**UNITED STATES****SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C.20549**

 

**FORM 10-Q**

 
| **ý** | **QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|------------|----------------------------------------------------------------------------------------|

 

**For the quarterlyperiod ended March 31, 2003**

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

 

**Commission filenumber 0-15946**

 

**ebix.com, Inc.**

(Exact name of registrant as specified in its charter)

 
| **DELAWARE**                                                    |   | **77-0021975**                       |
|-----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or  organization) |   | (I.R.S. Employer Identification No.) |
|                                                            |   |                                 |
| **1900 E. GOLF ROAD  SCHAUMBURG, IL**                           |   | **60173**                            |
| (Address of principal executive offices)                        |   | (Zip Code)                           |
|                                                            |   |                                 |
| Registrant’s telephone number, including area code:        |   | **847-789-3047**                     |

 

Indicate bycheck mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes ýNo o

 

Indicate by check mark whether the registrantis an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  ý

 

As of May 8, 2003, the number of shares ofCommon Stock outstanding was 2,291,143.

 

 

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**ebix.com, Inc. andSubsidiaries**

 

FORM 10-Q

 

FOR THE QUARTER ENDED MARCH 31, 2003

 

INDEX

 
| Part I —  FINANCIAL INFORMATION                                                                         |   |
|--------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                         |   |   |
| Item 1.   Consolidated Financial Statements                                                             |
|                                                                                                         |   |   |
| Consolidated Balance Sheets at March 31, 2003 (unaudited) and  December 31, 2002                             |
|                                                                                                         |   |   |
| Consolidated Statements of Operations for  the Three  Months ended March 31, 2003  and 2002 (unaudited) |
|                                                                                                         |   |   |
| Consolidated Statements of Cash Flows for  the Three Months ended March 31, 2003 and 2002 (unaudited)        |
|                                                                                                         |   |   |
| Notes to Consolidated Financial Statements  (unaudited)                                                      |
|                                                                                                         |   |   |
| Item 2.   Management’s Discussion and Analysis of Financial Condition and  Results of Operations   |
|                                                                                                         |   |   |
| Item 3.   Quantitative and Qualitative Disclosures About  Market Risk                              |
|                                                                                                         |   |   |
| Item 4.   Controls and Procedures                                                                       |   |
|                                                                                                         |   |   |
| PART II — OTHER INFORMATION                                                                        |   |
|                                                                                                         |   |   |
| Item 6.   Exhibits and Reports on Form 8-K                                                              |   |
|                                                                                                         |   |   |
| SIGNATURES                                                                                                   |   |
|                                                                                                         |   |
| CERTIFICATIONS                                                                                               |   |
|                                                                                                              |        |  |  |

 

2

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**ebix.com, Inc. andSubsidiaries**

**Consolidated Balance Sheets**

(In thousands, except for share amounts)

 
|                                                                                                                  |   | **March 31,  2003** |   | **December  31,  2002** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|-------------------------|--------|
|                                                                                                                  |   | **(Unaudited****)** |   |                    |   |
| **ASSETS**                                                                                                            |   |                |   |                    |   |
| **Current assets:**                                                                                                   |   |                |   |                    |   |
| Cash and cash equivalents                                                                                             |   | $                   | 5,703  |                    | $      | 4,993 |   |
| Accounts receivable, less allowance of $672  and $634                                                                 |   | 3,323               |   | 2,863                   |   |
| Other current assets                                                                                                  |   | 213                 |   | 340                     |   |
| **Total current  assets**                                                                                             |   | 9,239               |   | 8,196                   |   |
| Property and equipment, net                                                                                           |   | 1,181               |   | 1,131                   |   |
| Capitalized software, net                                                                                             |   | 191                 |   | 218                     |   |
| Other assets                                                                                                          |   | 422                 |   | 421                     |   |
| **Total assets**                                                                                                      |   | $                   | 11,033 |                    | $      | 9,966 |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                         |   |                |   |                    |   |
| **Current liabilities:**                                                                                              |   |                |   |                    |   |
| Accounts payable and accrued expenses                                                                                 |   | $                   | 1,838  |                    | $      | 1,727 |   |
| Accrued payroll and related benefits                                                                                  |   | 380                 |   | 342                     |   |
| Current portion of long-term debt                                                                                     |   | 106                 |   | 106                     |   |
| Current portion of capital lease  obligations                                                                         |   | 118                 |   | 114                     |   |
| Deposit liabilities                                                                                                   |   | 8                   |   | 10                      |   |
| Deferred revenue                                                                                                      |   | 3,330               |   | 2,869                   |   |
| **Total current  liabilities**                                                                                        |   | 5,780               |   | 5,168                   |   |
| Long-term debt, less current portion                                                                                  |   | —              |   | —                  |   |
| Capital lease obligation, less current  portion                                                                       |   | 42                  |   | 73                      |   |
| Other liabilities                                                                                                     |   | —              |   | —                  |   |
| **Total liabilities**                                                                                                 |   | 5,822               |   | 5,241                   |   |
| **Stockholders’ equity:**                                                                                        |   |                |   |                    |   |
| Convertible Series D Preferred  stock, $.10 par value, 2,000,000 shares authorized, no shares issued and  outstanding |   | —              |   | —                  |   |
| Common stock, $.10 par value, 40,000,000 shares  authorized, 2,291,143 shares issued and outstanding                  |   | 229                 |   | 229                     |   |
| Additional paid-in capital                                                                                            |   | 88,432              |   | 88,441                  |   |
| Deferred compensation                                                                                                 |   | (351                | )      | (366                    | )      |
| Accumulated deficit                                                                                                   |   | (83,404             | )      | (83,920                 | )      |
| Accumulated other comprehensive income                                                                                |   | 305                 |   | 341                     |   |
| **Total stockholders’ equity**                                                                                   |   | 5,211               |   | 4,725                   |   |
| **Total liabilities and stockholders’ equity**                                                                   |   | $                   | 11,033 |                    | $      | 9,966 |   |

