stockholders approved the Amended and Restated Inforte Corp. 1997
Incentive Compensation Plan. Inforte has reserved an aggregate of 4,000,000
shares of common stock for issuance through the amended 1997 Plan, plus annual
increases beginning in 2001 equal to the lesser of: (1) 1,000,000 shares, (2)
5% of the total shares of common stock outstanding or (3) a number determined
by the Board of Directors. The evergreen provisions of Infortes Amended and
Restated 1997 Incentive Compensation Plan and the Amended and Restated 1999
Employee Stock Purchase Program (collectively, the Equity Programs) allowed for
an automatic increase in the number of shares available for grant in the Equity
Programs by a formulaic amount at the beginning of each year. In 2003 the Board
of Directors abolished the evergreen provisions on the grounds that these
provisions had been an administrative convenience in hyper-growth times, but
were no longer necessary, nor desirable from a governance and dilution
perspective. Of the shares of common stock available under this 1997 Plan,
1,438,213 were available for grant as of December 31, 2003. The 1997 Plan
authorizes the grant of both incentive and nonqualified stock options, and
further authorizes the grant of stock appreciation rights independently of or
with respect to options granted or outstanding. Stock options generally have 10-year
terms and vest in accordance with provisions determined by the Board of
Directors. A restricted stock program, performance program and bonus shares
program have also been established under the 1997 Plan. Awards under the
restricted stock program and performance program are earned over a period of
time upon the achievement of certain criteria. Restricted share grants may not
be sold or otherwise disposed of until the restrictions lapse. Performance
shares are payable in cash, common stock, or a combination thereof when earned.
Bonus shares allow participants to elect to receive shares of common stock in
lieu of a portion or all of cash bonuses paid by Inforte. In 2003, 20,000
restricted shares were granted to a non-employee director for consulting services
yet to be performed. No compensation expense related to the restricted shares
grant was recognized in 2003 and no restricted stock grants were made in 2001
or 2002. Stock appreciation rights have not been granted as of December 31,
2003.

A combined
summary of stock option information from the 1995 Plan and the 1997 Plan
follows:

|                                                                                                            |  | Number
  of Shares |           | Weighted Average
  Exercise Price | 
|----------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | --------------------------------- | 
|                                                                                                            |  |                    |           |                                   | 
|Outstanding
  on December 31, 2000                                                                          |  |                    | 2,591,437 |                                   | 
|Granted                                                                                                     |  |                    | 1,003,418 |                                   | 
|Exercised                                                                                                   |  |                    | (267,339  | )                                 | 
|Canceled                                                                                                    |  |                    | (453,943  | )                                 | 
|                                                                                                            |  |                    |           |                                   | 
|Outstanding
  on December 31, 2001                                                                          |  |                    | 2,873,573 |                                   | 
|Granted                                                                                                     |  |                    | 1,036,326 |                                   | 
|Exercised                                                                                                   |  |                    | (391,938  | )                                 | 
|Canceled                                                                                                    |  |                    | (728,697  | )                                 | 
|                                                                                                            |  |                    |           |                                   | 
|Outstanding
  on December 31, 2002                                                                          |  |                    | 2,789,264 |                                   | 
|Granted                                                                                                     |  |                    | 874,500   |                                   | 
|Exercised                                                                                                   |  |                    | (111,462  | )                                 | 
|Canceled                                                                                                    |  |                    | (719,051  | )                                 | 
|                                                                                                            |  |                    |           |                                   | 
|Outstanding
  on December 31, 2003                                                                          |  |                    | 2,833,251 |                                   | 
|                                                                                                            |  |                    |           |                                   | 
|Exercisable
  at December 31, 2003                                                                          |  |                    | 1,063,372 |                                   | 
|                                                                                                            |  |                    |           |                                   | 
|Weighted
  average fair value of options granted during
            twelve months
  ended December 31, 2003 |  |                    |           |                                   | 

