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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 10-K

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2001

                        Commission File Number 00-28785

                               LANTE CORPORATION
            (Exact name of registrant as specified in its charter)

                      Delaware                 36-3322393
                   (State or other
                   jurisdiction of
                  incorporation or          (I.R.S. Employer
                    organization)          Identification No.)

                            600 West Fulton Street,
                      Suite 400, Chicago, Illinois 60661
              (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (312) 696-5000

       Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $.01 per share

                               (Title of Class)

   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 ____   No [X]

   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 in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

   The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant, based upon the closing sale price of the
registrant's Common Stock on March 15, 2002, was $14,315,904.

   The number of shares of the registrant's Common Stock outstanding as of
March 15, 2002 was 36,844,579.

                     DOCUMENTS INCORPORATED BY REFERENCE:

   Portions of the registrant's Definitive Proxy Statement for the Annual
Meeting of Stockholders scheduled to be held on May 23, 2002 are incorporated
by reference into Part III of this Report.

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                               TABLE OF CONTENTS

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Part I...........................................................................................   1

   Item 1. Business..............................................................................   1
   Item 2. Properties............................................................................  10
   Item 3. Legal Proceedings.....................................................................  11
   Item 4. Submission of Matters to a Vote of Security Holders...................................  11

Part II..........................................................................................  12
   Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.................  12
   Item 6. Selected Financial Data...............................................................  13
   Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.  13
   Item 7A. Quantitative and Qualitative Disclosures About Market Risk...........................  22
   Item 8. Financial Statements and Supplementary Data...........................................  22
   Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..  22

Part III.........................................................................................  23
   Item 10. Directors and Executive Officers of the Registrant...................................  23
   Item 11. Executive Compensation...............................................................  23
   Item 12. Security Ownership of Certain Beneficial Owners and Management.......................  23
   Item 13. Certain Relationships and Related Transactions.......................................  23

Part IV..........................................................................................  24

   Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K......................  24

Signatures.......................................................................................  25

Index to Consolidated Financial Statements....................................................... F-1
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                                    PART I

             CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

   Because we want to provide you with more meaningful and useful information,
this Annual Report on Form 10-K includes forward-looking statements that
reflect our current expectations and projections about our future results,
performance, prospects and opportunities. We have attempted to identify these
forward-looking statements by using words such as "may," "will," "expects,"
"anticipates," "believes," "intends," "estimates," "could" or similar
expressions. Forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, as amended.
These forward-looking statements are based on information currently available
to us and are subject to a number of risks, uncertainties and other factors
that could cause our actual results, performance, prospects or opportunities in
2002 and beyond to differ materially from those expressed in, or implied by,
these forward-looking statements. See "Business--Risk Factors" for a
description of these and other risks, uncertainties and factors.

   You should not place undue reliance on any forward-looking statements.
Except as required by the federal securities laws, we undertake no obligation
to publicly update or revise any forward-looking statements, whether as a
result of new information, future events, changed circumstances or any other
reason after the date of this Annual Report on Form 10-K. All references to
"we," "us," "our," "Lante" and the "Company" refer to Lante Corporation and its
subsidiaries.

Item 1. Business

   Lante Corporation is a technology consulting company that helps Global 2000
clients leverage new technologies to build competitively superior businesses.
We customize core extended enterprise applications to provide customers with
new features to enable them to benefit from the trend toward information that
is more interactive, real-time, collaborative, extended and private. Over the
past several years, we have helped companies develop Internet-based
business-to-business connections to make business more efficient. As technology
continues to evolve, we are now building upon our extended enterprise focus by
utilizing new technologies to enhance the functionality of the applications we
provide to our clients. This enables us to securely provide applications with
increased functionality to aggregate and manage information from multiple
sources (content management), format and distribute information to fit specific
user profiles (portals), perform information analysis (business analytics
dashboard), and encourage collaborative information sharing (business to
business integration). By developing highly interactive, executable
applications with extendibility to multiple platforms, we help our clients
interact more directly and effectively with their business partners.

   Our headquarters are located at 600 West Fulton, Suite 400, Chicago, IL
60661. Our website is found at www.lante.com and provides additional
information on our company, services, client work, alliance partners and
management team. The information on our website is not incorporated by
reference into this document and should not be considered to be a part of this
document. Our common stock is traded on the Nasdaq National Market under the
symbol "LNTE."

Overview

  History

   Lante was founded in 1984 as a consulting firm focused on the emergence of
personal computers in an era dominated by the mainframe. In the late 1980s, we
foresaw the trend toward LANs and led early application development and
integration efforts using those technologies. Again well ahead of many
competitors, we began developing client-server solutions in the early 1990s. By
1996, we began to focus exclusively on providing Internet-based solutions for
clients. We did considerable work in the area of eMarkets before exchanges and
private marketplaces entered the mainstream business landscape. Recently, we
have been focusing on helping companies to develop Internet-based
business-to-business connections that are more direct and efficient.

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  Recent Initiatives

   Throughout 2001, demand for information technology services declined, not
only for us, but for much of the technology consulting sector. The competitive
landscape changed dramatically as several of our competitors combined with one
another or ceased operations altogether. Systems integration work became more
commoditized with an excess supply of consultants, which resulted in downward
rate pressure throughout the year. Excess capacity caused many companies,
including us, to lay off personnel and rationalize office space in order to
reduce costs. After the events of September 11, 2001, demand fell further as
our clients became more cautious about spending, placed projects on hold and
delayed purchase decisions.

   In addition to taking aggressive cost-cutting measures such as layoffs and
office closures, we took several steps to remain competitive in this difficult
economic environment. We revamped our service offerings to reflect increasing
interest from clients in solutions that enable improved productivity and
communication with key business partners. In addition, we completed an
acquisition of key assets from Luminant Worldwide Corporation, a Texas-based
corporation providing electronic commerce professional services, on January 8,
2002. The Luminant acquisition provided us with over 20 new Global 2000 client
relationships, and enabled us to enhance our business development efforts
through the addition of a national sales organization. With the addition of key
clients and personnel in Dallas, Houston and New York, we were able to gain
critical mass in these geographic areas. Luminant also improved our portals,
content management and Enterprise Application Integration (EAI) practices and
helped us establish an energy industry vertical.

   Following the integration of Luminant's assets and the resizing of the
combined organization in early 2002, we have approximately 170 billable
employees and a total employee base of approximately 230. We have offices in
Chicago, Dallas, Houston, New York and Seattle.

   In early 2000, we derived a substantial amount of revenues from smaller,
start-up clients. We have migrated our client mix such that in 2001 we derived
over 90% of our revenues from Global 2000 clients. However, as our client base
has shifted to larger companies, our client concentration has also increased.
In 2001, our five largest clients accounted for 73% of our revenues, which is
an increase from 30% in 2000. Although we began work for 21 new clients in
2001, two of our clients, Aon Service Corporation and Airborne Express,
accounted for 39% and 12% of our revenues, respectively. We do not expect to
perform the same volume of work for either client in 2002. During 2000, no
client represented more than 10% of total revenues.

   We enter into professional services agreements with substantially all of our
clients. The terms of each agreement are tailored to fit each engagement, but
generally allow the client significant discretion to determine the timing of
each project and to terminate our services on short, if any, notice. Our
business could be adversely affected if any client delays, suspends or
terminates any of our material engagements.

   Prior to 2000, a majority of our engagements were billed on a fixed fee
basis that required us to accurately estimate the time and expenses necessary
to complete a particular engagement. Because of the complex nature of our
engagements and the difficulty in predicting the amount of resources needed to
complete such engagements, most of our engagements in 2000 and 2001 were on a
time and materials basis. While we will continue to perform services on a fixed
fee basis, we expect the majority of our future engagements to be billed on a
time and materials basis.

Industry Background

   As we have done many times throughout our 18-year history, we see a new
development on the horizon that we believe has the potential to fundamentally
change the use of Internet-based platforms and applications by businesses. Much
of our work over the past five years has been focused on helping companies
harness the power of the Internet. However, it is increasingly apparent that
although the Web is an excellent platform for content distribution, it has
certain inherent limitations for real-time business applications. Web-based
interactions are processed through a series of Web pages, and applications
delivered in this manner can be slow and unreliable as browsers timeout and
users wait for pages to refresh. While these limitations have been acceptable
to date as

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companies have encouraged clients to pull content from the Web, overcoming
these issues opens new possibilities for many mission-critical business
applications, such as real-time inventory updates and operational status
dashboards.

   We believe that the next generation of Internet advances will involve
applications that leverage smarter information that is more real-time,
collaborative, interactive, personalized and private. Companies are
increasingly interacting more directly and effectively with their business
partners. As a result, businesses expect real-time, two-way interactions to
deliver relevant information when they need it, instead of simply when they
request it.

   Industry analysts have also recognized this trend. In a February 13, 2002
report, Giga asserts that, "[t]welve months from now, Giga thinks e-business
will be replaced by a new concept, one that will jazz up enterprise with terms
like agile and 'real-time' that reflect the realities of the recovering,
post-Internet world that companies have to compete in." (Source: Andrew
Bartels, Vice President, Research Leader, Giga Information Group, Inc.,
"'E-Business' Is Still Alive--But 'Agile, Real-Time Enterprise' Will Likely
Take Its Place.") Likewise, in a November 19, 2001 report, Forester Research
indicated that it "expects scores of post-Web technologies to emerge and take
hold in the next decade . . . paving the way for a more compelling net that we
call the 'X' internet." We believe that these innovations will fuel new demand
for enriched, mission-critical business applications. In functions where timing
is crucial, such as trading or auction environments, new technologies can
greatly improve speed and reliability, as well as create a higher level of
interaction for participants. In functions where critical data is found in
remote locations, for example in oil rigs or retail store outlets, new
technologies that enable the instantaneous collection, aggregation and analysis
of data to assist decision-makers with real-time data in an interactive
environment are emerging. By leveraging these new technologies, companies can
improve the productivity of their workforce, foster better relationships with
key business partners and customers, enhance the efficiencies of their
processes and reduce their costs.

Our Strategy and Actions

   We continue to evolve our strategy of helping clients extend their
enterprises by leveraging new technologies to create competitively superior
businesses. This strategy builds upon the new technologies and application
development trends outlined above. We will use these new technologies to
customize applications for our clients to create real-time, interactive and
reliable business solutions over the Internet. This strategy builds upon our
business partner integration focus by introducing increased functionality that
can strengthen and enhance real-time relationships and interactions between
business partners.

  Marketing and Sales

   Our marketing and sales efforts are designed to generate qualified leads for
our services and to continually improve our reputation in the marketplace. We
expect to execute a marketing, media relations and analyst outreach program to
take our value proposition to market. Our external communications efforts
involve sharing client success stories, new alliance partnerships, awards and
accolades in addition to significant and material corporate news. We develop
differentiating points-of-view on current technology issues to support our
marketing and sales efforts as well as our client delivery.

   We expect to continue to build momentum in our national sales efforts to
generate new business in 2002. Our business development professionals secure
new business through a combination of qualified lead generation and targeted
direct marketing efforts. Because of the recent acquisition of assets from
Luminant, we are focused on cross-selling services into our larger client base.
In addition, we are rolling out a national sales methodology that is
buyer-focused. We plan to grow business within existing accounts as well as
bring new accounts on board in 2002.

   We are also investing in several small development teams to produce
intellectual property that demonstrates to clients the value and impact of the
new technologies that deliver real-time relationships and interaction with
business partners. We plan on developing demonstrations to take specific
solutions to targeted market sectors

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such as energy trading, mortgage processing and securities brokerage companies.
We continue to evaluate other sectors where there may be opportunities to
utilize these technologies.

   We expect to continue our practice of developing and maintaining close
strategic alliances with vendors that are providing the platform tools and more
robust applications to enhance current Internet technologies, such as
Interwoven, Documentum, Webmethods, IBM, Sun/iPlanet, Microsoft and Tibco. In
addition, given the shifts in the technology landscape described above, we
expect to establish new alliance relationships in 2002 with companies that are
focused on bringing to market the requisite new technologies that will allow us
to implement our strategy. We expect these relationships to involve a wide
range of cooperative activities, including working jointly on client
engagements, evaluating and recommending each other's technology solutions to
customers, and training and knowledge transfer regarding each other's
solutions. We believe that these relationships and strategic alliances will
enable us to provide better delivery and value to our existing clients and will
attract new clients through referrals and joint engagements.

  Competition

   The Internet services market underwent a dramatic downturn in 2001, leading
to a decrease in demand for Internet services, increased competition, reduced
billing rates and overcapacity in the market. Market conditions spurred
consolidation and bankruptcies within our industry. Our competitors include
technology consulting firms and integrators, Internet service firms, and the
in-house information technology, marketing and design service departments of
our current and potential clients.

  Delivery and Quality

   We intend to continue to deliver outstanding service and quality to our
industry-leading clients. We use our proprietary delivery framework to guide
our approach to client projects, ensuring consistency of delivery and quality.
We maintain four competency groups that represent our employees' core skills:
technology, strategy, user experience and delivery management. We continually
evaluate opportunities that will enhance, support and advance our business
strategy and our ability to deliver robust technology solutions and grow our
business.

  People and Culture

   Our people are very important to the success of our business. Our
collaborative culture is the hallmark of our delivery approach. Our key values
are teamwork, character, integrity, excellence and passion. To encourage the
achievement of these values, we reward teamwork and promote individuals who
demonstrate these values. To promote these values as well as our culture,
client delivery approach and internal processes, we conducted in-depth
orientation sessions with all newly-hired employees following the Luminant
transaction.

  Intellectual Property Rights

   We rely on a combination of trade secrets, nondisclosure and other
contractual arrangements, as well as copyright and trademark laws to protect
our proprietary rights. We enter into confidentiality agreements with our
employees, consultants and clients, and limit access to and distribution of our
proprietary information.

   Our services involve the development of business and technology solutions
for specific client engagements. Ownership of these solutions is the subject of
negotiation and is frequently assigned to the client, although we may retain a
license for certain uses. Certain of our clients have prohibited us from
marketing the solutions developed for them for specified periods of time or to
specified third parties, and we anticipate that certain of our clients will
demand similar or other restrictions in the future.

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Risk Factors

   You should carefully consider the risks and uncertainties described below
because they could materially and adversely affect our business, financial
condition, operating results and prospects.

We may report an operating loss in 2002 and may not achieve or sustain future
profitability

   Although our core business is providing information technology services, our
business strategy continues to evolve. We have reported an operating loss in
each of the previous three fiscal years, and expect to report a loss for the
first quarter of 2002. Furthermore, our revenues have generally been decreasing
since the third quarter of fiscal 2000, and this trend is expected to continue
into at least the first portion of 2002. It is possible that we will continue
to incur losses, and that our revenues will continue to decline, for the
remainder of 2002. During the course of 2001, we fundamentally restructured our
business by consolidating office space, reducing our workforce and reshaping
our service offerings. To the extent that our restructuring plan does not
generate the cost savings or revenues that we anticipate, our results of
operations and liquidity could be materially and adversely affected. If we are
unable to increase our revenues, or if our operating expenses exceed our
expectations, we may continue to incur losses and may not achieve
profitability. If we achieve profitability in the future, we may not sustain it.

Our client concentration remains high and our operating results could be
adversely affected if we are unable to expand our client base

   Since we began shifting our focus to Internet services in 1996, we have
generated a substantial portion of our revenues from a relatively small number
of clients. For example, our ten largest clients accounted for approximately
88% of our revenues in 2001, and our five largest clients represented 89% of
our revenues in the fourth quarter of 2001. Virtually all of our clients can
terminate our services on relatively short, if any, notice, and virtually none
of our contracts guarantee us any specific or minimum amount of business. We
believe that clients that accounted for 66% of our revenues in 2001 will
substantially curtail their business with us in 2002. If we are unable to
obtain new business to replace this lost business, or if any of our other
significant clients use less of our services, delay an engagement or terminate
their relationship with us, our revenues could substantially decline and our
operating results could be adversely affected. Our reliance on a limited number
of clients also magnifies the risks of not being able to collect accounts
receivables from any one client. We expect a relatively high level of client
concentration to continue as we continue to target larger, established
companies.