 

See accompanying notes toconsolidated financial statements.

 

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**ebix.com, Inc. andSubsidiaries**

**ConsolidatedStatements of Operations**

(In thousands, except per share data)

(Unaudited)

 
|                                                                                                                                                                                                                                                 |   | **Three  Months Ended March 31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                                                                                                                                                                                 |   | **2003**                          |   | **2002** |   |
|                                                                                                                                                                                                                                                 |   |                              |   |   |   |
| **Revenue:**                                                                                                                                                                                                                                         |   |                              |   |   |   |
| Software                                                                                                                                                                                                                                             |   | $                                 | 210    |   | $ | 425 |   |
| Services and other                                                                                                                                                                                                                                   |   | 3,402                             |   | 2,920 |   |
| **Total revenue**                                                                                                                                                                                                                                    |   | 3,612                             |   | 3,345 |   |
| **Operating expenses:**                                                                                                                                                                                                                              |   |                              |   |   |   |
| Services and other costs                                                                                                                                                                                                                             |   | 1,005                             |   | 992 |   |
| Product development                                                                                                                                                                                                                                  |   | 360                               |   | 651 |   |
| Sales and marketing                                                                                                                                                                                                                                  |   | 461                               |   | 515 |   |
| General and administrative                                                                                                                                                                                                                           |   | 1,164                             |   | 882 |   |
| **Total operating  expenses**                                                                                                                                                                                                                        |   | 2,990                             |   | 3,040 |   |
| **Operating income**                                                                                                                                                                                                                                 |   | 622                               |   | 305 |   |
| Interest income                                                                                                                                                                                                                                      |   | 15                                |   | 19 |   |
| Interest expense                                                                                                                                                                                                                                     |   | (5                                | )      | (14 | ) |
| Foreign exchange loss                                       |   | (49                               | )      | (4 | ) |
| Income before income taxes                                                                                                                                                                                                                           |   | 583                               |   | 306 |   |
| Income tax expense                                                                                                                                                                                                                                   |   | (67                               | )      | (108) |   |
| **Net income**                                                                                                                                                                                                                                       |   | $                                 | 516    |   | $ | 198 |   |
|                                                                                                                                                                                                                                                 |   |                              |   |   |   |
| Basic and diluted net income per common  share                                                                                                                                                                                                       |   | $                                 | 0.23   |   | $ | 0.09 |   |
|                                                                                                                                                                                                                                                 |   |                              |   |   |   |
| Basic and diluted weighted average shares  outstanding                                                                                                                                                                                               |   | 2,291                             |   | 2,291 |   |

 

See accompanying notes toconsolidated financial statements.