37

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.       Stockholders
Equity (Continued)

|                                                           |  | Year ended December 31, |          
|---------------------------------------------------------- |  | ----------------------- | ---------
|                                                           |  |                         |          
|                                                           |  | 2001                    |          
|                                                           |  |                         |          
|Shares
  available for grant under 1995 Plan and 1997 Plan |  |                         | 1,601,042
|                                                           |  |                         |          

|Range of Exercise Prices |  | Number of
  Options |           | Weighted
  Average
  Remaining
  Life
  (in years) |  | Weighted
  Average
  Exercise
  Price |     | Exercisable
  Options at
  12/31/03 |  | Weighted
  Average
  Exercise
  Price |  
|------------------------ |  | ------------------- | --------- | -------------------------------------------------- |  | ------------------------------------- | --- | ----------------------------------- |  | ------------------------------------- | -
|                         |  |                     |           |                                                    |  |                                       |     |                                     |  |                                       |  
|$0.05-$3.50              |  |                     | 83,126    |                                                    |  |                                       | 4.8 |                                     |  |                                       | $
|$3.51-$7.75              |  |                     | 319,990   |                                                    |  |                                       | 5.8 |                                     |  |                                       |  
|$7.76-$11.00             |  |                     | 1,439,433 |                                                    |  |                                       | 9.2 |                                     |  |                                       |  
|$11.01-$13.97            |  |                     | 665,212   |                                                    |  |                                       | 7.5 |                                     |  |                                       |  
|$13.98-$32.00            |  |                     | 211,002   |                                                    |  |                                       | 6.3 |                                     |  |                                       |  
|$32.01-$71.81            |  |                     | 114,488   |                                                    |  |                                       | 6.1 |                                     |  |                                       |  
|                         |  |                     |           |                                                    |  |                                       |     |                                     |  |                                       |  
|Total                    |  |                     | 2,833,251 |                                                    |  |                                       | 7.9 |                                     |  |                                       | $

In
December 1999, the Company adopted the Employee Stock Purchase Plan (the
Purchase Plan) reserving 200,000 shares for issuance, plus annual increases
beginning in 2001 equal to the lesser of (1) 400,000 shares, (2) 2% of the
total shares of common stock outstanding or (3) a number determined by the
Board of Directors. The Purchase Plan became effective upon the completion of
the Companys initial public offering, in February 2000. The Purchase Plan
permits eligible employees to purchase common stock, through payroll deductions
at a price equal to 85% of the fair market value of the common stock at either
the beginning or the end of each offering period, whichever is lower. For the
years ended December 31, 2001, 2002 and 2003, 144,000, 44,005 and 27,109
shares, respectively, were purchased under the Purchase Plan with weighted
average prices of $7.31, $6.70 and $4.83 per share, respectively. In December
of 2002 the Purchase Plan was modified to establish the purchase price at 92%
of fair market value at the date of purchase for any new enrollees of the
Purchase Plan on or after December 31, 2002. The evergreen provisions of
Infortes Amended and Restated 1997 Incentive Compensation Plan and the Amended
and Restated 1999 Employee Stock Purchase Program (collectively, the Equity
Programs) allowed for an automatic increase in the number of shares available for
grant in the Equity Programs by a formulaic amount at the beginning of each
year. In 2003 the Board of Directors abolished the evergreen provisions on
the grounds that these provisions had been an administrative convenience in
hyper growth times, but were no longer necessary, nor desirable from a
governance and dilution perspective.

To date,
Inforte has not granted options with exercise prices other than the market
value on the grant date.

The fair
value of stock options used to compute pro forma net income and pro forma net
income per share is the estimated present value at grant date using the Black
Scholes option pricing model for option grants issued on or after February 17,
2000 and the minimum value method on option grants issued prior to February 17,
2000. The option pricing models assumptions were:

|                                                   |  | 2001 |             | 2002 |  | 2003        | 
|-------------------------------------------------- |  | ---- | ----------- | ---- |  | ----------- | 
|                                                   |  |      |             |      |  |             | 
|Dividend
  yield                                   |  |      | 0%          |      |  | 0%          | 
|Volatility                                         |  |      | 80%         |      |  | 65%         | 
|Risk-free
  interest rate                          |  |      | 3.75%-4.89% |      |  | 2.49%-4.66% | 
|Weighted-average
  expected option life (in years) |  |      | 4.0         |      |  | 4.0         | 

Pro
forma net income and net income (loss) per share assuming we had applied the
fair value recognition provisions of SFAS 123 to stock-based employee
compensation during the years ended December 31, 2003, 2002 and 2001, are
disclosed in Note 2.