We have experienced substantial turnover in our leadership team, and if our new
executives are unable to efficiently work together, or if we lose any of our
remaining executives, it may harm our ability to obtain and retain client
engagements, maintain a cohesive culture and compete effectively

   We believe that a significant portion of our success depends on the ability
of our executives to work together effectively. For a number of reasons, we
have experienced significant turnover in our management team since the
beginning of 2001. During the past several months, we have appointed a new
Chairman of the Board of Directors, eliminated the chief operating officer
position, replaced the managing directors of each of our three regions and
eliminated our vice presidents of marketing and human relations. As a result,
our current management team has limited experience working together, which may
make it difficult for us to effectively operate our business and our financial
results may be adversely impacted. If we lose the services of any of our
remaining executives, it may be difficult for us to replace those individuals,
and the resulting uncertainty could destabilize our client and employee
relations.

Exploration of strategic alternatives may destabilize our business and distract
management

   We expect to engage an investment banker to assist us in the process of
exploring various strategic alternatives for the Company. These alternatives
may include a strategic alliance or further restructuring of our current
operations, the acquisition of another business, a sale or merger of the
Company, or other similar transactions, which could materially change the
nature of the Company. Although we will consider a variety of short and long
term opportunities during this process, there can be no assurance that a
transaction will be

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consummated. However, the existence of this process may create additional
challenges for the business as we strive to obtain new engagements and maintain
existing client and employee relationships. This process may also divert
management's attention from the ongoing business and further reduce cash
available to fund operations. If realized, any of these risks could have a
material adverse effect on our business, financial condition and results of
operations.

Our success is dependent upon the market for Internet services, which, along
with the economy, is experiencing a downturn

   As a result of the slowing of the U.S. economy and the effects of the events
of September 11, 2001, we believe that the overall level of spending on
information technology has declined. Our clients, particularly those in the
insurance, financial services, and software and technology businesses, as well
as those based in or near New York, have been particularly reluctant to
initiate new projects for the past several months. More projects are also being
deferred, reduced in scope or otherwise cancelled. These macroeconomic
challenges are being exacerbated by the current overcapacity in the Internet
services market. Many firms in our industry have reduced their billing rates in
an effort to obtain or retain projects. In addition, many of our competitors
have also laid off or furloughed significant billable personnel. Each of these
developments has adversely affected our business by decreasing our operating
margins and increasing the number of low cost providers of services similar to
those that we offer. A prolonged economic slowdown or continued uncertainty
could adversely impact our business, financial position and results of
operations.

Our recent reductions in force combined with the potential defection of key
employees may make it more difficult for us to attract and retain clients and
retain our employees

   During 2001 and 2002, we instituted restructuring plans that included the
closure of various offices and the termination of a significant portion of our
workforce. Our success depends in large part on our ability to obtain and
retain clients and qualified employees. Our recent restructurings and
reductions in force may have damaged our reputation in the Internet services
market and may make it more difficult for us to generate new business and
retain our existing client relationships and current employees. If any of our
key employees joined a competitor or formed a competing company, some of our
clients might choose to use the services of that competitor or new company
instead of our own. Many of our key employees have entered into agreements with
us that contain covenants not to solicit business from our clients for periods
of up to two years following termination. We have historically not sought
judicial enforcement of these restrictive covenants. The enforceability of
restrictive covenants is difficult to predict because a court would have the
authority to consider a variety of equitable factors. If a court were to view
the scope or duration of the restrictive covenants as excessive, the covenants
may not be enforceable as written or at all. These actions, combined with the
fact that many of our employees hold options to purchase our common stock with
exercise prices above the current market price of our common stock, may also
make it more difficult for us to retain our employees.

Our revenues are difficult to predict because they are derived from
project-based client engagements

   We derive almost all of our revenues from project-based client engagements
that vary in size and scope. As a result, our quarterly revenues are difficult
to predict because a client that accounts for a significant portion of our
revenues in a given period may not generate a similar amount of revenues, if
any, in subsequent periods. In addition, because many of our client engagements
involve sequential stages, each of which may represent a separate contractual
commitment, a client may choose not to retain us for subsequent stages of an
engagement or for new projects. Furthermore, our existing clients can generally
reduce the scope of an engagement or cancel their use of our services without
penalty and with little or no notice. If clients terminate existing engagements
or if we are unable to enter into new engagements, our revenues could
substantially decline and we may underutilize existing resources that we cannot
quickly redeploy to other client engagements. Because a percentage of our
expenses, particularly labor costs, are fixed in amount, these factors may
cause our operating income and operating margins to vary significantly from
quarter to quarter. Due to these factors, we believe that our results for any
given quarter or series of quarters are not necessarily indicative of our
results that may be expected for any future period, and you should not rely on
such comparisons as an indication of our future performance.

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Intense competition in the Internet services market could impair our ability to
grow and achieve profitability

   We face competition from companies such as Accenture, Andersen, Cap Gemini,
Ernst & Young, CSC, Deloitte Consulting, DiamondCluster International, EDS, IBM
Global Services, Inforte, KPMG Consulting, PricewaterhouseCoopers and Sapient.
We may not be able to compete effectively with current or future competitors,
which could impair our ability to grow and achieve profitability. Some of our
competitors have longer operating histories, larger client bases, more
established relationships with their clients, significant international
operations that capitalize on lower labor costs, superior brand or name
recognition and significantly more financial, technical and marketing resources
than we do. In addition, several of these competitors also have significantly
more scale and scope than we do and offer a broader range of solutions. As a
result, our competitors may be in a stronger position to respond more quickly
to new or emerging technologies and changes in client requirements, and can
devote more resources than we can to the development, promotion and sale of
their services. In addition, there are relatively low barriers to entry into
the IT services market. We do not own any patented technology that would stop
competitors from entering this market and providing services similar to ours.
As a result, the emergence of new competitors may pose a threat to our
business. Existing or future competitors may develop and offer services that
are superior to, or have greater market acceptance than, ours. Consequently,
our business financial position and results of operations could be adversely
impacted.

If our common stock is delisted from the Nasdaq National Market, the liquidity,
visibility and price of our common stock may decrease

   Our common stock trades on the Nasdaq National Market (NNM). The NNM
requires all listed companies to satisfy certain requirements, including a
minimum bid price of $1.00 per share. In 2001, we failed to meet this listing
requirement for a substantial period of time and were notified of this
deficiency by Nasdaq. However, subsequent to the events of September 11th,
Nasdaq implemented a moratorium on the enforcement of certain of its listing
requirements, including the minimum bid price test. Nasdaq's moratorium expired
on January 2, 2002, and, the market price of our common stock has recently
traded below $1.00 per share. If we fail to meet Nasdaq's continued listing
requirements, our common stock might be delisted from the NNM. Under those
circumstances, we would be forced to list our common stock on the OTC Bulletin
Board or some other quotation medium, depending upon our ability to meet the
specific listing requirements of those quotation systems. If this occurs, it
will be more difficult to buy or sell our common stock and to obtain timely and
accurate quotations for those shares. Stock trading on the OTC Bulletin Board
is typically less liquid and usually involves larger variations between the bid
and ask price. Therefore, a delisting could result in a decline in the trading
market for our common stock that could depress our stock price and could have
an adverse effect on the liquidity of our common stock. In addition, delisting
from the NNM might negatively impact our reputation and, as a consequence, our
business.

The market price of our common stock has fluctuated and may continue to do so

   During 2001, the market price of our common stock was volatile, fluctuating
from a high trading price of $3.94 to a low trading price of $0.59 per share.
During 2001, our price per share declined on comparatively low trading volume
that averaged approximately 61,000 shares per day. Low trading volume has made
it more difficult to trade large volumes of common stock. If the trading volume
for our common stock does not increase, market price volatility may continue or
increase. In the past, stockholders have also instituted securities class
action litigation following periods of market volatility. If we were involved
in additional securities litigation regarding our common stock, it could result
in a substantial cost and divert resources and the attention of executive
management from our business.

If we are unable to successfully integrate our recent acquisition of key assets
of Luminant, our existing business could be adversely affected, and we might
not realize the expected benefits from that transaction

   In January 2002, we acquired certain assets of Luminant Worldwide
Corporation. As part of that transaction, we acquired operations in Dallas,
Houston and New York. In addition to substantially increasing our headcount,
the Luminant acquisition also added new expertise in the energy industry and
business-to-consumer interactive Web development. Integrating the technology,
operations and personnel of the two businesses will

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require a substantial amount of time and attention from our management team.
This diversion of management's attention, as well as any difficulties
encountered in the integration process, could have an adverse impact on our
ability to retain Luminant's clients, service our existing clients and could
generally hamper our ability to win new business. If we are unable to
successfully manage this integration, our revenues and operating results may be
adversely affected.

With the recent bankruptcy filing by Enron Corporation and the continued
uncertainty in the energy industry, demand and revenues from our energy based
clients could remain weak and may continue to decline

   A significant portion of the Luminant business we acquired relates to the
energy industry. We have experienced project delays and cancellations from
various energy clients in the first quarter of 2002. As the economy and the
market continue to react to the Enron situation and the energy industry
experiences continued weakness, our business development efforts with respect
to our energy industry vertical may remain weak and continue to decline.

Litigation currently pending against the Company may continue and adversely
affect the Company

   On or about August 3, 2001, a class action lawsuit was filed in the United
States District Court, Southern District of New York, against us, certain of
our present and former officers and directors and Credit Suisse First Boston
Corp. ("CSFB"), Deutsche Bank Securities, Inc. and Thomas Weisel Partners, LLC,
the managing underwriters of our February 2000 initial public offering. The
complaint seeks unspecified damages as a result of various alleged securities
law violations arising from activities purportedly engaged in by the
underwriters in connection with our initial public offering. We believe that we
have various meritorious defenses to the claim and will defend ourselves
accordingly. The action is being coordinated with over three hundred other
nearly identical actions filed against other companies before one judge in the
U.S. District Court for the Southern District of New York. No date has been set
for any response to the complaint. We understand from the staff of the
Securities and Exchange Commission ("SEC") that the SEC is conducting an
investigation into issues similar to those alleged in the class action
complaint filed against us and numerous other companies. In late 2001, the SEC
indicated that it might request certain information and documents from us in
connection with that process, but to date, we have not received any such
requests.

   We cannot accurately predict the ultimate outcome of these proceedings.
Class action lawsuits and investigations are often costly and time consuming
and may distract management from operating the business. Any unfavorable
outcome could have a material adverse impact on our business, financial
condition and results of operations.

Many of our engagements are complicated projects that involve the use of new
technology, which may make it difficult for us to perform to the satisfaction
of our clients

   Clients often hire us for complex development engagements that they cannot
complete themselves. These projects often involve the use of new technology
that has not been extensively tested or used in actual applications. We attempt
to negotiate appropriate provisions into our professional services agreements
to protect us against unexpected delays or failures caused by this new
technology, but we often are unable to do so. In any event, if we fail to
successfully complete projects according to the agreed upon schedule and
budget, our client relationships suffer, and our business could be adversely
impacted.

It is possible that other parties may assert that we have infringed on their
intellectual property rights or that our employees have misappropriated their
proprietary information, which could result in substantial costs and diversion
of management's attention

   It is possible that other parties may assert infringement claims against us
in the future or claim that we have violated their intellectual property
rights. While we know of no basis for any claims of this type, authorship of
intellectual property rights can be difficult to verify. We frequently
indemnify our clients against certain infringement claims relating to work we
have performed for them. Regardless of the merits, infringement or
misappropriation claims by third parties could be time consuming and costly to
defend, divert our attention and resources or require us to make changes to our
technologies.

                                      8

<PAGE>

Our business may suffer if we have disputes over our right to reuse
intellectual property developed for specific clients

   Part of our business involves the development of software applications for
discrete client engagements. Ownership of client-specific software is generally
retained by the client, although we typically retain the right to reuse some of
the applications, processes and other intellectual property developed in
connection with client engagements. Issues relating to the rights to
intellectual property can be complicated, and disputes may arise that could
adversely affect our ability to reuse these applications, processes and other
intellectual property. These disputes could damage our relationships with our
clients and our business reputation, divert our management's attention and have
a material adverse effect on our business.

Our current services may become obsolete and unmarketable if we are not able to
keep pace with the latest technological changes and client preferences

   We must respond successfully on a timely and cost-effective basis to changes
in technology, industry standards and client preferences to remain competitive
and serve our clients effectively. We may experience technical or other
difficulties that prevent or delay our development or introduction of solutions
that address changes in technology, industry standards and client preferences.
These difficulties could cause our current services to become obsolete and
unmarketable.

Our business may be harmed if we fail to accurately estimate the cost, scope,
expectations or duration of a fixed fee engagement or fail to communicate
changes to specifications to our clients

   A small percentage of our revenues were derived from fixed fee engagements
during 2001. While we expect a majority of our future engagements to instead be
billed on a time and materials basis, we will continue to perform services on a
fixed fee basis. Because of the complexity of many of our fixed fee client
engagements, accurately estimating the cost, scope, expectations and duration
of a particular fixed fee engagement can be a difficult task. If we fail to
appropriately structure one or more fixed fee engagements, we could be forced
to devote additional resources to these engagements for which we will not
receive additional compensation. To the extent that an expenditure of
additional resources is required on a fixed fee engagement, this could harm our
reputation and result in a loss on the engagement.

If we are unable to maintain our reputation and expand our name recognition, we
may have difficulty attracting new business and retaining current clients and
employees, and our business may suffer

   We believe that establishing and maintaining a good reputation and name
recognition are critical for attracting and retaining clients and employees. We
also believe that reputation and name recognition are crucial to our success as
a result of the intense competition that exists among providers of Internet
services. If our reputation is damaged or if potential clients are not familiar
with us or the solutions we provide, we may be unable to attract new, or retain
existing, clients and employees. Promotion and enhancement of our name will
depend largely on our success in continuing to provide effective solutions and
to capitalize upon our marketing strategies. If clients do not perceive our
solutions to be effective or of high quality, our brand name and reputation
will suffer. In addition, if solutions we provide have defects, critical
business functions of our clients may fail, and we could suffer adverse
publicity as well as economic liability. The financial instability of many of
our smaller competitors has made market observers more cautious about
recommending smaller IT services firms to potential clients, which creates an
additional challenge to our reputation-building efforts.

The absence of international operations could harm our business development
efforts with global companies and may make us less competitive on a rate basis

   We have focused our business strategy on Global 2000 companies that often
have offices outside of the U.S. Our lack of international presence could lead
to a loss of potential opportunities to provide services to international
operations of large global companies. In addition, many of our competitors have
international operations in countries where labor costs are lower than the U.S.
This allows some of our competitors to offer lower billing rates for certain
consulting activities with clients. If the international operations of our
competitors continue to drive competitive billing rates down, our margins and
results of operations could be adversely impacted.

                                      9

<PAGE>

Government regulation could adversely affect our business

   Laws or regulations relating to the Internet could adversely affect us. An
increase in federal, state or foreign legislation or regulation of the Internet
could hinder its continued development and could impede the Internet's use as
an effective medium. If this occurs, existing and prospective clients may
decide not to use our solutions. In addition, a number of legislative proposals
have been made at the federal, state and local levels and by foreign
governments that could impose taxes on online commerce. The moratorium
preventing state and local governments from taxing Internet access, taxing
electronic commerce in multiple states and discriminating against electronic
commerce expires November 1, 2003. Existing state and local laws that tax
Internet related matters were expressly excluded from this moratorium.
Government regulations, and other attempts at regulating or blocking commerce
over the Internet could impair our business.

Our affiliates can control matters requiring stockholder approval because they
own a large percentage of our common stock, and they may vote this common stock
in a way with which other stockholders may not agree

   Our affiliates own approximately 62% of the outstanding shares of our common
stock. As a result, if these persons act together, they will have the ability
to exercise substantial control over our affairs and corporate actions
requiring stockholder approval, including the election of directors, a sale of
substantially all our assets, a merger with another entity or an amendment to
our certificate of incorporation. The ownership position of these stockholders
could delay, deter or prevent a change in control and could adversely affect
the price that investors might be willing to pay in the future for shares of
our common stock.