 

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**ebix.com, Inc.**

**ConsolidatedStatements of Cash Flows**

(In thousands)

(Unaudited)

 
|                                                                                                |   | **Three  Months Ended March 31,** |   |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                                |   | **2003**                          |   | **2002** |   |
|                                                                                                |   |                              |   |   |   |
| **Cash flows from operating activities:**                                                           |   |                              |   |   |   |
| Net income                                                                                          |   | $                                 | 516    |   | $ | 198 |   |
| **Adjustments to reconcile net income to net****cash provided by (used in)  operating activities:** |   |                              |   |   |   |
| Depreciation and amortization                                                                       |   | 97                                |   | 90 |   |
| Stock-based compensation                                                                            |   | 6                                 |   | 2 |   |
| Provision for doubtful accounts                                                                     |   | 35                                |   | 175 |   |
| **Changes in assets and liabilities:**                                                              |   |                              |   |   |   |
| Accounts receivable                                                                                 |   | (495                              | )      | (450 | ) |
| Other assets                                                                                        |   | 126                               |   | (43 | ) |
| Accounts payable and accrued expenses                                                               |   | 111                               |   | (175 | ) |
| Accrued payroll and related benefits                                                                |   | 38                                |   | (29 | ) |
| Deposit liabilities, deferred revenue and  other liabilities                                        |   | 459                               |   | 130 |   |
| Net cash provided  by (used in) operating activities                                                |   | 893                               |   | (102 | ) |
| **Cash flows from investing activities:**                                                           |   |                              |   |   |   |
| Capital expenditures                                                                                |   | (120                              | )      | (25 | ) |
| Net cash used in  investing activities                                                              |   | (120                              | )      | (25 | ) |
| **Cash flows from financing activities:**                                                           |   |                              |   |   |   |
| Repayments of debt                                                                                  |   | —                            |   | (5 | ) |
| Principal payments under capital lease  obligations                                                 |   | (27                               | )      | (38 | ) |
| Net cash used in  financing activities                                                              |   | (27                               | )      | (43) |   |
| Effect of foreign exchange rates on cash                                                            |   | (36                               | )      | 16 |   |
| Net change in  cash and cash equivalents                                                            |   | 710                               |   | (154 | ) |
| Cash and cash  equivalents at the beginning of the period                                           |   | 4,993                             |   | 6,167 |   |
| Cash and cash  equivalents at the end of the period                                                 |   | $                                 | 5,703  |   | $ | 6,013 |   |
|                                                                                                |   |                              |   |   |   |
| **Supplemental disclosures of cash flow information:**                                              |   |                              |   |   |   |
| Interest paid                                                                                       |   | $                                 | 5      |   | $ | 11 |   |
| Income taxes paid                                                                                   |   | $                                 | — |   | $ | 20 |   |

 

See accompanying notes toconsolidated financial statements.

 

5

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ebix.com, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 1.   BASIS OF PRESENTATION AND SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

 

**Basis of presentation**– These consolidated financial statements are unaudited and reflect alladjustments (consisting only of normal recurring adjustments) which are, in theopinion of management, necessary for a fair presentation of the results of theinterim periods.

 

These consolidated financialstatements should be read in conjunction with the consolidated financialstatements, and accompanying notes thereto, included in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2002.

 

The results of operations forthe current interim period are not necessarily indicative of results to beexpected for the entire current year.

 

Certainprior period amounts have been reclassified to conform to the currentpresentation.

 

**Summary of significant accounting policies—**At March 31, 2003, the Company had threestock-based employee compensation plans. The Company accounts for stock optionsissued to employees in accordance with Accounting Principles Board (“APB”)Opinion No. 25, “Accounting for Stock Issued to Employees.” The Companyhas adopted the disclosure only provisions of Statement of Financial AccountingStandards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” foroptions and warrants issued to employees, as well as the requirement of SFASNo. 148, “Accounting for Stock Based Compensation — Transition and Disclosure”.Under APB Opinion No. 25, compensation expense is based on the difference,if any, on the measurement date, between the estimated fair value of theCompany’s stock and the exercise price of options to purchase that stock. Anyresulting compensation expense is amortized on a straight-line basis over thevesting period of the options.

 

The Company applies APB Opinion No. 25 and relatedInterpretations in accounting for its employee stock-based compensation plans.Had compensation cost for these stock-based compensation plans been determinedbased on the fair value method prescribed by SFAS No. 123, using theBlack-Scholes option-pricing model with the assumptions summarized in Note 13of the Company’s Annual Report on form 10-K, the Company’s net income (loss)and net income (loss) per share would have been the pro forma amounts indicatedbelow:

 

|                                                                                                                                          |   | **Three Months Ended** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                          |   | **March 31, 2003**     |    | **March 31, 2002** |   |
|                                                                                                                                          |   |                   |    |   |   |
| Net income as  reported                                                                                                                       |   | $                      | 516,000 |   | $ | 198,000 |   |
| Add:  Stock-based employee compensation expense included in reported net income,  net of related tax effects                                  |   | —                 |    | — |   |
| Deduct: Total  stock-based employee compensation expense determined under fair value based  method for all awards, net of related tax effects |   | (228,000               | )       | (186,000 | ) |
| Pro forma net  income                                                                                                                         |   | $                      | 288,000 |   | $ | 12,000 |   |
|                                                                                                                                          |   |                   |    |   |   |
| Basic and  diluted earnings  per share, as  reported                                                                                     |   | $                      | 0.23    |   | $ | 0.09 |   |
| Basic and  diluted earnings per share, pro forma                                                                                              |   | $                      | 0.13    |   | $ | 0.01 |   |

 

6

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Note 2.   STOCK OPTIONS

 

During the first quarter of2003, the Company did not grant any stock options.