38

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10.     Lease
Commitments

Inforte
leases certain office facilities under noncancelable operating leases that expire
at various dates through 2006.

At December
31, 2003, Inforte was obligated for future minimum lease payments under
operating leases that have initial or remaining non-cancelable terms in excess
of one year, as follows:

|2004                           |  | $ | 2,462,532 | 
|------------------------------ |  | - | --------- | 
|2005                           |  |   | 2,475,099 | 
|2006                           |  |   | 568,795   | 
|                               |  |   |           | 
|Total
  minimum lease payments |  | $ | 5,506,426 | 
|                               |  |   |           | 

Rent
expense for operating leases was $3,362,463, $2,679,019 and $1,828,388 for the
years ended December 31, 2001, 2002 and 2003, respectively.

11.     Benefit Plan

Inforte
sponsors a 401(k) savings plan covering all employees. Inforte has not made any
matching or discretionary contributions to the plan. We do not consider
administrative costs during 2001, 2002 and 2003 related to this plan to be
material. In October 2003, the Board of Directors approved the Amended and
Restated Inforte Corp. 401(k) Plan and the appointment of a new
non-discretionary trustee of the plan effective January 1, 2004.

12.     Common Stock
in Treasury

Infortes
Board of Directors approved a $25.0 million stock repurchase program on January
24, 2001 and as of December 31, 2002 the entire amount authorized had been
repurchased. The Board approved an additional $5.0 million stock repurchase
program on August 22, 2002, although we stated at that time that we had no
present plans to make additional repurchases of stock. The entire $5.0 million
remains authorized for repurchase as of December 31, 2003 as no repurchases
were made during the year then ended. During 2002, Inforte repurchased
1,228,121 shares of its common stock for $10.5 million at an average price of
$8.55. In total, during 2001 and 2002, Inforte repurchased 2,720,823 shares of
its common stock for $25.0 million at an average price of $9.19.

39

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.     Quarterly
Financial Results (unaudited)

The
following tables set forth certain unaudited quarterly results of operations of
Inforte for 2002 and 2003. The quarterly operating results are not necessarily
indicative of future results of operations.

|                                                          |  | Three Months Ended (unaudited) |           
|--------------------------------------------------------- |  | ------------------------------ | ----------
|                                                          |  |                                |           
|                                                          |  | Mar. 31,
  2002                |           
|                                                          |  |                                |           
|Revenues:                                                 |  |                                |           
|Revenue
  before reimbursements (net
            revenue) |  | $                              | 9,434,014 
|Reimbursements                                            |  |                                | 1,467,118 
|                                                          |  |                                |           
|Total
  revenues                                          |  |                                | 10,901,132
|Operating expenses:                                       |  |                                |           
|Project
  personnel and related expenses                  |  |                                | 5,001,725 
|Reimbursed
  expenses                                     |  |                                | 1,467,118 
|Sales
  and marketing                                     |  |                                | 1,517,606 
|Recruiting,
  retention and training                      |  |                                | 374,448   
|Management
  and administrative                           |  |                                | 3,004,236 
|Total
  operating expenses                                |  |                                | 11,365,133
|                                                          |  |                                |           
|Operating
  income (loss)                                 |  |                                | (464,001  
|Interest
  income, net, and other                         |  |                                | 564,329   
|                                                          |  |                                |           
|Income
  before income taxes                              |  |                                | 100,328   
|Income tax
  expense (benefit)                            |  |                                | (35,250   
|                                                          |  |                                |           
|Net income                                                |  | $                              | 135,578   
|                                                          |  |                                |           
|Net income
  per share:                                   |  |                                |           
|Diluted                                                   |  | $                              | 0.01      
|                                                          |  |                                |           
|Weighted-average
  common shares outstanding:             |  |                                |           
|Diluted                                                   |  |                                | 12,213,343
|                                                          |  |                                |           