Provisions of our charter and by-laws and Delaware law could deter takeover
attempts that may offer you a premium, which could adversely affect our stock
price

   Provisions of our certificate of incorporation, our by-laws and Delaware law
make acquiring control of us without the support of our board of directors
difficult for a third party, even if the change of control would be beneficial
to our stockholders. The existence of these provisions may deprive our
stockholders of an opportunity to sell their shares at a premium over
prevailing prices and could negatively affect the market price for our common
stock. For example, our certificate of incorporation provides that the board of
directors will be divided into three classes as nearly equal in size as
possible with staggered three-year terms. This classification of the board of
directors has the effect of making it more difficult for stockholders to change
the composition of the board of directors. In addition, our certificate of
incorporation authorizes our board of directors to issue up to 10,000,000
shares of "blank check" preferred stock. This means that, without stockholder
approval, the board of directors has the authority to attach special rights to
this preferred stock, including voting and dividend rights. With these rights,
preferred stockholders could make it more difficult for a third party to
acquire our company. A special meeting of stockholders may only be called by a
majority of the board of directors or by our president, chief executive officer
or chairman. In addition, a stockholder proposal for an annual meeting must be
received within a specified period of time to be placed on the agenda. Because
stockholders do not have the ability to require the calling of a special
meeting of stockholders and are subject to timing requirements in submitting
stockholder proposals for consideration at an annual meeting, any third-party
takeover not supported by the board of directors would be subject to
significant delays and difficulties.

Item 2. Properties

   We do not own any real estate. However, we lease approximately 6,000 square
feet of office space for our corporate headquarters in Chicago, Illinois
pursuant to a lease that expires on November 30, 2009. We also lease other
office space in Charlotte, Chicago, Dallas, Houston, Los Angeles, New York, San
Francisco and Seattle. We have closed several offices and are attempting to
sublease vacant space in Chicago, Los Angeles, San Francisco and Seattle. We
currently have space that is being sublet in Charlotte and Dallas. We do not
consider any specific leased location to be material to our operations, and we
believe that equally suitable alternative locations are available in all areas
where we currently do business.

                                      10

<PAGE>

Item 3. Legal Proceedings

   On or about August 3, 2001, a class action lawsuit was filed in the United
States District Court, Southern District of New York, against us, certain of
our present and former officers and directors and Credit Suisse First Boston
Corp. ("CSFB"), Deutsche Bank Securities, Inc. and Thomas Weisel Partners, LLC,
the managing underwriters of our February 2000 initial public offering. The
complaint seeks unspecified damages as a result of various alleged securities
law violations arising from activities purportedly engaged in by the
underwriters in connection with our initial public offering. Plaintiffs allege
that the underwriter defendants agreed to allocate stock in the Company's
initial public offering to certain investors in exchange for excessive and
undisclosed commissions and agreements by those investors to make additional
purchases of stock in the aftermarket at pre-determined prices. Plaintiffs
allege that the prospectus for the Company's initial public offering was false
and misleading in violation of the securities laws because it did not disclose
these arrangements. We believe that we have various meritorious defenses to the
claim and will defend ourselves accordingly. The action is being coordinated
with over three hundred other nearly identical actions filed against other
companies before one judge in the U.S. District Court for the Southern District
of New York. No date has been set for any response to the complaint. We
understand from the staff of the Securities and Exchange Commission ("SEC")
that the SEC is conducting an investigation into issues similar to those
alleged in the class action complaint filed against us and numerous other
companies. In late 2001, the SEC indicated that it might request certain
information and documents from us in connection with that process, but to date,
we have not received any such requests. We note that the Company's lead
underwriter, CSFB, entered into a settlement agreement with the SEC and the
National Association of Securities Dealers in January 2002 which relates to
issues similar to those alleged in the class action complaint filed against us
and numerous other companies.

   From time to time, we may be involved in litigation incidental to the
conduct of our business. We are not currently party to any legal proceedings
that we expect to have a material adverse impact on our business.

Item 4. Submission of Matters to a Vote of Security Holders

   We did not submit any matter to a vote of our security holders during the
quarter ended December 31, 2001.

                                      11

<PAGE>

                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Price Range of Common Stock

   Our common stock is traded on the Nasdaq National Market under the symbol
"LNTE." Our common stock began trading on Nasdaq on February 11, 2000 in
connection with our initial public offering. The following table shows, for the
periods indicated, the high and low closing sale prices for our common stock,
as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
                                                           High   Low
                                                          ------ ------
         <S>                                              <C>    <C>
         Fiscal Year Ended December 31, 2000:
            First Quarter (commencing February 11, 2000). $80.50 $29.38
            Second Quarter...............................  32.56  14.75
            Third Quarter................................  26.38   4.13
            Fourth Quarter...............................   4.88   1.19
         Fiscal Year Ended December 31, 2001:
            First Quarter................................   3.28   1.38
            Second Quarter...............................   1.55   0.73
            Third Quarter................................   1.20   0.69
            Fourth Quarter...............................   1.21   0.61
</TABLE>

   On March 15, 2002, the last reported sale price of our common stock was
$0.94 per share and there were approximately 167 holders of record of our
common stock.

Dividends

   We did not declare or pay any cash dividends on our common stock in 2001 and
do not intend to pay any cash dividends in the foreseeable future. We plan to
retain any future earnings to finance the development and growth of our
business. Any future determination as to the payment of dividends will be made
by our board of directors and will depend on our results of operations,
financial condition, capital requirements and any other factors our board of
directors considers relevant.

   Prior to June 17, 1999, we were an S-corporation and paid out dividends to
compensate stockholders for their estimated tax liabilities. These dividends
totaled approximately $582,000 in 1999. In addition, on June 15, 1999, we
declared a dividend in conjunction with our conversion to a C-corporation
consisting of, in the aggregate, an undivided interest in approximately $2.5
million of our accounts receivable and $1.5 million in cash.

Use of Initial Public Offering Proceeds

   On February 10, 2000, our registration statement on Form S-1 (File No.
333-92373) relating to the initial public offering of our common stock was
declared effective by the SEC. After payment of underwriting discounts and
expenses of approximately $8.6 million, we received net proceeds of
approximately $83.4 million from the offering. We have invested the net
proceeds, pending its use for working capital and general corporate purposes,
in investment grade, interest-bearing securities. During the fiscal year ended
December 31, 2001, we used approximately $15.6 million of the proceeds of the
initial public offering for working capital and approximately $2.5 million for
purchases of leasehold improvements and equipment. During the fiscal year ended
December 31, 2000, we used approximately $12.2 million of the proceeds of the
initial public offering for working capital and approximately $12 million for
purchases of leasehold improvements and equipment.

                                      12

<PAGE>

Item 6. Selected Financial Data

   You should read the following selected consolidated financial data along
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and our consolidated financial statements and related notes
thereto included in this Annual Report on Form 10-K. We derived the
consolidated statement of operations data for the three-year period ended
December 31, 2001 and the consolidated balance sheet data as of December 31,
2000 and 2001 from our consolidated financial statements that have been audited
by PricewaterhouseCoopers LLP, independent accountants, and that are included
in this Annual Report on Form 10-K. We derived the consolidated statement of
operations data for the years ended December 31, 1997 and 1998 and the
consolidated balance sheet data as of December 31, 1997, 1998 and 1999 from our
audited consolidated financial statements that are not included in this Annual
Report on Form 10-K. Pro forma net income (loss) available to common
stockholders reflects an adjustment to show assumed federal and state income
taxes based on statutory (federal and state) tax rates for the periods
presented, during which we were treated as an S-corporation for income tax
purposes.

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                      ---------------------------------------------
                                                                       1997     1998     1999      2000      2001
                                                                      -------  -------  -------  --------  --------
                                                                          (In thousands, except per share data)
<S>                                                                   <C>      <C>      <C>      <C>       <C>
Statement of Operations Data:
Revenues............................................................. $11,134  $15,369  $32,964  $ 76,089  $ 41,927
Operating expenses:
   Professional services.............................................   6,175    7,001   17,477    44,080    28,181
   Selling, general and administrative...............................   4,722    6,803   18,104    53,821    30,762
   Amortization of deferred compensation.............................      --       --    1,188     2,541     2,788
   Restructuring charge..............................................      --       --       --     8,100    14,341
                                                                      -------  -------  -------  --------  --------
         Total operating expenses....................................  10,897   13,804   36,769   108,542    76,072
Income (loss) from operations........................................     237    1,565   (3,805)  (32,453)  (34,145)
Other (expense) income, net..........................................     (20)      (1)     792     5,157     3,484
Write-down of investments............................................      --       --       --    (3,851)       --
                                                                      -------  -------  -------  --------  --------
Income (loss) before income taxes....................................     217    1,564   (3,013)  (31,147)  (30,661)
Income tax (provision) benefit.......................................      (4)      (8)     431     9,939    11,467
                                                                      -------  -------  -------  --------  --------
Net income (loss).................................................... $   213  $ 1,556  $(2,582) $(21,208) $(19,194)
Net income (loss) available to common stockholders................... $   213  $ 1,556  $(3,559) $(21,442) $(19,194)
Pro forma net income (loss) available to common stockholders......... $   153  $   881  $(3,239)    nm        nm
Net income (loss) per share, basic and diluted....................... $  0.01  $  0.08  $ (0.16) $  (0.60) $  (0.49)
Pro forma net income (loss) per share, basic and diluted............. $  0.01  $  0.04  $ (0.15)    nm        nm
Weighted average number of shares outstanding, basic and diluted.....  20,167   20,607   22,204    35,798    38,960

                                                                                       December 31,
                                                                      ---------------------------------------------
                                                                       1997     1998     1999      2000      2001
                                                                      -------  -------  -------  --------  --------
                                                                                      (In thousands)
Balance Sheet Data:
Cash, cash equivalents and short-term and long-term investments...... $   850  $ 3,377  $13,692  $ 83,906  $ 64,540
Working capital......................................................     544    4,880   12,733    75,834    48,560
Total assets.........................................................   3,893    7,320   41,486   124,488    98,817
Long-term debt and redeemable preferred stock, net of current portion     350    2,660   27,733        --        --
Total stockholders' equity...........................................     797    2,915    1,235   102,932    84,206
</TABLE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

   You should read the following discussion along with our audited consolidated
financial statements and the related notes thereto included in this Annual
Report on Form 10-K. The following discussion contains forward-looking
statements that are subject to risks, uncertainties and assumptions, including
those discussed under "Business--Risk Factors" that could cause our actual
results, performance and achievements in 2002 and beyond to differ materially
from those expressed in, or implied by, these forward-looking statements. See
"Cautionary Note Regarding Forward-Looking Statements."

                                      13

<PAGE>

Overview

   Lante Corporation is a technology consulting company that helps Global 2000
clients leverage new technologies to build competitively superior businesses.
We customize core extended enterprise applications to provide customers with
new features to enable them to benefit from the trend toward information that
is more interactive, real-time, collaborative, extended and private. Over the
past several years, we have helped companies develop Internet-based
business-to-business connections to make business more efficient. As technology
continues to evolve, we are now building upon our extended enterprise focus by
utilizing new technologies to enhance the functionality of the applications we
provide to our clients. By developing highly interactive, executable
applications with extendibility to multiple platforms, we help our clients
interact more directly and effectively with their business partners.

   Our revenues consist of fees generated for professional services. We provide
services on a time and materials basis and fixed fee basis, including retainer
arrangements. During the year ended December 31, 2001, we derived substantially
all of our revenues from engagements on a time and materials basis, and we
expect a majority of revenues to be derived from time and materials engagements
in 2002. However, the Luminant acquisition increased our percentage of fixed
fee engagements during early 2002, and we may continue to enter into fixed fee
engagements where we believe we can adequately assess the time and expenses
necessary for the engagement.

   We have shifted our client base toward established companies during the past
two years. Virtually all of our revenues during 2001 were generated from Global
2000 companies. Obtaining engagements from larger enterprises involves a more
competitive bidding process and a longer sales cycle, which could continue to
negatively impact our results of operations. We maintain allowances for
potential credit losses and such losses have been within our expectations.

   Revenues from a few large clients have historically constituted a
significant portion of our total revenues in a particular quarter or year. For
the year ended December 31, 2001, our five largest clients accounted for 73% of
our revenues, which is an increase from 30% in 2000. Although we began work for
21 new clients in 2001, two of our clients, Aon Service Corporation and
Airborne Express, accounted for 39% and 12% of our revenues, respectively. We
do not expect to perform the same volume of work for either client in 2002.
Although the Luminant transaction expanded our client base, we continue to rely
heavily on a limited number of clients to generate a majority of our revenues.
Our reliance on a few clients magnifies collection risks and could adversely
impact our results if a significant client delays or terminates an engagement
with us.

   Costs of professional services consist of salaries, bonuses and benefits for
our billable professionals, the cost of subcontractors and other engagement
costs that are not reimbursed directly by the client. We use the term
"professional services margin" to mean revenues less costs of professional
services, stated as a percentage of revenues. Professional services margins may
be reduced in any given period to the extent that we experience a decline in
billing rates, use more subcontractors, utilize billable professionals at lower
than expected levels, defer revenues due to uncertainty of collections or are
unable to execute effectively. We expect the Luminant transaction to decrease
our professional services margin because many of the engagements we acquired in
that transaction involve lower realized rates than we have experienced in the
past. We expect that our professional services margins will vary from quarter
to quarter.

   Our employee headcount decreased from 476 on December 31, 2000, of which 347
were billable professionals, to 216 as of December 31, 2001, of which 163 were
billable professionals. The total headcount decrease during 2001 was primarily
due to our restructuring efforts and voluntary attrition. Following the
integration of Luminant assets and the resizing of the combined organization in
early 2002, we have approximately 170 billable employees and a total employee
base of approximately 230. Our total number of employees over the next three to
six months may fluctuate as we continue to balance our available resources with
the demand for our services.

                                      14

<PAGE>

   Selling, general and administrative expenses consist primarily of salaries,
bonuses and benefits for non-project personnel, facilities costs, staff
recruiting and training costs, depreciation and amortization, general operating
expenses and selling and marketing expenses. We expect the Luminant acquisition
to increase our selling, general and administrative expenses due to increased
costs associated with additional non-billable professionals, facilities costs
and depreciation and amortization. We largely develop new business through our
marketing programs and the efforts of our managing directors, principals and a
dedicated business development staff.

Critical Accounting Policies

   Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
the related disclosure of contingent assets and liabilities. We evaluate our
estimates on an on-going basis, based on historical experience and other
assumptions we believe to be relevant and reasonable under the circumstances.
Actual results may differ from these estimates under different assumptions and
conditions.

   We believe that judgments and estimates related to the following critical
accounting policies have the most significant effect on the preparation of our
consolidated financial statements.

  Revenue recognition on agreements to provide technology consulting services

   While most of our client projects are time and materials based, recognized
revenues and profits may still be subject to revisions as the project
progresses to completion and as estimates of revenues and costs change. We
recognize revenue and profit for fixed fee engagements as work progresses using
the percentage-of-completion method. Percentage-of-completion estimates are
generally based on the ratio of actual hours incurred to total estimated hours.
We follow this method because we believe that we can accurately estimate the
revenue and costs applicable to various stages of a client project. Revisions
in profit estimates are charged to income in the period in which the facts that
give rise to the revision become known. We maintain allowances for doubtful
accounts for estimated losses resulting from the inability of our customers to
make required payments or customers indicating their intention to dispute their
obligation to pay for contractual services we provided. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required, which
could adversely impact earnings for the relevant period.