 

The Company has grantednonstatutory and incentive options outside the Company’s stock option plans topurchase up to an aggregate of 32,000 shares, of which options to purchase25,470 shares were outstanding at March 31, 2003.  These options were granted at prices determined by the Board ofDirectors (at no less than 100 percent of the market price on the date ofgrant).  The options have a four-yearvesting period and must be exercised within ten years of the date of the grant.These non-employee options were valued using the fair value method asprescribed by SFAS No. 123 using the following assumptions: volatility of 146%,risk free interest rate of 4.14% and a 10 year term. Options issued prior to2001 are performance-based awards, with no service commitment and subject tovesting only if the Company’s stock price reaches a certain level. Optionsissued in 2001 vest over 4 years, but vesting accelerates if a performancetarget is achieved.  At March 31, 2003,non-employee options to purchase 20,256 shares were vested. The Companyrecognized compensation expense of approximately $6,000 and $2,000 related tothese options during the three-month periods ended March 31, 2003 and March 31,2002, respectively.

 

Note 3.   EARNINGS PER SHARE

 

Basic earnings per share(“EPS”) is equal to net income divided by the weighted average number of sharesof common stock outstanding for the period. Diluted EPS is calculated as if theCompany had additional common stock outstanding from the beginning of the yearor the date of grant for all common stock equivalents, net of assumed repurchasedshares using the treasury stock method. Diluted EPS recognizes the dilutive effect of common stock equivalentsand is equal to net income divided by the sum of the weighted average number ofshares outstanding and common stock equivalents. For the three months endedMarch 31, 2003, the Company’s common stock equivalents consisted of stockoptions.  For the three months endedMarch 31, 2002, the Company’s common stock equivalents consisted of stockoptions and warrants. For the three months ended March 31, 2003 and March 31,2002, there was no effect on the weighted average number of sharesoutstanding.  At March 31, 2003, therewere 600,593 shares potentially issuable with respect to stock options whichcould dilute Basic EPS in the future.

 

Note 4.   COMPREHENSIVE  INCOME

 
|                                                                       |   | **Three  Months Ended March 31,** |       |
|----------------------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                                       |   | **2003**                          |       | **2002** |   |
|                                                                       |   |                              | ** ** |   | ** ** |
| Net income                                                                 |   | $                                 | 516,000    |   | $ | 198,000 |   |
| Other comprehensive income – foreign  currency translation adjustment |   | (36,000                           | )          | 16,000 |   |
| Comprehensive income                                                       |   | $                                 | 480,000    |   | $ | 214,000 |   |

 

Note 5.   RELATED PARTY TRANSACTIONS

 

On April 27, 2001, the Company consummated the first closingcontemplated by an agreement with BRiT Insurance Holdings PLC (“BRiT”).  Pursuant to the agreement, ebix issued280,000 shares of its common stock to BRiT for $2,800,000.  As a result of the first closing, BRiTacquired an approximate 16.4 percent equity ownership interest in the Company,becoming its largest stockholder. On June 29, 2001, the Company consummated a secondand final closing with BRiT.  Pursuantto this closing, ebix issued 588,000 shares of ebix common stock to BRiT inreturn for cash consideration of $4,200,000 and BRiT’s transfer to ebix ofapproximately half of its common stock investment in Insurance BroadcastSystems Inc. (“IBS”), representing a 28 percent equity ownership interest inIBS. This final closing brought BRiT’s total cash investment in ebix to$7,000,000 and increased its equity ownership to approximately 38 percent. The total shares held by BRiT at March 31, 2003was 930,163, representing an equity ownership of 40.6 percent.

 

During2002, the Company entered into various software and service agreements withBRiT. During the first quarter of 2003, approximately $805,000 was recognizedas revenue from BRiT and its affiliates. Total accounts receivable from BRiTand its affiliates at March 31, 2003 were $852,000. During the first quarter of2002, approximately $607,000 was recognized as revenue from BRiT and itsaffiliates. Total accounts receivable from BRiT and its affiliates at March 31,2002 were $670,000.