40

---

---

INFORTE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.     Quarterly
Financial Results (unaudited) (Continued)

|                                                          |  | Three Months Ended (unaudited) |           
|--------------------------------------------------------- |  | ------------------------------ | ----------
|                                                          |  |                                |           
|                                                          |  | Mar. 31,
  2003                |           
|                                                          |  |                                |           
|Revenues:                                                 |  |                                |           
|Revenue
  before reimbursements (net
            revenue) |  | $                              | 8,292,732 
|Reimbursements                                            |  |                                | 1,337,559 
|                                                          |  |                                |           
|Total
  revenues                                          |  |                                | 9,630,291 
|Operating
  expenses:                                     |  |                                |           
|Project
  personnel and related expenses                  |  |                                | 4,346,312 
|Reimbursed
  expenses                                     |  |                                | 1,337,559 
|Sales
  and marketing                                     |  |                                | 1,404,708 
|Recruiting,
  retention and training                      |  |                                | 142,433   
|Management
  and administrative                           |  |                                | 2,331,583 
|                                                          |  |                                |           
|Total
  operating expenses                                |  |                                | 9,562,595 
|                                                          |  |                                |           
|Operating
  income                                        |  |                                | 67,696    
|Interest
  income, net, and other                         |  |                                | 420,542   
|                                                          |  |                                |           
|Income
  before income taxes                              |  |                                | 488,238   
|Income tax
  expense                                      |  |                                | 44,125    
|                                                          |  |                                |           
|Net income                                                |  | $                              | 444,113   
|                                                          |  |                                |           
|Net income
  per share                                    |  |                                |           
|Diluted                                                   |  | $                              | 0.04      
|                                                          |  |                                |           
|Weighted-average
  common shares outstanding:             |  |                                |           
|Diluted                                                   |  |                                | 10,952,705
|                                                          |  |                                |           

14.     Segment
Reporting

Inforte
engages in business activities in one operating segment, which provides consulting
services on both a fixed-price, fixed-time frame and a time-and-materials
basis. Infortes services are delivered to clients in North America and Europe,
and Infortes long-lived assets are located in North America and Europe.
Domestic and foreign operating revenues are based on the location of customers.
Long-lived assets consist of property, plant and equipment, software, furniture
and fixtures and leasehold improvements (net of accumulated depreciation).
Infortes European operations had $5,022,922, $8,481,492 and $6,685,322 of
revenues in 2001, 2002 and 2003, respectively. Asset information by operating
segment is not reported to or reviewed by the chief operating decision maker,
therefore, Inforte has not disclosed asset information for each operating
segment.

15.     Subsequent
Events

On March
12, 2004 Inforte acquired COMPENDIT, Inc., a leading provider of SAP Business
Intelligence implementation consulting services. Under the terms of the merger
agreement, Inforte paid $5.5 million in cash on closing with an additional
aggregate cash payment of $500,000 in cash within 45 days after closing based
on a closing statement calculation of cash less transaction costs.
Supplementary cash amounts of up to $6.3 million may be paid over 2005 and 2006
based on 2004 performance.

|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE
|------- | --------------------------------------------------------------------------------------

On September
8, 2003, the Audit Committee of Infortes Board of Directors of Inforte Corp.
(the Company) approved (1) the dismissal of Ernst & Young LLP (E&Y)
as Infortes independent accountants, effective November 15, 2003, and (2) the
replacement of E&Y with Grant Thornton LLP (Grant Thornton) as Infortes
independent accountants, commencing upon the dismissal of E&Y. There were
no disagreements with E&Y on accounting and financial disclosure.