  Estimates related to the restructuring charge and related accrual

   During 2000 and 2001, we recorded certain restructuring charges in
accordance with the applicable accounting rules. (A detailed description of the
terms of these restructurings is also contained in Note 5 to the consolidated
financial statements included as part of this Annual Report on Form 10-K.) At
the date we approve a restructuring plan, we establish a liability for the
estimated costs associated with that restructuring plan. At that time, and
thereafter until the plan activities are complete, we may not be able to
precisely estimate the actual costs associated with the plan. At the date we
prepare our financial statements, we use our judgment and information available
to us to reevaluate our initial estimate of the plan costs. If we believe that
our previous estimates are no longer accurate in light of current conditions,
we adjust the reserve with a corresponding increase or decrease to current
period earnings.

   Accrued restructuring costs as of December 31, 2001 reflect our estimate of
anticipated employee termination costs, future rental obligations and other
costs associated with office space that we do not plan to use in our operations
as a result of the restructuring plans. Such amounts are offset by our estimate
of sublease income for this space. While we know the terms of our contractual
lease obligations and related future commitments, we must estimate when and
under what terms we will be able to sublet the space, if at all. Such estimates
require a substantial amount of judgment, especially given current real estate
market conditions, and actual sublease terms may differ substantially from our
estimates. Any future changes in our estimates of lease termination reserves
could materially impact our financial condition, results of operations and cash
flows.

                                      15

<PAGE>

  Income taxes

   We use the asset and liability method of accounting for income taxes, under
which deferred income tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and net operating loss and tax credit carryforwards. We measure deferred
income tax assets and liabilities using enacted tax rates expected to apply to
taxable income in the years in which we expect those temporary differences to
be recovered or settled. The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date. Additionally, we are
required to assess the likelihood that our deferred tax assets will be
recovered from future taxable income. When we believe it is more likely than
not that we will be unable to utilize these assets to offset future income, we
establish a valuation allowance to reduce them to their estimated recoverable
amount. Any change in the valuation allowance may affect our financial
condition and results of operations.

   Other significant accounting policies, not involving the same level of
measurement uncertainties as those discussed above, are nevertheless important
to an understanding of our financial statements. These policies are important
to the portrayal of our financial condition and results, and require management
to make difficult, subjective and complex judgments. Critical accounting
policies cover accounting matters that are inherently uncertain because the
future resolution of such matters is unknown. (A detailed description of our
significant existing accounting policies is also contained in Note 2 to the
consolidated financial statements included as part of this Annual Report on
Form 10-K.)

Results of Operations

   The following table presents for the periods indicated, our selected
consolidated statement of operations data as a percentage of our revenues. For
all periods presented, we have derived these percentages from our audited
consolidated financial statements included in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                        Year Ended
                                                       December 31,
                                                     ---------------
                                                     1999  2000  2001
                                                     ----  ----  ----
          <S>                                        <C>   <C>   <C>
          Revenues.................................. 100%  100%  100%
          Operating expenses:
             Professional services..................  53    58    67
             Selling, general and administrative....  55    71    73
             Amortization of deferred compensation..   4     3     7
             Restructuring charge...................  --    11    34
                                                     ---   ---   ---
                    Total operating expenses........ 112   143   181
                                                     ---   ---   ---
          Loss from operations...................... (12)  (43)  (81)
          Other income, net.........................   3     7     8
          Write-down of investments.................  --    (5)   --
          Income tax benefit........................   1    13    27
                                                     ---   ---   ---
          Net loss..................................  (8)% (28)% (46)%
                                                     ===   ===   ===
</TABLE>

   We have historically generated a substantial amount of our revenues from
smaller start-up clients. Many of these clients encountered financial
difficulties due to the downturn in the Internet market and the general
economy. This resulted in a decrease in demand for Internet consulting
services. Therefore, we have been shifting our client base toward larger Global
2000 companies. Unfortunately, these larger prospective clients have longer
sales and contracting cycles, and the general economic slowdown has also caused
many of them to cancel, reduce and/or delay many projects resulting in our need
to reduce our workforce and incur substantial restructuring charges. In
addition, the current overcapacity in the Internet consulting services market,
together

                                      16

<PAGE>

with the use of less expensive overseas consultants, has caused many of our
competitors to lower their fees for services. All of these factors contributed
to an increase in our loss from operations for 2001 when compared to 2000.

Comparison of Years Ended December 31, 2001 and 2000

Revenues

   Revenues decreased $34.2 million, or 45%, to $41.9 million in 2001 from
$76.1 million in 2000. This decrease resulted from a reduction in the number of
client engagements and a decrease in our average realized billing rate, offset
by the recognition of $1.6 million of master service agreement revenues in the
fourth quarter of 2001, as described below. We generated revenues from one or
more projects for 33 clients in 2001 as compared to 66 clients in 2000. In
December 2001, we amended our master service agreement with Dell Products LP
(Dell), a wholly-owned subsidiary of Dell Computer Corporation. In conjunction
with modifying the agreement, Dell paid us $1.6 million in the fourth quarter
of 2001 by tendering 2 million shares of our common stock, which we retired
upon redemption. Subject to Dell's ability to make certain payments to us in
lieu of purchasing services, the revised agreement calls for Dell to purchase
$1 million of services from us in each of the next five quarters, beginning in
the first quarter of 2002.

Operating expenses

  Professional services

   Costs of professional services decreased $15.9 million, or 36%, to $28.2
million in 2001 from $44.1 million in 2000. This decrease was primarily due to
a decrease in the number of billable professionals from 347 at December 31,
2000 to 163 at December 31, 2001 and a $6.4 million decrease in sub-contractor
and non-billed project-related expenses in 2001. The decrease in the cost of
professional services was driven by lower demand for our services and our
resultant restructuring efforts during late 2000 and 2001. The decrease in
sub-contractor and non-billed project-related expenses resulted from a decrease
in client work.

   Our professional services margin decreased from 42% during the year ended
December 31, 2000 to 33% during the year ended December 31, 2001, primarily due
to decreased utilization of our billable professionals and a lower realized
billing rate in 2001. For the year ended December 31, 2000, utilization of our
billable professionals was 55% as compared to 43% for the year ended December
31, 2001. Our average realized billing rate decreased from $199 per hour in the
fourth quarter of 2000 to $175 per hour in the fourth quarter of 2001.

  Selling, general and administrative

   Selling, general and administrative expenses decreased $23.1 million, or
43%, to $30.8 million in 2001 from $53.8 million in 2000. This decrease
primarily resulted from a decrease in the number of non-billable professionals,
a reduction in facility costs due to consolidation of certain offices and the
reduction of various marketing initiatives. Our non-billable professionals
decreased from 129 at December 31, 2000 to 53 at December 31, 2001.

  Amortization of deferred compensation

   Amortization of deferred compensation was $2.8 million in 2001 compared to
$2.5 million in 2000.

  Restructuring charge

   During 2001, we approved restructuring plans that included the realignment
of our executive team, consolidation of certain facilities, and the reduction
of approximately 184 employees, including 132 billable professionals. We
recorded a special charge of approximately $14.3 million related to the
restructurings in 2001. This charge consisted of $5.7 million in lease
termination costs, $5.2 million in non-cash property and equipment write-downs
related to facility closures and $3.5 million in severance and other
termination costs. Depending on

                                      17

<PAGE>

our ability to successfully negotiate sublease or lease termination
arrangements on our abandoned lease obligations, the payments related to our
facility closures could continue into 2009.

Write-down of investments

   During the fourth quarter of 2000, we wrote down the value of certain
investments in clients by $3.9 million. We had no such write down during 2001.

Net loss

   Net loss for 2001 was $19.2 million compared to a net loss of $21.2 million
in 2000. The decrease in net loss primarily resulted from the absence of an
investment write-down, offset by a $1.7 million increase in loss from
operations. These were partially offset by a decrease in other income to $3.5
million in 2001 from $5.2 million in 2000 and an increase in the income tax
benefit to $11.5 million in 2001 from $9.9 million in 2000.

Comparison of Years Ended December 31, 2000 and 1999

Revenues

   Revenues increased $43.1 million, or 131%, to $76.1 million in 2000 from
$33.0 million in 1999. This increase resulted from an increase in the average
number and size of client engagements and an increase in average realized
billing rates. We generated revenues from one or more projects for 66 clients
in 2000 as compared to 55 clients in 1999. The revenue increases in 2000 were
limited by a general decrease in demand for Internet services in the third and
fourth quarters of 2000, increasing competition, and our inability to recognize
revenue from certain clients whose ability to pay was uncertain.

Operating expenses

  Professional services

   Costs of professional services increased $26.6 million, or 152%, to $44.1
million in 2000 from $17.5 million in 1999. This increase was primarily due to
an increase in the number of billable professionals from 242 at December 31,
1999 to 347 at December 31, 2000 and a $3.8 million increase in non-billed
project-related expenses.

   Our professional services margin decreased to 42% in 2000 from 47% in 1999,
primarily due to decreased utilization as well as revenue not recognized on
certain clients where their ability to pay was uncertain. Utilization in 2000
was 55% as compared to 60% in 1999.

  Selling, general and administrative

   Selling, general and administrative expenses increased $35.7 million, or
197%, to $53.8 million in 2000 from $18.1 million in 1999. This increase
primarily resulted from an increase in the number of non-billable field support
personnel, various marketing initiatives, our efforts to increase the number of
offices, improving infrastructure necessary for anticipated growth and the
establishment (and eventual closure) of operations in Singapore and New Delhi.
We also increased our bad debt expense by approximately $1.8 million in 2000
when compared to 1999 due to increased revenues and collection risk associated
with certain clients experiencing financing difficulties.

  Amortization of deferred compensation

   Amortization of deferred compensation was $2.5 million in 2000 compared to
$1.2 million in 1999. Deferred compensation was recorded in the later part of
1999 related to certain options that were deemed granted

                                      18

<PAGE>

in-the-money, a loan made to our chief executive officer that was recorded as
compensation expense, the sale of restricted shares to our chief executive
officer at a price that was deemed less than our common stock's fair value, and
deferred compensation related to one of our acquisitions.

  Restructuring charge

   In December 2000, we approved a restructuring plan that included the
realignment of our operations into two operating units, consolidation of
certain facilities, the closing of our Singapore and New Delhi offices and the
reduction of approximately 130 employees, including 95 billable professionals.
We recorded a special charge of $8.1 million related to the restructuring in
the fourth quarter of 2000. This charge consisted of $3.4 million in lease
termination costs, $2.4 million in non-cash property and equipment write-downs
related to facility closures, $1.8 million in severance and other termination
costs and $0.5 million in other restructuring costs.

Write-down of investments

   During the fourth quarter of 2000, we wrote down the value of certain
investments in clients by $3.9 million. Virtually all of this amount related to
143,000 shares of publicly-traded common stock that we obtained through an
option exercise in 2000. Although the carrying value of the option was
approximately $4.9 million prior to its exercise, during the fourth quarter of
2000 the fair market value of the underlying common stock declined
dramatically, which we deemed to be an other-than-temporary decline in market
value.

Net loss

   Net loss for 2000 was $21.2 million compared to net loss of $2.6 million in
1999. The increase in net loss resulted from increases in expenses that were
not commensurate with the increases in revenue, our $8.1 million restructuring
charge and a $3.9 million write-down of our investments in the fourth quarter
of 2000. These were partially offset by an increase in other income to $5.2
million in 2000 from $0.5 million in 1999 and an increase in income tax benefit
to $9.9 million in 2000 from $0.4 million in 1999.

Quarterly results

   The following table presents our unaudited quarterly data for the periods
indicated. We derived this data from our unaudited consolidated interim
financial statements, and, in our opinion, this data includes all necessary
adjustments, which consist only of normal recurring adjustments necessary to
present fairly the financial results for the periods. Our quarterly operating
results have varied significantly in the past and may continue to do so in the
future due to a number of factors, including, but not limited to, the number,
size and scope of client engagements, unanticipated changes in the scope,
delays, deferrals and/or cancellations of significant client engagements,
utilization rates, the extent to which we use subcontractors, realized hourly
billing rates, variability in market demand for Internet services and general
economic conditions. For example, while our five largest clients represented
73% of our revenues in 2001, we generated 89% of our revenues from our five
largest clients in the fourth quarter of 2001. We believe that our results for
any given quarter or series of quarters are not necessarily indicative of our
results that may be expected for any future period. However, our quarterly
operating results may represent trends that aid in understanding our business.

                                      19

<PAGE>

<TABLE>
<CAPTION>
                                                                         Quarter Ended
                                           ------------------------------------------------------------------------
                                           Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31,
                                             2000     2000     2000      2000     2001     2001     2001      2001
                                           -------- -------- --------- -------- -------- -------- --------- --------
                                                                         (In millions)
<S>                                        <C>      <C>      <C>       <C>      <C>      <C>      <C>       <C>
Statement of Operations Data:
Revenues..................................  $17.1    $23.6     $20.3    $ 15.0   $ 12.0   $ 10.2    $10.4    $ 9.3
Operating expenses:
   Professional services..................    9.1     12.0      12.0      10.9      9.0      7.5      6.5      5.2
   Selling, general and administrative....   10.3     13.1      16.4      14.0     10.6      8.8      6.4      5.0
   Amortization of deferred compensation..    0.6      0.7       0.6       0.6      0.7      0.7      0.7      0.7
   Restructuring charge...................     --       --        --       8.1      2.2      9.5       --      2.6
                                            -----    -----     -----    ------   ------   ------    -----    -----
      Total operating expenses............   20.0     25.8      29.0      33.6     22.5     26.5     13.6     13.5
                                            -----    -----     -----    ------   ------   ------    -----    -----
Loss from operations......................   (2.9)    (2.2)     (8.7)    (18.6)   (10.5)   (16.3)    (3.2)    (4.2)
Other income, net.........................    0.9      1.5       1.5       1.3      1.4      0.9      0.7      0.5
Write-down of investments.................     --       --        --      (3.9)      --       --       --       --
Income tax benefit........................    0.6       --       2.1       7.2      3.3      5.8      0.9      1.5
                                            -----    -----     -----    ------   ------   ------    -----    -----
Net loss..................................  $(1.4)   $(0.7)    $(5.1)   $(14.0)  $ (5.8)  $ (9.6)   $(1.6)   $(2.2)
                                            =====    =====     =====    ======   ======   ======    =====    =====
</TABLE>

   Our quarterly revenues decreased through most of 2001 primarily due to
decreased market demand and downward pressure on our realized billing rate. The
costs of professional services decreased quarterly during 2001 as a result of
our restructuring efforts related to the reduction of billable professionals.
Selling, general and administrative expenses during 2001 decreased as a result
of restructuring efforts related to the consolidation of office space combined
with the reduction of non-billable professionals. The restructuring charges
during 2000 and 2001 relate to our continued effort to adjust our cost
structure commensurate with the decrease in demand for our services. The
majority of other income represents interest income associated with our cash
and investment balances. The decrease during 2001 is consistent with the
decrease in market interest rates and our declining cash balance.

Liquidity and Capital Resources

   During 2001, we financed our operations and investments in property and
equipment primarily through cash, cash equivalents and investments on-hand.

   Cash, cash equivalents, and short-term and long-term investments decreased
to $64.5 million at December 31, 2001 from $83.9 million at December 31, 2000.
This decrease is the result of cash used for operating activities of
approximately $15.6 million, capital expenditures of $2.5 million and the $3.0
million payment of a note payable to a former stockholder. Such decreases were
offset by $1.4 million of cash proceeds from the sale of an investment and $0.3
million from the exercise of Company stock options by employees.

   We have a $3.5 million line of credit. The annual interest rate on amounts
borrowed under the line of credit is calculated using the lender's "index
rate," which was 4.75% at December 31, 2001. As of December 31, 2001, the
lender waived our compliance with one of the debt service ratio requirements of
the facility. There were no borrowings under the facility during 2000 or 2001.
The $3.5 million line of credit expires on April 1, 2002, however, we
anticipate that the credit line will be renewed.

   As of December 31, 2001, remaining cash outflow under the restructuring
plans is expected to be approximately $7.6 million, of which $3.9 million is
expected to be disbursed during 2002. The balance is expected to be paid out
over the following seven years. The timing of these payments may be accelerated
if we are able to negotiate favorable lease buy-out arrangements or subleases.