 

7

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Note 6.   REVERSE STOCK SPLIT

 

On October 1, 2002, theCompany’s common stock began trading on a 1-for-8 reverse split basis. TheCompany’s stockholders approved the reverse split at a special meeting ofstockholders held on September 30, 2002. The reverse split was intended to return the Company to compliance withthe continued listing standards of the NASDAQ SmallCap Market, in particularthe minimum bid price requirement.  Allshare information in these consolidated financial statements and footnotes havebeen retroactively adjusted to reflect the reverse stock split.

 

Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following informationshould be read in conjunction with the unaudited consolidated financialstatements and the notes thereto included in Part 1, Item 1 of this QuarterlyReport, and the audited consolidated financial statements and notes thereto andManagement’s Discussion and Analysis of Financial Condition and Results ofOperations contained in the Company’s Annual Report on Form 10-K for the yearended December 31, 2002.

 

**Critical Accounting Policies**

 

The Company’s  “criticalaccounting policies” are those that require application of management’s mostdifficult, subjective or complex judgements, often as a result of the need tomake estimates about matters that are inherently uncertain and may change infuture periods. We have identified the following as our critical accountingpolicies: revenue recognition and estimating the allowance for doubtfulaccounts receivable. For a discussion of these policies, see “Management’sDiscussion and Analysis of Financial Condition and Results of Operations –Critical Accounting Policies” in the Company’s annual report on Form 10-K forthe year ended December 31, 2002.

 

**Liquidity and Capital Resources**

 

The Company had cash and cashequivalents of $5,703,000 at March 31, 2003, compared to $4,993,000 at December31, 2002.

 

During the three months endedMarch 31, 2003, the Company experienced positive operating cash flow of$893,000. This increase in positive cash flow from operations resultedprimarily from net income for the quarter of $516,000 and deferred revenuetransferred to revenue of $459,000 partially offset by an increase in accountsreceivable of $495,000.

 

Cash used in investingactivities of $120,000 represented capital expenditures made primarily as aresult of the Company’s investment in India and the related purchase of assetsfor that location.  Cash used infinancing activities of $27,000 resulted from the Company’s repayment of debtobligations.

 

The Company believes thatfuture revenue growth will come from development projects, ebixASP,ebixExchange and call center services. The Company believes its cash balancesand funds from operations will be sufficient to meet all of its anticipatedcash requirements for at least the next 12 months.

 

# **The following summarizes our contractual obligations at March 31, 2003,and the effect such obligations are expected to have on the Company's liquidityand cash in future periods (in thousands):**

 
|                               |   |      |   | **Payments  Due by Period** |   |
|------------------------------------|--------|-----------|--------|-----------------------------|--------|
| **Contractual  Obligations:**      |   | **Total** |   | **Less Than  1 Year**       |   | **1 - 3  Years** |   | **After  3 Years** |   |
|                               |   |      |   |                        |   |   |   |   |   |
| Non-compete note payable           |   | $         | 106    |                        | $      | 106 |   | $ | — |   | $ | — |   |
|                               |   |      |   |                        |   |   |   |   |   |
| Non-cancelable operating leases    |   | 914       |   | 471                         |   | 443 |   | — |   |
|                               |   |      |   |                        |   |   |   |   |   |
| Non-cancelable capital leases      |   | 160       |   | 118                         |   | 42 |   | — |   |
|                               |   |      |   |                        |   |   |   |   |   |
| Total contractual cash obligations |   | $         | 1,180  |                        | $      | 695 |   | $ | 485 |   | $ | — |   |

 

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**Results of Operations**

 

**Three Month Period Ended March 31, 2003Compared to the Three Month Period Ended March 31, 2002**

 

**Total Revenue** - TheCompany’s revenue is derived from the licensing and sale of proprietarysoftware and third party software (“Software”) and from professional servicesand support services (“Services”). Professional services include consulting,implementation, training and project management provided to the Company’scustomers with installed systems and those in the process of installingsystems. Also included in Services are fees for software license maintenance,initial registration and ongoing monthly subscription fees for the ebixASPproduct, fees for policy acceptance and transaction fees generated from theebix.mall website, as well as software development and call center revenue.Total revenue for the quarter ended March 31, 2003 increased $267,000, or 8.0%,to $3,612,000 from $3,345,000 for the comparable quarter of the prior year.

 

**Software Revenue** -Software revenue is comprised of revenue from the sale of ebix (formerly “cd”)products, current legacy products, and other third party software.  Total software revenue for the first quarterof 2003 decreased $215,000 or 50.6%, from $425,000 for the comparable quarterof the prior year. As the Company has changed its focus to e-commerce productsand services, the Company expects the substantial majority of future revenue toconsist of services revenue.