41

---

---

|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Based
on their evaluation as of the end of the period covered by this Annual Report
on Form 10-K, the chief executive officer and the chief financial officer of
Inforte have concluded that Infortes disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act) are effective to ensure that
information required to be disclosed by Inforte in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SECs rules and forms.

There has
been no significant change in Infortes internal control over financial
reporting that occurred during the fourth fiscal quarter that has materially
affected, or is reasonably likely to materially affect, Infortes internal
control over financial reporting.

PART III

|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------

Information
concerning Infortes directors is incorporated herein by reference to Infortes
definitive proxy statement with respect to its 2004 annual meeting of
stockholders to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K. Information
concerning Infortes executive officers is included in Part I of this report
under the caption Executive Officers of the Registrant.

In October
2003, the Board of Directors approved and adopted the Code of Ethics applicable
to all Inforte employees including the CEO, CFO and the Controller of the
company. The full text of the Code of Ethics, as adopted, may be viewed at
Infortes website at http://www.inforte.com/investor. All amendments,
waivers from and provisions to the Code of Ethics will be posted on the
Internet at the aforementioned website address.

The
Nominating Committee has adopted a policy pursuant to which a stockholder who
has owned at least 1% of Infortes outstanding shares of common stock for at
least one year may recommend a director candidate that the Nominating Committee
will consider when there is a vacancy on the board either as a result of a
director resignation or an increase in the size of the board. Such
recommendation must be made in writing addressed to the Chairperson of the
Nominating Committee at Infortes principal executive offices and must be
received by the Chairperson at least 120 days prior to the anniversary date of
the release of the prior years proxy statement. For the 2005 annual meeting,
such notice must be received by no later than November 24, 2004. Although the
Nominating Committee has not formulated any specific minimum qualifications
that it believes must be met by a nominee that the Committee recommends to the
Board, the factors it will take into account may include, but not be limited
to, strength of character, mature judgment, career specialization, relevant
technical skills or financial acumen, diversity of viewpoint and industry
knowledge, as outlined in the Nominating Committee charter. The Nominating
Committee identifies board member candidates by searching Infortes existing
executive and board member business networks, considering Inforte management
recommendations and by surveying the general business community for individuals
who have skills and experience that may benefit Inforte. Candidates meeting the
minimum qualifications interview in person with management and select board
members prior to final evaluation by the Nominating Committee. The Nominating
Committee does not believe that there will be any differences between the
manner in which it evaluates a nominee recommended by a stockholder and the
manner in which it evaluates nominees recommended by other persons.

|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Information
concerning executive compensation is incorporated herein by reference to
Infortes definitive proxy statement with respect to its 2004 annual meeting of
stockholders to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K.

|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

Information
concerning ownership of Infortes stock is incorporated herein by reference to
Infortes definitive proxy statement with respect to its 2004 annual meeting of
stockholders to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K.

42

---

---

The following table sets forth Infortes securities authorized for
issuance under equity compensation plans as of December 31, 2003.

|Plan category                                                                |  | Number of securities to be
  issued upon exercise of
  outstanding options |           | Weighted average
  exercise price of
  outstanding options |  | Number of securities
  available for future
  issuance under equity
  compensation plans(1) |  
|---------------------------------------------------------------------------- |  | -------------------------------------------------------------------------- | --------- | ---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | -
|Equity
  compensation plans approved by
         security
  shareholders     |  |                                                                            | 2,833,251 |                                                            |  |                                                                                             | $
|Equity
  compensation plans not approved
         by security
  shareholders |  |                                                                            |           |                                                            |  |                                                                                             |  
|Total                                                                        |  |                                                                            | 2,833,251 |                                                            |  |                                                                                             | $