   In January 2002 we acquired certain assets of Luminant Worldwide
Corporation, a Texas-based firm providing electronic commerce professional
services. The total purchase price was $6.8 million, consisting of a $5.2
million cash purchase price, $1.0 million for certain purchased account
receivable balances (consisting of $2.6 million of receivables purchased less
$1.6 million of receivables collected by Luminant before we were

                                      20

<PAGE>

obligated to pay for all receivables), and $0.6 million of transaction costs
and assumed liabilities. As part of this acquisition we hired professionals
associated with practices in Dallas, Houston and New York. Despite the
acquisition, we have experienced lower than expected revenue growth during the
first quarter of 2002. We have taken steps to further reduce our cost structure
by reducing our overall workforce in certain locations where our capacity was
in excess of the current demand for our services.

   We anticipate that our capital expenditures for 2002 will be between $2.0
million and $4.0 million, as we continue to support the infrastructure
necessary to maintain our operations, exclusive of the expenditures we incurred
in connection with the Luminant acquisition. We may also attempt to expand our
solutions and service offerings and gain access to new markets through
acquisitions, but we have not included any expenses related to acquisitions in
our description of expected capital expenditures. In addition, we do not have
any agreements, commitments or understandings with respect to any material
acquisitions.

   We believe that the cash provided from operations and cash on hand will be
sufficient to meet our anticipated working capital and capital expenditure
requirements through December 31, 2002.

Outlook

   Although we expect our revenues for the three months ending March 31, 2002
to be approximately $7.5 million, we expect revenues to increase later in 2002.
As a result of our restructuring efforts and the expenses associated with the
Luminant acquisition, we expect our expenses for the first quarter of 2002 to
be above the level in the previous quarter, and we expect to report an
operating loss for the quarter ending March 31, 2002.

   Our restructuring activity during 2000 and 2001 reduced our quarterly cost
structure of professional services and selling, general and administrative
expense to approximately $10.0 million. The Luminant transaction consummated on
January 8, 2002 increased our quarterly cost structure by approximately $3.0
million to a total of $13.0 million. However, we expect that as a result of
additional cost reduction measures taken late in the first quarter of 2002, our
ongoing quarterly cost structure will be approximately $10.0 million.

Recently Issued Accounting Standards

   In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). SFAS 141 requires business combinations
initiated after June 30, 2001 to be accounted for using the purchase method of
accounting. SFAS 142 addresses the recognition and measurement of goodwill and
other intangible assets subsequent to their acquisition. This statement
requires that intangible assets with finite useful lives be amortized and
intangible assets with indefinite lives and goodwill no longer be amortized,
but instead be tested for impairment at least annually. We do not anticipate
that the adoption of SFAS Nos. 141 and 142 will have a material effect on our
existing assets as of December 31, 2001. We will account for our purchase of
certain Luminant Worldwide Corporation assets pursuant to SFAS 141 and SFAS
142. As a result, approximately $3.0 million of the $6.8 million purchase price
will be allocated to goodwill and assembled workforce and, as a result, will
not be amortized.

   In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which is effective
for fiscal years beginning after December 15, 2001. SFAS 144 addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets and supercedes SFAS No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" while retaining many of the
provisions of that statement. We do not expect the adoption of SFAS 144 to have
a material impact on our financial position or results of operations.

   In February 2002, the FASB issued EITF D-103, "Income Statement
Characterization of Reimbursements Received for Out-of-Pocket Expenses
Incurred" ("EITF D-103"), which is effective for fiscal years beginning after
December 15, 2001. EITF D-103 addresses the change in reporting requirements
for reimbursable expenses

                                      21

<PAGE>

related to the delivery of services. We expect that the adoption of this new
guidance in the first quarter of 2002 will cause our recorded revenues to
increase and will also correspondingly increase our professional services
expense, which will result in no change to our professional service margin. We
will restate prior periods in accordance with EITF D-103 to provide
comparability.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

   Our primary financial instruments are cash in banks, government and
corporate debt securities and commercial paper. We do not believe that these
instruments are subject to material potential near-term losses in future
earnings from reasonably possible near-term changes in market rates or prices.
We do not invest in derivative financial instruments for speculative or trading
purposes.

Item 8. Financial Statements and Supplementary Data

   The financial statements and financial statement schedule, with the report
of independent accountants, listed in Item 14 are included in this Annual
Report on Form 10-K and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

   None.

                                      22

<PAGE>

                                   PART III

Item 10. Directors and Executive Officers of the Registrant

   The information provided in response to this item will be contained in our
2002 Annual Meeting definitive proxy statement under the headings "Election of
Directors" and "Executive Officers" and is incorporated herein by reference.

Item 11. Executive Compensation

   The information provided in response to this item will be contained in our
2002 Annual Meeting definitive proxy statement under the heading "Executive
Compensation" and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

   The information provided in response to this item will be contained in our
2002 Annual Meeting definitive proxy statement under the heading "Security
Ownership of Management and Principal Stockholders" and is incorporated herein
by reference.

Item 13. Certain Relationships and Related Transactions

   The information provided in response to this item will be contained in the
2002 Annual Meeting definitive proxy statement under the heading "Certain
Relationships and Related Transactions" and is incorporated herein by reference.

                                      23

<PAGE>

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

   (a) 1. Financial Statements

       We have filed the following financial statements, with the report of
       independent accountants, as part of this Annual Report on Form 10-K:

          Report of PricewaterhouseCoopers LLP, Independent Accountants.

          Consolidated Statements of Operations for the Years Ended December
          31, 1999, 2000 and 2001.

          Consolidated Balance Sheets as of December 31, 2000 and 2001.

          Consolidated Statements of Stockholders' Equity for the Years Ended
       December 31, 1999, 2000 and 2001.

          Consolidated Statements of Cash Flows for the Years Ended December
          31, 1999, 2000 and 2001.

       2. Financial Statement Schedules

       We have filed the following financial statement schedule as part of this
       Annual Report on Form 10-K:

          Schedule II--Valuation and Qualifying Accounts

       3. Exhibits--See Index on pages 26 through 27 of this Annual Report on
       Form 10-K.

   (b) Reports on Form 8-K

       On December 9, 2001, we reported to the Securities and Exchange
       Commission under Item 5, Other Events, that we had entered into an Asset
       Purchase Agreement with Luminant Worldwide Corporation.

                                      24

<PAGE>

                                  SIGNATURES

   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 the 1st day of
April 2002.

                                          LANTE CORPORATION

                                                  /S/  C. RUDY PURYEAR
                                          By ________________________________
                                              C. Rudy Puryear, Chief Executive
                                                   Officer and President

   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 indicated on the 1st day of April 2002.

          Signature                       Title
          ---------                       -----
     /S/  JOHN C. KRAFT       Chairman of the Board of
----------------------------- Directors
        John C. Kraft
    /S/  C. RUDY PURYEAR      Chief Executive Officer,
----------------------------- President and Director
       C. Rudy Puryear        (Principal Executive Officer)
    /S/  WILLIAM J. DAVIS     Chief Financial Officer
----------------------------- (Principal Financial and
      William J. Davis        Accounting Officer)
    /S/  PAUL D. CARBERY      Director
-----------------------------
       Paul D. Carbery
     /S/  JAMES E. COWIE      Director
-----------------------------
       James E. Cowie
    /S/  JUDITH HAMILTON      Director
-----------------------------
       Judith Hamilton
      /S/  JOHN LANDRY        Director
-----------------------------
         John Landry
     /S/  JOHN R. OLTMAN      Director
-----------------------------
       John R. Oltman
     /S/  MARK A. TEBBE       Director
-----------------------------
        Mark A. Tebbe
    /S/  PAUL G. YOVOVICH     Director
-----------------------------
      Paul G. Yovovich

                                      25

<PAGE>

                     INDEX TO EXHIBITS--LANTE CORPORATION

                         COMMISSION FILE NO. 00-28785

<TABLE>
<CAPTION>
Exhibit  Note
Number  Number                                         Exhibit
------- ------                                         -------
<C>     <C>    <S>
 3.1      (1)  Amended and Restated Certificate of Incorporation of the Registrant

 3.2     (10)  Amended and Restated By-laws of the Registrant

10.1*     (3)  Registrant's Amended and Restated 1998 Stock Option Plan

10.2*     (3)  Form of Option Agreement pursuant to Registrant's Amended and Restated 1998 Stock
               Option Plan

10.3*     (1)  Form of Indemnification Agreement for Executive Officers and Directors

10.4      (1)  Registration Rights Agreement dated June 17, 1999

10.5      (1)  Software License and Services Agreement between Evolve Software, Inc. and Registrant
               dated September 3, 1999

10.6*     (1)  Employment, Confidentiality and Noncompete Agreement between Registrant and Mark
               A. Tebbe

10.6.1*   (5)  First Amendment to Employment, Confidentiality and Noncompete Agreement dated
               June 1, 2001 between Registrant and Mark A. Tebbe

10.7*     (1)  Employment Agreement between Registrant and C. Rudy Puryear dated as of June 16,
               1999

10.7.1*  (10)  Stock Purchase and Amendment Agreement between Registrant and C. Rudy Puryear
               dated as of January 21, 2002

10.8*     (1)  Promissory Note in the amount of $2,500,000 by C. Rudy Puryear to the Registrant, dated
               June 30, 1999

10.9*    (10)  Promissory Note in the amount of $544,920 by C. Rudy Puryear to the Registrant, dated
               January 21, 2002

10.10     (1)  Amended and Restated Loan and Security Agreement between Registrant and Old Kent
               Bank, dated December 29, 1998, as amended on June 15, 1999

10.10.1   (7)  Amendment to Amended and Restated Loan and Security Agreement between Registrant
               and Old Kent Bank, dated January 1, 2001

10.11     (1)  Common Stock Purchase Agreement between Registrant and certain stockholders

10.12     (1)  Master Service Agreement between Registrant and Dell Products, L.P. dated as of
               December 7, 1999

10.12.1  (10)  Amendment One to Master Services Agreement between Registrant and Dell Products
               L.P. dated December 27, 2001.

10.13*    (4)  Form of Employment Agreement between Registrant and certain Executive Officers of
               the Registrant

10.14*    (6)  Amended and Restated Employment Agreement dated August 13, 2001 between
               Registrant and William J. Davis

10.15*    (6)  Amended and Restated Employment Agreement dated August 13, 2001 between
               Registrant and Marvin Richardson

10.16*    (8)  Registrant's 2001 Stock Option Plan
</TABLE>

                                      26

<PAGE>

<TABLE>
<CAPTION>
Exhibit   Note
Number   Number                                    Exhibit
-------- ------                                    -------
<C>      <C>    <S>
10.16.1*   (8)  Form of Option Agreement pursuant to Registrant's 2001 Stock Option Plan

10.17      (9)  Amended and Restated Asset Purchase Agreement between Registrant and Luminant
                Worldwide Corporation

21        (10)  Subsidiaries of Registrant

23        (10)  Consent of PricewaterhouseCoopers LLP
</TABLE>
--------
   *Management contract or compensatory plan or arrangement required to be
    filed as an exhibit to this Annual Report on Form 10-K.
 (1) Previously filed as an exhibit to the Registrant's Registration Statement
     on Form S-1 (File No. 333-92373), initially filed with the SEC on December
     8, 1999, as amended, and incorporated herein by reference.
 (2) Previously filed with the Commission on May 15, 2001 as an exhibit to the
     Registrant's Form 10-Q for the period ended March 31, 2001 and
     incorporated herein by reference.
 (3) Previously filed as an exhibit to the Registrant's Tender Offer Statement
     on Schedule TO, initially filed with the SEC on December 20, 2000, as
     amended, and incorporated herein by reference.
 (4) Previously filed with the Commission on May 15, 2000 as an exhibit to the
     Registrant's Form 10-Q for the period ended March 31, 2000 and
     incorporated herein by reference.
 (5) Previously filed with the Commission on August 10, 2001 as an exhibit to
     the Registrant's Form 10-Q for the period ended June 30, 2001 and
     incorporated herein by reference.
 (6) Previously filed with the Commission on November 14, 2001 as an exhibit to
     the Registrant's Form 10-Q for the period ended September 30, 2001 and
     incorporated herein by reference.
 (7) Previously filed with the Commission on April 2, 2001 as an exhibit to
     Registrant's Form 10-K for the fiscal year ended December 31, 2000 and
     incorporated herein by reference.
 (8) Previously filed with the Commission on July 2, 2001 as an exhibit to
     Registrant's Form S-8 and incorporated herein by reference.
 (9) Previously filed with the Commission on January 22, 2002 as an exhibit to
     Registrant's Form 8-K and incorporated herein by reference.
(10) Filed as an exhibit hereto.

                                      27

<PAGE>

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                  Page
                                                                  ----
          <S>                                                     <C>
          Consolidated Financial Statements of Lante Corporation:

             Report of Independent Accountants................... F-2

             Consolidated Statements of Operations............... F-3

             Consolidated Balance Sheets......................... F-4

             Consolidated Statements of Stockholders' Equity..... F-5

             Consolidated Statements of Cash Flows............... F-6

             Notes to Consolidated Financial Statements.......... F-7
</TABLE>

                                      F-1

<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
  Stockholders of Lante Corporation

   In our opinion, the consolidated financial statements listed in the index
appearing under item 14(a)(1) on page 24 present fairly, in all material
respects, the financial position of Lante Corporation and its subsidiaries at
December 31, 2000 and 2001, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule
listed in the index appearing under item 14(a)(2) on page 24 presents fairly,
in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
January 23, 2002

                                      F-2

<PAGE>

                               LANTE CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                                  ---------------------------
                                                                   1999      2000      2001
                                                                  -------  --------  --------
<S>                                                               <C>      <C>       <C>
Revenues......................................................... $23,078  $ 76,089  $ 40,287
Related party revenues...........................................   9,886        --        --
Master service agreement fulfillment revenues....................      --        --     1,640
                                                                  -------  --------  --------
       Total revenues............................................  32,964    76,089    41,927
                                                                  -------  --------  --------
Operating expenses:
   Professional services.........................................  17,477    44,080    28,181
   Selling, general and administrative...........................  18,104    53,821    30,762
   Amortization of deferred compensation.........................   1,188     2,541     2,788
   Restructuring charges.........................................      --     8,100    14,341
                                                                  -------  --------  --------
       Total operating expenses..................................  36,769   108,542    76,072
                                                                  -------  --------  --------
Loss from operations.............................................  (3,805)  (32,453)  (34,145)
Other income, net................................................     792     5,157     3,484
Write-down of investments........................................      --    (3,851)       --
                                                                  -------  --------  --------
Loss before income taxes.........................................  (3,013)  (31,147)  (30,661)
Income tax benefit...............................................     431     9,939    11,467
                                                                  -------  --------  --------
Net loss.........................................................  (2,582)  (21,208)  (19,194)
Dividends and accretion on mandatorily redeemable preferred stock    (977)     (234)       --
                                                                  -------  --------  --------
Net loss available to common stockholders........................ $(3,559) $(21,442) $(19,194)
                                                                  =======  ========  ========
Net loss per common share, basic and diluted..................... $ (0.16) $  (0.60) $  (0.49)
Unaudited pro forma net loss per common share, basic and diluted. $ (0.15)       nm        nm
Basic and diluted weighted average shares outstanding............  22,204    35,798    38,960
</TABLE>



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

                                      F-3

<PAGE>

                               LANTE CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                       December 31,
                                                                                    ------------------
                                                                                      2000      2001
                                                                                    --------  --------
<S>                                                                                 <C>       <C>
                                      ASSETS