 

**Services Revenue** —Total services revenue for the first quarter of 2003 increased $482,000, or16.5%, from $2,920,000 for the comparable quarter of the prior year.  This increase was due to call center revenueof $214,000, self hosted ebixASP revenue of $293,000 and hosted ebixASP revenueof $186,000, partially offset by a decrease in INS-Site revenue and decrease insupport revenue associated with legacy products.

 

The support revenue associatedwith the legacy products is decreasing due to a trend of declining renewals forthese older product offerings. The Company expects that future services revenuewill be derived from this support, as well as ebixASP registration and monthlyfees, software development, conversion, training, call center and alltransaction revenues from ebix.mall and ebixExchange (INS-Site).

 

During the first quarter of2003 and 2002, approximately $805,000 and $607,000, respectively, wasrecognized as services revenue from BRiT Insurance Holdings PLC("BRiT") and its affiliates. BRiT owns approximately 41% of the Company's common stock.

 

**Services and other costs**-Cost of services revenue includes costs associated with support, consulting,implementation and training services. Total services and other costs for the quarter increased $13,000 or 1.3%,from $992,000 for the comparable quarter of the prior year.  This increase was due to an increase inservices revenue.  Due to the change inproduct mix comprising services and other costs, the products with higher costsare a lower percentage of the total, resulting in approximately the same totalcosts on higher revenues.

 

**Product Development Expenses**-Total product development expenses for the first quarter of 2003 decreased$291,000, or 44.7%, from $651,000 for the comparable quarter of the prior year.The Company has established a wholly owned subsidiary located in Delhi,India.  In May 2002, the Company beganto redirect product development activities to this subsidiary that werepreviously outsourced, resulting in lower development costs.

 

**Sales and Marketing Expenses**-Total sales and marketing expenses for the first quarter of 2003 decreased$54,000, or 10.5%, from $515,000 for the comparable quarter of the prioryear.   This decrease was attributableto reduced spending on website related marketing and public relation expenses.

 

**General and Administrative Expenses**—Total general and administrative expenses for the quarter increased $282,000,or 32.0%, from $882,000 for the comparable quarter of the prior year.  This increase was due to a benefit recordedin first quarter 2002 related to the reversal of a royalty expense and anincrease in costs related to the Company’s operations in India, which wereestablished in May 2002.

 

**Safe Harbor for Forward-Looking Statementsunder the Securities Litigation Reform Act of 1995** -This Quarterly Report on Form 10-Q contains various forward-looking statementsand information that are based on management’s beliefs, as well as assumptionsmade by, and information currently available to management, including statementsregarding future economic performance and financial condition, liquidity andcapital resources, acceptance of the Company’s products by the market andmanagement’s plans and objectives. The Company has tried to identify suchforward looking statements by use of words such as “expects,” “intends,”“anticipates,” “plans,” and  “believes”and similar expressions, but these words are not the exclusive means ofidentifying such statements. The forward looking statements included in thisQuarterly Report are subject to various risks, uncertainties and other factorswhich could cause actual results to vary materially from those expressed in, orimplied by, the forward looking statements. Such risks, uncertainties and other factors include those discussed in“Risk Factors” below. Except as expressly required by the federal securitieslaws, the Company undertakes no obligation to update any such factors or topublicly announce the results of any of the forward-looking statementscontained herein to reflect changed circumstances or future events ordevelopments or for any other reason.

 

9

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**Risk Factors**

 

You should carefully consider the risks,uncertainties and other factors described below because they could materiallyand adversely affect our business, financial condition, operating results andprospectus, and/or the market price of our common stock. This risk factorssection is written in response to the Securities and Exchange Commission’s“plain English” guidelines. In this section the words “we,” “us,’ “our” and“ours” refer only to the Company and its subsidiaries and not any other person.

 

***Risks Related To Our Business and OurIndustry***

 

**You may have difficulty evaluating ourbusiness because of our limited history of operating an Internet business.**

 

Although our predecessor began operations in1976, we did not begin any Internet operations until September 1999 anddid not begin generating revenues from these operations until the fourthquarter of 2000. Accordingly, we have a limited history in operating ourInternet business on which you can evaluate our company and prospects. Wecannot be certain that our Internet business strategy will be successful,because this strategy is new. Our early-stage Internet operations will beparticularly susceptible to the risks and uncertainties described in these riskfactors and likely to incur the expenses associated with addressing them. Ourprospects must be considered in light of the risks, uncertainties, expenses anddifficulties frequently encountered by companies in a transitional stage ofdevelopment, particularly companies in new and rapidly evolving markets, suchas electronic commerce, and using new and unproven business models.