|(1) | Includes
  1,438,213 in shares available under Infortes 1997 Incentive Stock Option
  Plan, 365,000 shares available under the 1995 Incentive Stock Option Plan and
  320,370 shares available under Infortes 1999 Employee Stock Purchase Plan.
  For the 1997 Incentive Stock Option Plan Inforte has reserved an aggregate of
  4,000,000 shares of common stock for issuance. For the 1995 Incentive Stock
  Option Plan Inforte has reserved an aggregate of 4,900,000 shares for
  issuance. For the 1999 Employee Stock Purchase Plan, Inforte has reserved
  200,000 shares for issuance. The 1999 Employee Stock Purchase Plan became
  effective upon the completion of the Infortes initial public offering, in
  February 2000. The evergreen provisions of the 1997 Incentive Compensation
  Plan and the 1999 Employee Stock Purchase Program (collectively, the Equity
  Programs) allowed for an automatic increase in the number of shares
  available for grant in the Equity Programs by a formulaic amount at the
  beginning of each year. In 2003, however, the board of directors eliminated
  the evergreen provisions on the grounds that these provisions had been an
  administrative convenience in hyper-growth times, but were no longer
  necessary, nor desirable from a governance and dilution perspective. See Note
  9 to the Consolidated Financial Statements for additional information about
  the types of awards that may be granted under these plans.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

Information
concerning certain relationships and related transactions involving Infortes
directors and executive officers is incorporated herein by reference to
Infortes definitive proxy statement with respect to its 2004 annual meeting of
stockholders to be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-K.

43

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|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

The
following table describes fees for professional audit services rendered by
Ernst & Young LLP (E&Y), Infortes former principal accountant, for
the audit of our annual financial statements for the year ended December 31,
2002 as well as for fees billed for other services rendered by E&Y in 2002
and the first nine months of 2003. Effective November 15, 2003, Grant Thornton
LLP (Grant Thornton) replaced E&Y as Infortes independent accountants.
Fees billed by Grant Thornton for the audit of our financial statements for the
year ended 2003 and for other services rendered during the last quarter of 2003
are also included in the table below.

|Ernst & Young LLP
  Type of Fees |  | 2002 |         | 2003 |  
|-------------------------------- |  | ---- | ------- | ---- | -
|                                 |  |      |         |      |  
|Audit (1)                        |  | $    | 128,700 |      | $
|Audit
  Related Fees (2)         |  |      | 42,908  |      |  
|Tax Fees (3)                     |  |      | 70,935  |      |  
|                                 |  |      |         |      |  
|Total
  Fees                     |  | $    | 242,543 |      | $
|                                 |  |      |         |      |  

|Grant Thornton LLP
  Type of Fees |  | 2002 |   | 2003 |  
|--------------------------------- |  | ---- | - | ---- | -
|                                  |  |      |   |      |  
|Audit (1)                         |  | $    |  |      | $
|Audit
  Related Fees (2)          |  |      |  |      |  
|Tax Fees (3)                      |  |      |  |      |  
|                                  |  |      |   |      |  
|Total
  Fees                      |  | $    |  |      | $
|                                  |  |      |   |      |  

|(1) | Audit Fees,
  including those for statutory audits, include the aggregate fees for
  professional services rendered by the principal accountants for the audit of
  Infortes annual financial statements and review of financial statements
  included in Infortes Forms 10-Q.                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                     
|(2) | Audit
  Related Fees include the aggregate fees for assurance and related services by
  the principal accountants that are reasonably related to the performance of
  the audit or review of Infortes financial statements and excluded from Audit
  Fees, including fees for accounting advice and assurance services related to
  various employee benefit plans.
|    |                                                                                                                                                                                                                                                                                                                                                                     
|(3) | Tax Fees
  include the aggregate fees for professional services rendered by the
  principal accountant for tax compliance, tax advice and tax planning.                                                                                                                                                                                                             

The
Audit Committee reviews and considers all independent accountant professional
services when assessing auditor independence. The Audit Committee approved all
audit and non-audit services provided by Infortes independent accountants
during 2002 and 2003 on a case-by-case basis in advance of each engagement. The
Audit Committee does not have a written policy or procedure for the
pre-approval by category of particular audit or non-audit services.

44

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---

PART IV

|ITEM 15. | EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
  FORM 8-K
|-------- | ------------------------------------------------------------------------------

Financial Statements

Infortes
financial statements included in Item 8 of this report are listed in the index
preceding the financial statements.