Current assets:
   Cash and cash equivalents....................................................... $ 27,875  $ 28,917
   Short-term investments..........................................................   56,031    28,283
   Trade accounts receivable (net of allowance of $2,013 and $374 at December 31,
     2000 and 2001, respectively)..................................................   10,665     2,796
   Current deferred income taxes...................................................    1,768     2,224
   Other current assets............................................................      760       857
                                                                                    --------  --------
       Total current assets........................................................   97,099    63,077
Property and equipment, net........................................................   13,490     6,347
Noncurrent deferred income taxes...................................................   10,797    21,711
Long-term investments..............................................................       --     7,340
Other assets.......................................................................    3,102       342
                                                                                    --------  --------
       Total assets................................................................ $124,488  $ 98,817
                                                                                    ========  ========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable................................................................ $  4,709  $  3,399
   Accrued compensation and related costs..........................................    5,220     3,335
   Deferred revenues...............................................................    3,322       143
   Accrued restructuring costs.....................................................    4,695     7,640
   Current portion of note payable--redeemed shares................................    3,008        --
   Other current liabilities.......................................................      311        --
                                                                                    --------  --------
       Total current liabilities...................................................   21,265    14,517
Other liabilities..................................................................      291       274
                                                                                    --------  --------
       Total liabilities...........................................................   21,556    14,791
                                                                                    --------  --------
Commitments and contingencies......................................................       --        --
Stockholders' equity:
   Preferred stock, $0.01 par value; 10,000 shares authorized, 4,243 allocated to
     Series A convertible preferred stock, no shares issued and outstanding as of
     December 31, 2000 and 2001....................................................       --        --
   Common stock, $0.01 par value; 150,000 shares authorized, 40,150 shares issued
     and outstanding as of December 31, 2000, 38,912 shares issued and outstanding
     as of December 31, 2001.......................................................      401       389
   Additional paid in capital......................................................  139,940   138,483
   Retained deficit................................................................  (30,814)  (50,008)
   Deferred compensation...........................................................   (3,107)   (1,177)
   Note receivable--stockholder....................................................   (3,488)   (3,661)
                                                                                    --------  --------
       Total stockholders' equity..................................................  102,932    84,026
                                                                                    --------  --------
       Total liabilities and stockholders' equity.................................. $124,488  $ 98,817
                                                                                    ========  ========
</TABLE>

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

                                      F-4

<PAGE>

                               LANTE CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                (In thousands)

<TABLE>
<CAPTION>
                                                           Shares                 Par Value
                                                  ------------------------  ---------------------  Additional Retained
                                                           Class    Class                           Paid In   Earnings
                                                  Common     A        B     Common Class A Class B  Capital   (Deficit)
                                                  ------  -------  -------  ------ ------- ------- ---------- ---------
<S>                                               <C>     <C>      <C>      <C>    <C>     <C>     <C>        <C>
Balance at December 31, 1998.....................     --   10,191   12,291     --   $ 102   $ 123   $    577  $  2,113
Conversion of Class A and Class B common stock to
 one class of common shares...................... 22,481  (10,191) (12,291)  $225    (102)   (123)        --        --
Redemption of common stock....................... (4,460)      --       --    (45)     --      --     (4,916)   (4,567)
Issuance of common stock.........................  3,640       --       --     36      --      --     10,399        --
Conversion of debt to common stock...............  2,700       --       --     27      --      --      2,667        --
Exercise of stock options........................  1,708       --       --     17      --      --        387        --
Preferred stock dividends and accretion..........     --       --       --     --      --      --       (977)       --
Deferred compensation............................     --       --       --     --      --      --      5,190        --
Amortization of deferred compensation............     --       --       --     --      --      --         --        --
Issuance of options and warrants.................     --       --       --     --      --      --      1,258        --
Stock committed to Lante Foundation..............     --       --       --     --      --      --      3,360        --
Income tax benefit from exercise of stock options     --       --       --     --      --      --        564        --
Net loss.........................................     --       --       --     --      --      --         --    (2,582)
Dividends........................................     --       --       --     --      --      --         --    (4,570)
                                                  ------  -------  -------   ----   -----   -----   --------  --------
Balance at December 31, 1999..................... 26,069       --       --    260      --      --     18,509    (9,606)
Redemption of common stock.......................     (1)      --       --     --      --      --        (10)       --
Issuance of common stock.........................  1,000       --       --     10      --      --     10,990        --
Exercise of stock options and warrants...........  1,074       --       --     11      --      --        331        --
Preferred stock dividends and accretion..........     --       --       --     --      --      --       (234)       --
Conversion of preferred stock into common stock..  7,072       --       --     71      --      --     25,891        --
Amortization of deferred compensation............     --       --       --     --      --      --         --        --
Initial public offering of common stock..........  4,600       --       --     46      --      --     83,331        --
Issuance of stock to Lante Foundation............    336       --       --      3      --      --         (3)       --
Forfeiture of stock options......................     --       --       --     --      --      --       (298)       --
Accrued interest on note receivable..............     --       --       --     --      --      --         --        --
Cumulative translation adjustment................     --       --       --     --      --      --        (23)       --
Income tax benefit from exercise of stock options     --       --       --     --      --      --      1,456        --
Net loss.........................................     --       --       --     --      --      --         --   (21,208)
                                                  ------  -------  -------   ----   -----   -----   --------  --------
Balance at December 31, 2000..................... 40,150       --       --    401      --      --    139,940   (30,814)
Redemption of common stock....................... (2,000)      --       --    (20)     --      --     (1,620)       --
Exercise of stock options and warrants...........    203       --       --      2      --      --         76        --
Employee Stock Purchase Plan.....................    559       --       --      6      --      --        479        --
Issuance of advisor options......................     --       --       --     --      --      --         43        --
Forfeiture of stock options......................     --       --       --     --      --      --       (518)       --
Amortization of deferred compensation............     --       --       --     --      --      --         --        --
Accrued interest on note receivable..............     --       --       --     --      --      --         --        --
Cumulative translation adjustment................     --       --       --     --      --      --         83        --
Net loss.........................................     --       --       --     --      --      --         --   (19,194)
                                                  ------  -------  -------   ----   -----   -----   --------  --------
Balance at December 31, 2001..................... 38,912       --       --   $389   $  --   $  --   $138,483  $(50,008)
                                                  ======  =======  =======   ====   =====   =====   ========  ========
</TABLE>
<TABLE>
<CAPTION>

                                                                   Note         Total
                                                    Deferred   Receivable-- Stockholders'
                                                  Compensation Stockholder     Equity
                                                  ------------ ------------ -------------
<S>                                               <C>          <C>          <C>
Balance at December 31, 1998.....................        --           --      $  2,915
Conversion of Class A and Class B common stock to
 one class of common shares......................        --           --            --
Redemption of common stock.......................        --           --        (9,528)
Issuance of common stock.........................        --      $(3,315)        7,120
Conversion of debt to common stock...............        --           --         2,694
Exercise of stock options........................        --           --           404
Preferred stock dividends and accretion..........        --           --          (977)
Deferred compensation............................   $(5,190)          --            --
Amortization of deferred compensation............       577           --           577
Issuance of options and warrants.................        --           --         1,258
Stock committed to Lante Foundation..............        --           --         3,360
Income tax benefit from exercise of stock options        --           --           564
Net loss.........................................        --           --        (2,582)
Dividends........................................        --           --        (4,570)
                                                    -------      -------      --------
Balance at December 31, 1999.....................    (4,613)      (3,315)        1,235
Redemption of common stock.......................        --           --           (10)
Issuance of common stock.........................        --           --        11,000
Exercise of stock options and warrants...........        --           --           342
Preferred stock dividends and accretion..........        --           --          (234)
Conversion of preferred stock into common stock..        --           --        25,962
Amortization of deferred compensation............     1,208           --         1,208
Initial public offering of common stock..........        --           --        83,377
Issuance of stock to Lante Foundation............        --           --            --
Forfeiture of stock options......................       298           --            --
Accrued interest on note receivable..............        --         (173)         (173)
Cumulative translation adjustment................        --           --           (23)
Income tax benefit from exercise of stock options        --           --         1,456
Net loss.........................................        --           --       (21,208)
                                                    -------      -------      --------
Balance at December 31, 2000.....................    (3,107)      (3,488)      102,932
Redemption of common stock.......................        --           --        (1,640)
Exercise of stock options and warrants...........        --           --            78
Employee Stock Purchase Plan.....................        --           --           485
Issuance of advisor options......................       (43)          --            --
Forfeiture of stock options......................       312           --          (206)
Amortization of deferred compensation............     1,661           --         1,661
Accrued interest on note receivable..............        --         (173)         (173)
Cumulative translation adjustment................        --           --            83
Net loss.........................................        --           --       (19,194)
                                                    -------      -------      --------
Balance at December 31, 2001.....................   $(1,177)     $(3,661)     $ 84,026
                                                    =======      =======      ========
</TABLE>

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

                                      F-5

<PAGE>

                               LANTE CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                (In thousands)

<TABLE>
<CAPTION>
                                                                                                   Year ended December 31,
                                                                                                 ---------------------------
                                                                                                  1999      2000      2001
                                                                                                 -------  --------  --------
<S>                                                                                              <C>      <C>       <C>
Cash flows from operating activities:
    Net loss.................................................................................... $(2,582) $(21,208) $(19,194)
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:...
       Depreciation.............................................................................     645     3,067     3,833
       Deferred income taxes....................................................................    (508)  (11,493)  (11,370)
       Option issued to ZixIt Corporation.......................................................   1,258        --        --
       Option received from ZixIt Corporation...................................................  (4,902)       --        --
       Amortization of deferred compensation....................................................   1,188     2,541     2,788
       Charitable contribution of company stock.................................................   3,360        --        --
       Master service agreement fulfillment revenues............................................      --        --    (1,640)
       Non-cash portion of restructuring charges................................................      --     2,422     5,192
       Write-down of investments................................................................      --     3,851        --
       Income tax benefit related to exercised stock options....................................      --     1,456        --
       Other, net...............................................................................     (37)     (112)     (174)
       Increase (decrease) in cash attributable to changes in assets and liabilities:
          Trade accounts receivable.............................................................  (7,107)     (316)    7,869
          Other current assets..................................................................    (504)     (153)      (97)
          Other assets..........................................................................  (3,882)     (220)      152
          Accounts payable......................................................................   5,349       (85)   (1,310)
          Accrued restructuring costs...........................................................      --     4,695     3,642
          Accrued compensation and related costs................................................   2,226     2,069    (1,885)
          Deferred revenues.....................................................................   2,093     1,167    (3,179)
          Other liabilities.....................................................................      15       110      (199)
                                                                                                 -------  --------  --------
             Net cash used in operating activities..............................................  (3,388)  (12,209)  (15,572)
                                                                                                 -------  --------  --------
Cash flows from investing activities:
    Capital expenditures........................................................................  (6,157)  (12,013)   (2,533)
    Sales (purchases) of short-term and long-term investments...................................      --   (56,031)   20,408
    Other.......................................................................................    (426)     (250)    1,394
                                                                                                 -------  --------  --------
             Net cash provided by (used in) investing activities................................  (6,583)  (68,294)   19,269
                                                                                                 -------  --------  --------
Cash flows from financing activities:
    Proceeds from initial public offering of common stock, net..................................      --    83,377        --
    Proceeds from private issuances of common stock, net........................................   9,878    11,000        --
    Proceeds from issuance of mandatorily redeemable preferred stock, net.......................  24,751        --        --
    Redemption of common stock..................................................................  (6,521)       --        --
    Payments on note payable to stockholder.....................................................      --        --    (3,008)
    Loan to executive officer...................................................................  (3,228)       --        --
    Dividends paid..............................................................................  (4,570)       --        --
    Other, net..................................................................................     (24)      309       353
                                                                                                 -------  --------  --------
             Net cash provided by (used in) financing activities................................  20,286    94,686    (2,655)
                                                                                                 -------  --------  --------
Net increase in cash and cash equivalents....................................................... $10,315  $ 14,183  $  1,042
Cash and cash equivalents, beginning of period.................................................. $ 3,377  $ 13,692  $ 27,875
Cash and cash equivalents, end of period........................................................ $13,692  $ 27,875  $ 28,917
Supplemental disclosure of cash flow information:
    Cash paid for interest...................................................................... $    82  $     75  $    298
                                                                                                 =======  ========  ========
    Cash paid for taxes......................................................................... $   408  $    100  $      8
                                                                                                 =======  ========  ========
Supplemental disclosure of non-cash transaction:
    Conversion of Series A convertible preferred stock to common stock..........................      --  $ 25,962        --
                                                                                                 =======  ========  ========
</TABLE>

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

                                      F-6

<PAGE>

                               LANTE CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (In thousands, except per share data)

1. Nature of Business

   Lante Corporation (the "Company"), a Delaware corporation, is a technology
consulting company that helps Global 2000 clients leverage new technologies to
build competitively superior businesses. The Company customizes core extended
enterprise applications to provide clients with new features to enable them to
benefit from the trend toward information that is more interactive, real-time,
collaborative, extended and private. Over the past several years, the Company
has helped companies develop Internet-based business-to-business connections to
make business more efficient. As technology continues to evolve, the Company is
now building upon its extended enterprise focus by utilizing new technologies
to enhance the functionality of the applications provided to its clients.

2. Summary of Significant Accounting Policies

  Principles of Consolidation

   The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries after elimination of all significant
intercompany accounts and transactions.

  Revenue Recognition

   Revenues from time and materials engagements are recognized as services are
provided. Revenues from fixed-fee engagements are recognized on the
percentage-of-completion method of accounting, based on the hours incurred
compared to total estimated hours. Anticipated losses on engagements, if any,
are charged to earnings when identified.

   Unbilled revenues on engagements consist of revenues recognized in excess of
billings and deferred revenues consist of billings or cash received in excess
of revenues recognized.

  Cash and Cash Equivalents

   Cash and cash equivalents consist of cash and overnight investments and
investment-grade commercial paper with original maturities of three months or
less and whose carrying amount approximates market value.

  Short-Term and Long-Term Investments

   In accordance with the Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity Securities,"
the Company has categorized its marketable debt securities as
"held-to-maturity" and they are carried at their amortized costs. The Company's
short-term and long-term investments consist of commercial paper, U.S. Treasury
instruments and corporate bonds. Investments with remaining maturities greater
than twelve months are classified as long-term. During 2000 approximately
$34,896 of investments were sold prior to their maturity due to unforeseen
exposure related to the Investment Company Act of 1940. During 2001,
approximately $1,498 of investments were sold prior to their original maturity
due to significant deterioration in the issuer's credit worthiness. During the
years ended December 31, 2000 and 2001, realized and unrealized gains and
losses were not material.

  Property and Equipment

   Property and equipment are stated at cost, net of accumulated depreciation
and amortization. Expenditures for renewals and improvements that significantly
extend the useful life of an asset are capitalized. Expenditures for
maintenance and repairs are charged to operations as incurred. Depreciation and
amortization are computed

                                      F-7

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)

using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are amortized over the lesser of the estimated useful
lives of the assets or the remaining lease term. The estimated useful lives are
as follows:

<TABLE>
             <S>                                          <C>
             Computers, computer peripherals and software 3-5 years
             Office machines and equipment............... 5-7 years
             Furniture and fixtures......................  10 years
</TABLE>

   The Company reviews the carrying values of long-lived assets for impairment
when events or changes in circumstances indicate that the carrying amount of
the assets may not be recoverable.

  Income Taxes

   The Company provides deferred income taxes pursuant to the requirements of
the Financial Accounting Standards Board Statement No. 109, "Accounting for
Income Taxes." Under SFAS No. 109, deferred tax assets and liabilities are
determined based on the difference between the financial statement and income
tax bases of assets and liabilities and carry-forwards using currently enacted
tax rates. The Company estimates its income tax valuation allowance by
assessing which deferred tax assets are more likely than not to be recovered in
the future. (see Note 8)

  Use of Estimates in the Preparation of Financial Statements

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
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. The estimates and assumptions used in the accompanying
financial statements are based upon management's evaluation of the relevant
facts and circumstances as of the date of the financial statements. Actual
results could differ from those estimates.

  Concentration of Credit Risk

   Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents, short-term
investments, long-term investments and trade accounts receivable. The Company's
cash flow can be exposed to market risks primarily in the form of changes in
interest rates. The Company's cash management and investment policies restrict
investments to highly liquid, low risk debt instruments. The Company currently
does not use interest rate derivative instruments to manage exposure to
interest rate changes.