 

**Because the support revenue that we havetraditionally relied upon has been steadily declining, it is important that newsources of revenue continue to be developed.**

 

Our revenue from the support services weoffer in connection with our legacy software products has been decreasingsignificantly over the course of the past few years. This decline can beattributed to the fact that many of our support clients are not renewing theirsupport agreements with us, in many cases because they are no longer using ourlegacy software. Even if they are continuing to use our legacy software, oursupport clients may choose not to renew their support agreements if theirlegacy software products no longer require support or they use third partysupport. In addition, some of the clients who use our support services havereduced the level of support that we provide them, which in turn reduces oursupport revenue. This downward trend in our support revenue makes usparticularly dependent upon our other sources of revenue. The new product linesand service offerings of our business are producing revenue but at a slowergrowth rate due to current economic conditions.

 

**One customer currently provides approximately18% of our total revenue.**

 

Revenues fromone customer, who owns approximately 41% of our common stock, representedapproximately 15% of our total revenue in 2002 and approximately 18% in thethree months ended March 31, 2003. If revenues from this customer were todiscontinue, our operating results could be adversely affected.

 

**Adverse insurance industry economics couldadversely effect our revenues.**

 

We are dependent on the insurance industry,which may be adversely effected by current economic and world conditions.

 

**Our operating results may fluctuatedramatically.**

 

Our quarterly operating results may fluctuatesignificantly in the future due to a variety of factors that could affect ourrevenues or our expenses in any particular quarter. You should not rely on ourresults of operations during any particular quarter as an indication of ourresults for a full year or any other quarter. Factors that may affect ourquarterly results include:

 

•                                          Changes in insurance agents and carriers consumeracceptance of Internet commerce.

 

•                                          Loss of a significant insurance agent, carrier orbroker relationship or the merger of any of our participating insurancecarriers with one another.

 

•                                          Technical difficulties for our e-commerce servicesthat hamper an agent’s ability to run its agency system hosted by us.

 

Our operating expenses are based in part onour expectations of our future revenues and are relatively fixed in the shortterm. We may be unable to adjust spending quickly enough to offset anyunexpected revenue shortfall.

 

**We could be subject to civil fines andpenalties as a result of the SEC’s investigation of our financial reporting.**

 

On August 11, 2000, we were advised thatthe SEC had issued a formal Order of Investigation and subpoenaed documentsrelating to our financial reporting since April 1, 1997, including, inparticular, revenue recognition, software development cost

 

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capitalization, royalty costs and classification of cash receipts. Wehave submitted documents to the SEC upon the SEC’s request as part of theinvestigation. It is possible that the SEC could impose civil fines andpenalties against us. An adverse finding against us by the SEC could negativelyimpact our stock price. In addition, we expect to continue to incur expensesassociated with responding to this investigation, regardless of its outcome,and this investigation may divert the efforts and attention of our managementteam from normal business operations.

 

**We cannot predict our future capital needsand we may not be able to secure additional financing when we need it.**

 

We may need to raise additional funds in thefuture in order to fund more aggressive brand promotion or more rapidexpansion, to develop new or enhanced services, to respond to competitivepressures or to make acquisitions. Any required additional financing may not beavailable on terms favorable to us, or at all. If adequate funds are notavailable on acceptable terms, we may be unable to meet our business orstrategic objectives or compete effectively. If additional funds are raised byour issuing equity securities, stockholders may experience dilution of theirownership interests, and the newly issued securities may have rights superiorto those of our common stock. If additional funds are raised by our issuingdebt, we may be subject to limitations on our activities.

 

**Any acquisitions that we undertake could bedifficult to integrate, disrupt our business, dilute stockholder value and harmour operating results.**

 

We may acquire or make investments incomplementary businesses, technologies, services or products if appropriateopportunities arise. The process of integrating any acquired business,technology, service or product into our business and operations may result inunforeseen operating difficulties and expenditures. Integration of an acquiredcompany also may consume much of our management’s time and attention that couldotherwise be available for ongoing development of our business. Moreover, theanticipated benefits of any acquisition may not be realized. Furthermore, wemay be unable to identify, negotiate or finance future acquisitionssuccessfully. Future acquisitions could result in potentially dilutiveissuances of equity securities or the incurrence of debt, contingentliabilities or amortization expenses related to intangible assets.

 

**We may not be able to continue to develop newproducts to effectively adjust for rapid technological changes.**

 

To be successful, we must adapt to rapidlychanging technological and market needs, by continually enhancing our websiteand introducing new products and services to address our users’ changingdemands.