Statement Schedules and Reports on Form 8-K
Financial Statement Schedules

Exhibits

|       | 2.1  |                                                                                                                        | Agreement of
  Merger among Inforte Corp., INFC Acquisition Corp., COMPENDIT, Inc. and Kevin
  McDonald, as Stockholder Representative, dated March 4, 2004, incorporated
  herein by reference to Exhibit 2.1 to Infortes Form 8-K, dated March 12,
  2004
|------ | ---- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.1  |                                                                                                                        | Certificate
  of Incorporation incorporated herein by reference to Exhibit 3 to Infortes
  Form S-1, as amended, Registration No. 333-92325.                                                                                                               
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.3  |                                                                                                                        | Amended and
  Restated Bylaws dated January 30, 2003.                                                                                                                                                                                                       
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.4  |                                                                                                                        | Agreement,
  dated January 28, 2004, with Marketing Scientists, LLC, a Georgia limited
  liability company (Marketing Scientists), and David Sutton, Infortes
  president and chief operating officer.                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H  3.5 |      | Employment
  agreement, dated November 26, 2003, with David Sutton, Infortes president
  and chief operating officer.
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.3 |                                                                                                                        | Amended and
  Restated 1995 Incentive Stock Option Plan incorporated herein by reference to
  Exhibit 10.3 to Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.4 |                                                                                                                        | Amended and
  Restated 1997 Incentive Compensation Plan incorporated herein by reference to
  Exhibit 10.4 to Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.5 |                                                                                                                        | Form of
  Stock Option Agreement incorporated herein by reference to Exhibit 10.5 to
  Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                                          
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.6 |                                                                                                                        | Amended and
  Restated 1999 Employee Stock Purchase Plan incorporated herein by reference
  to Exhibit 10.6 to Infortes Form S-1, as amended, Registration No.
  333-92325.                                                                                
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.7 |                                                                                                                        | Form of
  Director/Officer Indemnification Agreement incorporated herein by reference
  to Exhibit 10.7 to Infortes Form S-1, as amended, Registration No.
  333-92325.                                                                                    
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 23.1 |                                                                                                                        | Consent of Independent Auditors                                                                                                                                                                                                                             
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 23.2 |                                                                                                                        | Consent of Independent Auditors                                                                                                                                                                                                                             
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 31.1 |                                                                                                                        | Section 302
  certification of the Chief Executive Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 31.2 |                                                                                                                        | Section 302
  certification of the Chief Financial Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 32.1 |                                                                                                                        | Section 906
  certification of the Chief Executive Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 32.2 |                                                                                                                        | Section 906
  certification of the Chief Financial Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | H    |                                                                                                                        | Management
  or compensatory plan or arrangement required to be filed pursuant to item
  14(c) of Form 10-K.                                                                                                                                                

Reports on Form 8-K

| | Form 8-K
  furnished December 5, 2003 (Item 9 Regulation FD Disclosure with respect to
  reporting change in executive officers)                                                              
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                               
| | Form 8-K
  furnished February 2, 2004 (Item 12 Results of Operation and Financial
  Condition with respect to issuance of a press release announcing results for
  the fourth quarter of 2003)
| |                                                                                                                                                                                               
| | Form 8-K
  furnished March 5, 2004 (Item 9 Regulation FD Disclosure with respect to
  agreement to acquire COMPENDIT, Inc.)                                                                   
| |                                                                                                                                                                                               
| | Form 8-K
  filed March 12, 2004 (Item 2 Acquisition or Disposition of Assets with
  respect to acquisition of COMPENDIT, Inc.)                                                                

45

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SIGNATURE PAGE

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on March 12, 2004.