   The Company performs ongoing credit evaluations of its customers and
generally does not require collateral on accounts receivable. The Company
maintains allowances for potential credit losses and such losses have been
within management's expectations except for one credit loss during 2000 that
resulted in the recording of $1.4 million of additional bad debt expense. As of
December 31, 2001, the Company's three largest clients accounted for 67% of the
accounts receivable balance. As of December 31, 2000, the Company's largest
client accounted for 17% of the accounts receivable balance. There were no
other clients who represented more than 10% of the Company's accounts
receivable balances as of December 31, 2001 or 2000. For the year ended
December 31, 2001, Aon Service Corporation and Airborne Express were the
Company's two largest clients, accounting for 39% and 12% respectively, of
total revenues. No client accounted for more than 10% of total revenues for the
year ended December 31, 2000.

                                      F-8

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


  Fair Value of Financial Instruments

   The carrying value of current assets and liabilities approximated their fair
value at December 31, 2001 and 2000.

  Stock-Based Compensation

   The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board (APB) Opinion No. 25,
''Accounting for Stock Issued to Employees'' and related interpretations and
elects the disclosure option of SFAS No. 123. SFAS No. 123 requires that
companies either recognize compensation expense for grants of stock, stock
options, and other equity instruments based on fair value, or provide pro forma
disclosure of net income and earnings per share in the notes to the financial
statements. Accordingly, compensation expense for stock options is measured as
the excess, if any, of the fair value of the Company's stock at the date of
grant over the exercise price (see Note 13).

  Comprehensive Income

   Effective January 1, 1998, the Company implemented SFAS No. 130, ''Reporting
Comprehensive Income.'' SFAS No. 130 establishes standards for reporting
comprehensive income and its components in the financial statements.
Comprehensive income, as defined, includes all changes in equity (net assets)
during a period from non-owner sources. To date, the transactions that are
required to be reported in comprehensive income are not material.

  Reclassification

   Certain prior year amounts have been reclassified to conform to the current
year presentation.

  Stock Split

   In October 1999, the Board of Directors declared a two for one stock split
of the common stock effected in the form of a dividend. The accompanying
consolidated financial statements and related notes give retroactive effect to
this stock split.

  Basic and Diluted Net Loss Per Share

   The Company computes basic and diluted net income (loss) per share in
accordance with SFAS No. 128, ''Earnings per Share.'' Basic net income (loss)
per common 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 is based on the weighted average number of shares of
common stock outstanding, adjusted, if dilutive, for the effect of common stock
equivalents. Common stock equivalents are composed of incremental shares of
common stock issuable upon the exercise of stock options and warrants, common
stock subject to restrictions and incremental shares of stock issuable upon the
conversion of subordinated convertible debt and Series A convertible preferred
stock.

   For the years ended December 31, 1999, 2000 and 2001, additional shares
potentially issuable for restricted shares, stock options, convertible debt,
and the Company's Series A convertible preferred stock would have been 9,060,
5,858 and 1,544, respectively but for the net loss recorded.

                                      F-9

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   The following table sets forth the weighted average effect of common stock
equivalents that are not included in the diluted net income (loss) per share
calculation for each respective period because the exercise price exceeded the
average estimated fair market value price for that period.

<TABLE>
<CAPTION>
                                                           1999 2000 2001
                                                           ---- ---- -----
      <S>                                                  <C>  <C>  <C>
      Weighted average effect of common stock equivalents:
         Options outstanding..............................  14  550  5,568
         Restricted shares................................  --   --    700
         Warrants.........................................  41   --     --
                                                            --  ---  -----
                                                            55  550  6,268
                                                            ==  ===  =====
</TABLE>

   The following table gives pro forma effect for income taxes assuming that
the Company was a
C-Corporation for all of 1999 (see Note 8).

<TABLE>
<CAPTION>
                                                                 1999
                                                                -------
        <S>                                                     <C>
        Pro forma (unaudited):
           Net loss available to common stockholders........... $(3,559)
           Pro forma adjustment to tax benefit.................     321
                                                                -------
           Pro forma net loss available to common stockholders. $(3,238)
                                                                =======
           Pro forma loss per share basic and diluted.......... $ (0.15)
                                                                =======
</TABLE>

3. Master service agreement fulfillment revenues

   In December 1999, the Company and Dell Computer Corporation (''Dell'')
entered into a strategic alliance. As part of the strategic alliance, Dell
purchased 1,000 shares of the Company's common stock at $11.00 per share and
1,000 shares from one of the Company's stockholders and trusts for the benefit
of his family at $11.00 per share. The Company and a subsidiary of Dell also
entered into a master service agreement under which the subsidiary guaranteed
minimum annual revenues to the Company totaling $40,000 over a five-year
period, although the subsidiary had the right to terminate the agreement after
three years. The guaranteed revenues for the first three years were
approximately $15,000.

   In December 2001, Dell and the Company executed an amendment to the master
service agreement. In accordance with the modified agreement, Dell paid the
Company $1,640 to fulfill its 2001 revenue commitment. Dell made the payment by
tendering 2,000 shares of Company stock with a market value of $0.82 per share.
Subject to Dell's ability to make certain payments to the Company in lieu of
purchasing services, the revised agreement calls for Dell to purchase $1,000 of
services from the Company in each of the next five quarters, beginning in the
first quarter of 2002.

4. Acquisitions

   On September 2, 1999, the Company acquired Ingenious, Inc. (''Ingenious''),
a consulting company, for total consideration of $1,121. The acquisition was
recorded under the purchase method of accounting. As part of the acquisition,
the two principal owners of Ingenious agreed to employment agreements with the
Company through August 31, 2002. If these individuals do not comply with the
employment agreements, they will be required to remit to the Company $1,000 of
the consideration received. Consequently, $1,000 of the purchase price has been
recorded as deferred compensation and is being amortized ratably through August
31, 2002. The

                                     F-10

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)

balance of the total purchase price was allocated to other current operating
assets. The Ingenious acquisition and one other acquisition consummated during
1999 are not significant and as such, separate pro forma financial information
has not been presented (see Note 15).

5. Business Restructuring

   In the fourth quarter of 2000, the Company approved a restructuring plan.
The restructuring plan included the consolidation of certain facilities, the
realignment of the Company's operations and the closure of the Company's
Singapore and India operations. The Company recorded a special charge of
$8,100, which increased the after tax net loss by $5,516. The Company
terminated approximately 130 employees under the plan related to the closing of
the Company's facilities in Asia and by terminating certain billable and
nonbillable employees in the U.S.

   During 2001, the Company approved restructuring plans which included the
closure and consolidation of certain additional facilities as well as
restructuring of the executive management team. The Company recorded a special
charge of $14,341 which increased the after tax net loss by $8,978. The charge
included the consolidation of certain facilities including the Company's
corporate office into the Chicago practice. In 2001, the Company terminated
approximately 184 employees under the plans in response to adverse business
conditions.

   The Company incurred asset write-downs related to the impairment of fixed
assets associated with the restructuring activity during the years ended 2000
and 2001. The impairment related to abandoned leasehold improvements, furniture
and fixtures, and equipment.

   Restructuring liability activity consists of the following:

<TABLE>
           <S>                                              <C>
           Balance at December 31, 1999.................... $    --
           Restructuring charges...........................   8,100
           Leasehold improvements and equipment write-downs  (2,400)
           Severance payments..............................    (805)
           Space rationalization payments..................    (200)
                                                            -------
           Balance at December 31, 2000....................   4,695
           Restructuring charges...........................  14,341
           Leasehold improvements and equipment write-downs  (5,192)
           Severance payments..............................  (3,178)
           Space rationalization payments..................  (3,026)
                                                            -------
           Balance at December 31, 2001.................... $ 7,640
                                                            =======
</TABLE>

   At December 31, 2001, the restructuring liability consisted of $1,308 of
remaining severance liabilities related to employees terminated in December
2001 and $6,332 related to lease termination and other restructuring related
costs. Remaining severance payments are expected to be paid during the first
quarter of 2002. Payments related to lease terminations could continue through
2009, depending on the Company's ability to successfully negotiate sublease or
lease termination arrangements.

                                     F-11

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


6. Property and Equipment

   Property and equipment consisted of the following as of December 31:

<TABLE>
<CAPTION>
                                                      2000     2001
                                                     -------  -------
         <S>                                         <C>      <C>
         Computers, computer peripheral and software $ 8,960  $ 7,876
         Furniture and fixtures.....................   2,592    1,927
         Office machines and equipment..............   2,396    1,329
         Leasehold improvements.....................   3,405    2,564
                                                     -------  -------
                                                      17,353   13,696
         Less: accumulated depreciation.............  (3,863)  (7,349)
                                                     -------  -------
         Property and equipment, net................ $13,490  $ 6,347
                                                     =======  =======
</TABLE>

7. Debt

  Bank Line of Credit

   The Company has an amended line of credit in place pursuant to a loan
agreement with its commercial bank dated January 1, 2001 and maturing on April
1, 2002. There were no borrowings under the loan as of December 31, 2000 or
2001. The line has a maximum borrowing amount of $3,500 of which $3,000 is
subject to a formula based on 75% of eligible accounts receivable. Borrowings
are secured by accounts receivable and general Company assets. Borrowings bear
interest at the lender's ''index rate'' of 9.50% and 4.75% at December 31, 2000
and 2001, respectively. An unused facility fee is due semiannually in an amount
equal to 0.25% of the difference between $3,500 and the average daily
outstanding principal. The loan agreement contains certain financial covenants,
including maintenance of a 1.75 to 1 debt service ratio and cash investments
greater than $25,000 (both as defined). The Company received waivers in respect
to the debt service ratio covenants at December 31, 2000 and 2001.

  Subordinated Convertible Debt

   The Company issued eight notes on June 30, 1998 to the Company's advisors,
directors and a former Chief Operating Officer. The notes had an aggregate face
value of $2,190 and were issued at a premium of $405. The stated interest rate
was 5.79%. The notes were recorded at their face value, plus unamortized
original issue premium, plus accrued interest. The original issue premium was
being amortized using the effective interest rate method over the ten-year life
of the notes.

   On July 1, 1999, the holders converted the notes into 2,700 shares of common
stock pursuant to an agreement with the Company. The face value of the notes
plus accrued interest at conversion aggregated $2,317. As provided in the terms
of the notes, the conversion rate was adjusted to $0.86 per share as a result
of the common stock dividend distributions prior to conversion of the notes.

8. Income Taxes

   The Company's income tax benefit of $11,467 for the year ended December 31,
2001, consisted of deferred federal tax benefit of $10,269 and deferred state
tax benefit of $1,198. The Company's income tax benefit of $9,939 for the year
ended December 31, 2000, consisted of a deferred federal tax benefit of $8,933
and deferred state tax benefit of $1,006. The Company's income tax benefit of
$431 for the year ended December 31, 1999 consisted of current state tax
expense of $77, deferred federal tax benefit of $375 and deferred state tax
benefit of $133.

                                     F-12

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   The Company terminated its S-Corporation election for federal and state
purposes on June 17, 1999. Accordingly, all income that was earned in the
subsequent C-Corporation period was taxable at the statutory federal and state
tax rates. In order to present amounts in a comparable format, the statement of
operations includes a pro forma adjustment for additional taxes that would have
been recorded if the Company had been a C-Corporation all of 1999 based upon
the tax laws in effect during that year. Unaudited pro forma income tax benefit
calculated on a separate company basis in conformity with SFAS 109 was as
follows:

<TABLE>
<CAPTION>
                        Unaudited pro forma      1999
                        -------------------      -----
                        <S>                      <C>
                        Current:
                           Federal.............. $ 100
                           State................    22
                        Deferred:
                           Federal..............  (769)
                           State................  (105)
                                                 -----
                        Total income tax benefit $(752)
                                                 =====
</TABLE>

   The provisions for income taxes differ from the amount of income tax
determined by applying the applicable U.S. statutory federal income tax rate to
income from operations as a result of the following differences for the years
ended December 31:

<TABLE>
<CAPTION>
                                                        1999      2000      2001
                                                      --------- --------  --------
                                                      Unaudited
                                                      pro forma
<S>                                                   <C>       <C>       <C>
Income tax benefit at statutory U.S. tax rates of 34%  $(1,024) $(10,590) $(10,269)
Increase (decrease) in rates resulting from:
   State taxes.......................................     (120)   (1,067)   (1,198)
   Change in valuation allowance.....................       --     1,323        --
   Other, net........................................      392       395        --
                                                       -------  --------  --------
Benefit for income taxes.............................  $  (752) $ (9,939) $(11,467)
                                                       =======  ========  ========
</TABLE>

   Deferred taxes were as follows as of December 31:

<TABLE>
<CAPTION>
                                                     2000     2001
                                                    -------  -------
          <S>                                       <C>      <C>
          Current:
             Accrual to cash....................... $  (157) $   (85)
             Provision for doubtful accounts.......     764      142
             Deferred compensation.................   1,161    2,167
                                                    -------  -------
                 Current deferred tax asset........ $ 1,768  $ 2,224
                                                    -------  -------
          Noncurrent:
             Net operating loss carryforward....... $ 8,952  $16,302
             Charitable contribution...............   8,951    8,951
             Valuation allowance...................  (8,951)  (8,951)
             Depreciation..........................      48    2,679
             Restructuring reserve.................   1,782    2,797
             Other, net............................      15      (67)
                                                    -------  -------
                 Noncurrent deferred tax asset.....  10,797   21,711
                                                    -------  -------
                 Total deferred taxes.............. $12,565  $23,935
                                                    =======  =======
</TABLE>

                                     F-13

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   As of December 31, 2001, the Company has recorded a deferred tax asset of
$16,302 reflecting the benefit of approximately $43,000 in loss carryforwards,
which expire in varying amounts between 2019 and 2021. Realization is dependent
on generating sufficient taxable income prior to expiration of the loss
carryforwards. Although realization is not assured, management believes it is
more likely than not that all of the deferred tax asset will be realized. The
amount of the deferred tax asset considered realizable, however, could be
reduced if estimates of future taxable income during the carryforward period
are reduced.

9. Commitments and Contingencies

  Operating Leases

   The Company is obligated under various noncancellable operating leases for
its current office space and restructured office space in Austin, Charlotte,
Chicago, Dallas, Los Angeles, New York, San Francisco and Seattle. Future
minimum rental commitments under all noncancellable operating leases with
initial or remaining terms in excess of one year are as follows for each
respective year ending December 31:

<TABLE>
                               <S>        <C>
                               2002...... $ 3,036
                               2003......   3,093
                               2004......   3,050
                               2005......   2,163
                               2006......   1,541
                               Thereafter   3,108
                                          -------
                                          $15,991
                                          =======
</TABLE>

   Rent expense for the years ended December 31, 1999, 2000 and 2001 was $827,
$3,073, and $1,776, respectively.

  Letters of Credit

   As of December 31, 2001, the Company had standby letters of credit issued by
its bank in the aggregate amount of $872 related to security deposits on three
office leases.

10. Employee Loans

   In June 1999, the Company entered into an employment agreement with its
president and chief executive officer. Pursuant to this agreement, the Company
loaned the executive $2,500 under a note that will mature and be due on the
earlier of six months after termination of employment or June 30, 2003. The
note bears interest at 5.37% per annum. The loan will be payable upon maturity
if the executive is still employed by the Company but only if the fair market
value of the executive's holdings in the Company's common stock is greater than
an agreed-upon amount. Otherwise, the loan will be forgiven at the rate of $100
per month commencing on the maturity date until all principal and interest is
forgiven. If the loan becomes due pursuant to the loan's conditions, but the
executive does not have the ability to liquidate his stock, the maturity will
be postponed. The Company recorded the loan, included in other assets, as
deferred compensation and amortized the loan over 30 months, the period in
which the loan may be forgiven.