| | INFORTECORP.
| | ------------
| |             
| | By          
| |             
| |             

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|Signature                |  | Title                                   |  | Date            
|------------------------ |  | --------------------------------------- |  | ----------------
|                         |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Philip S. Bligh      |  | Chief
  Executive Officer and Chairman  |  | March 12,
  2004
|                         |  |                                         |  |                 
|Philip S. Bligh          |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ David A. Sutton      |  | Chief
  Operating Officer and President |  | March 12,
  2004
|                         |  |                                         |  |                 
|David A. Sutton          |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Nick Heyes           |  | Chief
  Financial Officer and Secretary |  | March 12,
  2004
|                         |  |                                         |  |                 
|Nick Heyes               |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Harvey H. Bundy, III |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Harvey H. Bundy, III     |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Philp Kotler         |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Philip Kotler            |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Ray C. Kurzweil      |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Ray C. Kurzweil          |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Stephen C.P. Mack    |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Stephen C.P. Mack        |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ John Morphy          |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|John Morphy              |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Michael E. Porter    |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Michael E. Porter        |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Al Ries              |  | Director                                |  | March 12,
  2004
|                         |  |                                         |  |                 
|Al Ries                  |  |                                         |  |                 
|                         |  |                                         |  |                 
|/s/ Steven Getto         |  | Controller                              |  | March 12,
  2004
|                         |  |                                         |  |                 
|Steven Getto             |  |                                         |  |                 

46

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EXHIBIT INDEX

|       | 2.1  |                                                                                                                        | Agreement of
  Merger among Inforte Corp., INFC Acquisition Corp., COMPENDIT, Inc. and Kevin
  McDonald, as Stockholder Representative, dated March 4, 2004, incorporated
  herein by reference to Exhibit 2.1 to Infortes Form 8-K, dated March 12,
  2004
|------ | ---- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.1  |                                                                                                                        | Certificate
  of Incorporation incorporated herein by reference to Exhibit 3 to Infortes
  Form S-1, as amended, Registration No. 333-92325.                                                                                                               
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.3  |                                                                                                                        | Amended and
  Restated Bylaws dated January 30, 2003.                                                                                                                                                                                                       
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 3.4  |                                                                                                                        | Agreement,
  dated January 28, 2004, with Marketing Scientists, LLC, a Georgia limited
  liability company (Marketing Scientists), and David Sutton, Infortes
  president and chief operating officer.                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H  3.5 |      | Employment
  agreement, dated November 26, 2003, with David Sutton, Infortes president
  and chief operating officer.
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.3 |                                                                                                                        | Amended and
  Restated 1995 Incentive Stock Option Plan incorporated herein by reference to
  Exhibit 10.3 to Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.4 |                                                                                                                        | Amended and
  Restated 1997 Incentive Compensation Plan incorporated herein by reference to
  Exhibit 10.4 to Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                   
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.5 |                                                                                                                        | Form of
  Stock Option Agreement incorporated herein by reference to Exhibit 10.5 to
  Infortes Form S-1, as amended, Registration No. 333-92325.                                                                                                          
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.6 |                                                                                                                        | Amended and
  Restated 1999 Employee Stock Purchase Plan incorporated herein by reference
  to Exhibit 10.6 to Infortes Form S-1, as amended, Registration No.
  333-92325.                                                                                
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|H      | 10.7 |                                                                                                                        | Form of
  Director/Officer Indemnification Agreement incorporated herein by reference
  to Exhibit 10.7 to Infortes Form S-1, as amended, Registration No.
  333-92325.                                                                                    
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 23.1 |                                                                                                                        | Consent of Independent Auditors                                                                                                                                                                                                                             
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 23.2 |                                                                                                                        | Consent of Independent Auditors                                                                                                                                                                                                                             
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 31.1 |                                                                                                                        | Section 302
  certification of the Chief Executive Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 31.2 |                                                                                                                        | Section 302
  certification of the Chief Financial Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 32.1 |                                                                                                                        | Section 906
  certification of the Chief Executive Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | 32.2 |                                                                                                                        | Section 906
  certification of the Chief Financial Officer                                                                                                                                                                                                  
|       |      |                                                                                                                        |                                                                                                                                                                                                                                                             
|       | H    |                                                                                                                        | Management
  or compensatory plan or arrangement required to be filed pursuant to item
  14(c) of Form 10-K.                                                                                                                                                

49

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