   In addition, upon execution of the employment agreement, the executive
purchased 2,400 restricted shares of common stock at $1.35 per share. Due to
the sales price being deemed less than the then current market value,

                                     F-14

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)

the Company recorded $2,148 in deferred compensation related to this sale of
securities and is amortizing such amount over the 48 month period during which
the restrictions lapse. The restrictions are subject to certain acceleration
provisions upon a change in control and upon termination of employment. The
Company loaned the executive $3,228 on a full recourse basis to purchase the
restricted stock. The loan bears interest at 5.37%. The loan and related
interest is due three years after the liquidity event (as defined) (see Note
15).

11. Related Party Transactions

   During 1999, the Company's former chairman was a member of the Board of
Directors of a corporation that was the Company's most significant client
during the fiscal year ended December 31, 1999. In addition, he was a
stockholder with beneficial ownership of less than 1% of this client's
outstanding common stock as of December 31, 1999. The Company believes that the
fees billed to this client were based on customary business terms.

   Upon completion of an engagement for its major client in November 1999, the
Company granted to the client a fully vested option to purchase up to 400
shares of the Company's common stock at an exercise price of $7.00 per share
resulting in a charge of $1,258. Pursuant to an agreement executed
simultaneously with this grant, the Company was given a fully vested option to
purchase 167 shares of the client's common shares at $7.625 per share resulting
in a benefit of $4,902. The net effect of $3,644 was recorded in other income
in the accompanying 1999 statement of operations. During 2000, both the Company
and the client exercised their respective options resulting in the issuance of
321 shares of the Company's common stock and the receipt of 143 shares of the
client's common stock. Due to an other-than-temporary decline in market value,
the Company recorded a $3,601 write-down of the carrying value of the
investment in the accompanying 2000 statement of operations.

   In 1999, the Board of Directors authorized the Company to make a
contribution to the Lante Foundation in the amount of 336 shares of the
Company's common stock. The contribution was completed in March 2000. The
Company recorded a charge of $3,360 in 1999 related to this contribution.

12. Retirement Plan

   The Company has a defined contribution profit sharing plan which is
qualified under section 401(k) of the Internal Revenue Code and for which most
employees are eligible. The plan provides for discretionary Company
contributions based on a percentage of eligible participants' compensation, as
defined. In addition, the Company may make matching contributions based on
eligible participants' deferral contributions. In 1999, 2000 and 2001 the
Company expensed matching contributions in the amounts of $266, $583, and $234,
respectively.

13. Stockholders' Equity and Other Stock Related Information

  Preferred Stock and Common Stock

   In June 1999, the Company amended its Certificate of Incorporation to
provide for one class of common stock and one class of preferred stock. The
amendment authorized 50,000 shares of common and 10,000 shares of preferred
stock and allocated 4,243 shares as Series A convertible preferred stock. In
February 2000, the Company amended its Certificate of Incorporation to increase
the authorized number of shares of common stock to 150,000. Each previously
issued and outstanding share of voting Class A common stock and non-voting
Class B common stock was converted and exchanged into one share of common
stock, $0.01 par value.

                                     F-15

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   In June 1999, the Company issued 3,536 shares of Series A redeemable
convertible preferred stock, par value $0.01 per share for an aggregate value
of $25,000, net of issuance costs of $186. In conjunction with the Company's
initial public offering in February 2000, the Series A redeemable convertible
preferred stock was converted into 7,072 shares of common stock.

   In June 1999, the Company repurchased 2,460 shares of common stock at
approximately $2.24 per share, from certain employee stockholders. The
repurchased shares were cancelled upon redemption. The Company issued
promissory notes aggregating $5,519 in payment for the repurchased shares,
which notes were fully repaid in June 1999.

   In September 1999, pursuant to a stockholder's agreement, the Company
executed its right to repurchase 2,000 shares of common stock held by a former
employee. The Company paid cash of $724 net of $278 due to the Company by the
stockholder, and issued a promissory note aggregating $3,008 as payment for the
repurchased shares. In January of 2001, the Company paid the principle plus
accrued interest on this note.

   In January 2000, the Company completed the sale of 1,000 shares of common
stock to Dell USA, L.P., a wholly owned subsidiary of Dell Computer
Corporation, at $11.00 per share. Proceeds to the Company were approximately
$11,000.

   In February 2000, the Company completed an initial public offering of common
stock which resulted in the issuance of 4,600 shares of common stock. Proceeds
to the Company, net of underwriting discounts and costs of the offering, were
approximately $83,400. Concurrent with the initial public offering, 3,536
shares of the Company's Series A convertible preferred stock were converted to
7,072 shares of the Company's common stock. Dividends and accretion related to
the Company's Series A convertible preferred stock reduced income available to
common stockholders up through the date of conversion.

   In December of 2001 the Company received 2,000 shares of its own common
stock with a market value of $0.82 per share from Dell USA, L.P., a wholly
owned subsidiary of Dell Computer Corporation. The shares were received in
conjunction with the unfulfilled revenue commitments related to the master
service agreement between Dell USA, L.P. and the Company. The shares were
retired upon redemption (see Note 3).

  S-Corporation Dividends

   Prior to June 17, 1999, the Company was treated as an S-Corporation for
income tax purposes and paid out dividends to compensate stockholders for their
estimated tax liabilities. The dividend totaled $582 in the year ended December
31, 1999. In addition, on June 15, 1999, the Company declared a dividend in
conjunction with the conversion to a C-Corporation consisting of $2,488 of
accounts receivable and $1,500 of cash.

  Stock Purchase Plan

   Effective January 1, 2000, the Board of Directors authorized the 2000
Employee Stock Purchase Plan (ESPP), which provides for the issuance of a
maximum of 800 shares of common stock. The ESPP permits eligible employees to
purchase common stock through payroll deductions of up to 15% of the
participant's compensation. Amounts accumulated by the employee are used to
purchase shares of common stock at the end of semi-annual enrollment periods.
The first offering period began on July 14, 2000 and thus, was less than six
months long. Offering periods thereafter begin on January 1 and July 1.
Purchases will occur on June 30 and December 31, or the first day of trading
after these dates. The price of stock purchased under the ESPP is 85% of

                                     F-16

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)

the lower of the fair market value of the common stock at the beginning or end
of the enrollment period. In accordance with the ESPP the Company issued 94
shares on January 2, 2001, 314 shares on June 30, 2001 and 151 shares on
December 31, 2001.

  Stock Option Plan

   In June 1998, the Company adopted its 1998 Option Plan (''the 1998 Plan''),
under which it may grant nonqualified stock options for shares of common stock
to employees, directors, and advisors. In December 1999, the 1998 Plan was
amended to increase the number of nonqualified stock options for shares of
common stock available to be granted from 10,000 to 15,000. The 1998 Plan is
administered, and grants are determined, by the compensation committee of the
Board of Directors. No options were granted under the 1998 Plan after July 1,
2001.

   In March 2001, the Company adopted its 2001 Stock Incentive Plan (''the 2001
Plan''), under which it may grant qualified or nonqualified stock options for
shares of common stock to employees, directors, and advisors. The 2001 Plan
authorized 8,000 nonqualified stock options for shares of common stock
available to be granted. The 2001 Plan is administered, and grants are
determined, by the compensation committee of the Board of Directors.

   Options granted under both plans generally vest over a four-year period and
expire nine years from the date of grant. Some options have been issued with
shorter vesting periods. Stock option activity under both plans is summarized
as follows:

<TABLE>
<CAPTION>
                                                    Weighted average
                                            Option   exercise price
                                            shares     per share
                                            ------  ----------------
           <S>                              <C>     <C>
           Outstanding at December 31, 1998  4,182       $ 0.23
              Granted......................  4,215         2.33
              Exercised.................... (1,708)        0.24
              Canceled.....................   (976)        0.29
                                            ------
           Outstanding at December 31, 1999  5,713         1.77
              Granted......................  4,232        14.91
              Exercised....................   (581)        0.59
              Canceled..................... (1,021)       13.23
                                            ------
           Outstanding at December 31, 2000  8,343         7.12
              Granted......................  7,046         1.14
              Exercised....................   (203)        0.38
              Canceled..................... (5,013)        7.73
                                            ------
           Outstanding at December 31, 2001 10,173         2.80
                                            ======
</TABLE>

   Approximately 389 and 1,676 of the outstanding options were exercisable as
of December 31, 1999 and 2000, respectively.

                                     F-17

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   The following table summarizes information about stock options outstanding
at December 31, 2001.

<TABLE>
<CAPTION>
                                       Weighted
                            Number      average   Weighted   Number    Weighted
                          outstanding  remaining  average  exercisable average
                             as of    contractual exercise    as of    exercise
Range of exercise prices: period end     life      price   period-end   price
------------------------- ----------- ----------- -------- ----------- --------
<S>                       <C>         <C>         <C>      <C>         <C>
      $ 0.23-$ 0.37......    1,724       5.56      $ 0.28     1,386     $ 0.27
       0.85-  2.25.......    6,673       8.34        1.11     1,190       1.36
       2.31- 10.31.......    1,035       7.04        5.08       364       5.55
      10.32- 69.00.......      741       7.20       20.73       433      18.22
                            ------                            -----
      $ 0.23-$69.00......   10,173       7.65      $ 2.80     3,373     $ 3.53
                            ======                            =====
</TABLE>

   The Company had 9,135 stock options available for grant at December 31, 2001
(see Note 15).

   In June 1999, the options previously granted to one employee were reduced to
2,000 from 3,500. In conjunction with this change, the vesting of the
employee's remaining options was accelerated so that the options were fully
vested and the options were immediately exercised at the original price of
$0.23 per share.

   In accordance with the provisions of APB 25, the Company recorded deferred
compensation of $5,006 during the year ended December 31, 1999 for options
issued to employees with an exercise price below the estimated fair value of
the common stock at the date of grant. Had compensation expense for the
Company's stock option Plans and the ESPP been determined based on the fair
value at the grant date for awards consistent with the methodology prescribed
under SFAS No. 123, the Company's net income would have differed by the
following amounts for the years ended December 31:

<TABLE>
<CAPTION>
                                                    1999      2000      2001
                                                   -------  --------  --------
 <S>                                               <C>      <C>       <C>
 Unaudited pro forma:
    Net loss as reported.......................... $(2,582) $(21,208) $(19,194)
    Supplemental pro forma compensation (expense)
      income, net of tax..........................    (184)  (10,550)      245
                                                   -------  --------  --------
    Pro forma net loss............................ $(2,766) $(31,758) $(18,949)
                                                   =======  ========  ========
    Net loss per diluted share, as reported....... $ (0.16) $  (0.60) $  (0.49)
    Net loss per diluted share, pro forma......... $ (0.17) $  (0.89) $  (0.49)
</TABLE>

   Because additional stock options are expected to be granted each year and
the pro forma net loss includes the effect of options granted in 1999, 2000 and
2001, the above pro forma disclosures are not representative of the pro forma
effects on reported financial results for future years.

   The following assumptions were used by the Company to determine the fair
value of stock options granted, using the Black-Scholes option-pricing model.
For options granted in 1999, the Company used a risk-free interest rate ranging
from 4.59% to 6.11%; an expected option life ranging from two to six years; a
zero dividend yield and expected volatility of zero. For options granted in
2000 the Company used a risk-free interest rate ranging from 4.59% to 6.11%; an
expected option life ranging from two to six years; a zero dividend yield and
expected volatility of 141%. For options issued in 2001 the Company used a risk
free interest rate ranging from 3.17% to 5.13%; expected option life ranging
from one to five years; zero dividend yield, and expected volatility of 128%.

   The Company granted 2,400 shares of restricted stock at weighted average
grant prices of $1.35 during the year ended December 31, 1999 (see Note 15).

                                     F-18

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

                     (In thousands, except per share data)


   Pursuant to a shareholders agreement, certain defined holders of preferred
and common stock elected to purchase 310 shares of common stock from the
Company at $11.00 per share in December 1999. Additionally, certain members of
management elected to purchase 200 shares of common stock from the Company at
$11.00 per share in December 1999.

14. Recent Accounting Pronouncements

   In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"). SFAS 141 requires business combinations
initiated after June 30, 2001 to be accounted for using the purchase method of
accounting. SFAS 142 addresses the recognition and measurement of goodwill and
other intangible assets subsequent to their acquisition. This statement
requires that intangible assets with finite useful lives be amortized and
intangible assets with indefinite lives and goodwill no longer be amortized,
but instead be tested for impairment at least annually. We do not anticipate
that the adoption of SFAS No. 141 and 142 will have a material effect on the
Company's existing assets as of December 31, 2001. The Company will account for
the purchase of certain Luminant Worldwide Corporation assets pursuant to SFAS
141 and SFAS 142. As a result, approximately $3.5 million of the $6.8 million
purchase price will be allocated to goodwill and assembled workforce and, as a
result, will not be amortized.

   In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144") which is effective
for fiscal years beginning after December 15, 2001. SFAS 144 addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets and supercedes SFAS No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" while retaining many of the
provisions of that statement. We do not expect the adoption of SFAS 144 to have
a material impact on the Company's financial position or results of operations.

   In February 2002, the FASB issued EITF D-103, "Income Statement
Characterization of Reimbursements Received for Out-of-Pocket Expenses
Incurred" ("EITF D-103") which is effective for fiscal years beginning after
December 15, 2001. EITF D-103 addresses the change in reporting requirements
for reimbursable expenses related to the delivery of services. The adoption of
this new guidance in the first quarter of 2002 will cause the Company's
recorded revenue to increase and will also correspondingly increase the
Company's professional services expense, which will result in no change to the
Company's professional service margin. We will restate prior periods in
accordance with EITF D-103 to provide comparability.

15. Subsequent Events

  Acquisition

   On January 8, 2002, the Company purchased certain assets of Luminant
Worldwide Corporation, a Texas-based company. The total transaction cost was
$6,778 consisting of $5,200 cash purchase price, $1,038 million for certain
purchased account receivable balances, and $541 in transaction costs and
assumed liabilities.

   In connection with the purchase the Company hired approximately 150 of the
Luminant employees on a transitional or permanent basis. Included in the assets
purchased were furniture and fixtures, computer equipment and software. A
percentage of the purchase price will be allocated to assembled workforce,
client lists, customer contracts, employment agreements, alliance agreements,
partnership agreements, intellectual property and goodwill.

                                     F-19

<PAGE>

                               LANTE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Concluded)

                     (In thousands, except per share data)


  Executive Stock Repurchase

   On January 21, 2002 the Company repurchased 2,366 shares of restricted
Company common stock previously sold to its president and chief executive
officer. Although certain of the repurchased shares were not yet vested
pursuant to the original purchase agreement, the vesting of those restricted
shares was accelerated prior to the repurchase. This acceleration will increase
the amount of deferred compensation expense recorded during the first quarter
of 2002 by approximately $700. The stock was repurchased at the then present
fair market value price of $1.33 per share. The outstanding receivable on the
Company's books related to the executive officer's purchase of the stock will
be reduced by the Company's repurchase price of approximately $3,146. The
unpaid accrued interest and unpaid principal related to the stockholder note
receivable, which was recorded in the Company's shareholder equity section of
the accompanying consolidated balance sheet, was replaced with a new note in
the principal amount of $545. The repurchased shares were retired upon
redemption.

                                     F-20

<PAGE>

                                                                    SCHEDULE II

                       VALUATION AND QUALIFYING ACCOUNTS

                               LANTE CORPORATION
                                (In thousands)

<TABLE>
<CAPTION>
                                      Balance at  Charged to Charged to               Balance at
                                     beginning of costs and    other                    end of
            Description                 period     expenses   accounts  Deductions(a)   period
            -----------              ------------ ---------- ---------- ------------- ----------
<S>                                  <C>          <C>        <C>        <C>           <C>
1999 Allowance for Doubtful Accounts    $  313      $  735       --        $  (152)     $  896
2000 Allowance for Doubtful Accounts       896       2,497       --         (1,380)      2,013
2001 Allowance for Doubtful Accounts     2,013        (280)      --         (1,359)        374
</TABLE>
--------
(a) Accounts receivable write-offs, net of recoveries.