 

Our segment in the internet market place ischaracterized by:

 

•                                          rapidly changing technology;

 

•                                          evolving industry standards;

 

•                                          frequent new product and service introductions;

 

•                                          shifting distribution channels; and

 

•                                          changing customer demands.

 

Our future success will depend on our abilityto adapt to this rapidly evolving marketplace. We could incur substantial costsif we need to modify our services or infrastructure in order to adapt tochanges affecting our market, and we may be unable to adapt to these changes.

 

**The markets for our products are highlycompetitive and are likely to become more competitive, and our competitors maybe able to respond more quickly to new or emerging technology and changes incustomer requirements.**

 

We operate in highly competitive markets. Inparticular, the online insurance distribution market, like the broaderelectronic commerce market, is rapidly evolving and highly competitive. Oursoftware business also experiences some competition from certain large hardwaresuppliers that sell systems and systems’ components to independent agencies andfrom small, independent or freelance developers and suppliers of software, whosometimes work in concert with hardware vendors to supply systems to independentagencies. Our Internet business may also face indirect competition frominsurance carriers that have subsidiaries which perform in-house agency andbrokerage functions.

 

Some of our current competitors have longeroperating histories, larger customer bases, greater brand recognition andsignificantly greater financial, marketing and other resources than we do. Inaddition, we believe we will face increasing competition as the onlinefinancial services industry develops and evolves. Our current and futurecompetitors may be able to:

 

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•                                          undertake more extensive marketing campaigns fortheir brands and services;

 

•                                          devote more resources to website and systemsdevelopment;

 

•                                          adopt more aggressive pricing policies; and

 

•                                          make more attractive offers to potentialemployees, online companies and third-party service providers.

 

**If we are unable to protect our intellectualproperty, our reputation and competitiveness in the marketplace may bematerially damaged.**

 

We regard our intellectual property ingeneral and our software in particular as critical to our success. It may bepossible for third parties to copy aspects of our products or, withoutauthorization, to obtain and use information which we regard as trade secrets.Existing copyright law affords only limited practical protections, and oursoftware is unpatented.

 

**If we infringe on the proprietary rights ofothers, we may be at a competitive disadvantage and any related litigationcould be time consuming and costly.**

 

Third parties may claim that we have violatedtheir intellectual property rights. For example, companies have brought claimsregarding alleged infringement of patent rights relating to methods of doingbusiness over the Internet. To the extent that we violate a patent or otherintellectual property right of a third party, we may be prevented fromoperating our business as planned, and we may be required to pay damages, toobtain a license, if available, or to use a non-infringing method, if possible,to accomplish our objectives. Any of these claims, with or without merit, couldsubject us to costly litigation and divert the attention of key personnel.

 

**We depend on the continued service of oursenior management and our ability to attract and retain other key personnel**.

 

Our future success is substantially dependenton the continued service and continuing contributions of our senior managementand other key personnel, particularly Robin Raina, our President and ChiefExecutive Officer, and Richard J. Baum, our Executive VicePresident—Finance & Administration, Chief Financial Officer andSecretary. The loss of the service of any of our executive officers or otherkey employees could harm our business. We have no long-term employmentagreements with any of our key personnel, nor do we maintain key man lifeinsurance policies on any of our key employees.

 

Our future success depends on our continuingto attract, retain and motivate highly skilled employees. If we are not able toattract and retain new personnel, our business will be harmed. Competition forpersonnel in our industry is intense. We may be unable to retain our keyemployees or attract, assimilate or retain other highly qualified employees inthe future.

 

**Our international operations are subject to anumber of risks that could affect our income and growth.**

 

We market our software internationally andplan to expand our Internet services to locations outside of the United States.In addition, during 2002 we expanded our development activities and otheroperations in India. Our international operations may not produce enoughrevenue to justify our investments in establishing them and are subject toother inherent risks, including:

 

•                                          the impact of recessions in foreign economies onthe level of consumers’ insurance shopping and purchasing behavior;

 

•                                          greater difficulty in collecting accountsreceivable;

 

•                                          difficulties and costs of staffing and managingforeign operations;

 

•                                          reduced protection for intellectual propertyrights in some countries;

 

•                                          seasonal reductions in business activity duringthe summer months in Europe and other parts of the world;

 

•                                          burdensome regulatory requirements or other tradebarriers;

 

•                                          fluctuations in exchange rates;

 

•                                          potentially adverse tax consequences; and

 

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•                                          political and economic instability.

 

Furthermore, our entry into additionalinternational markets could require significant management attention andfinancial resources, which could lessen our ability to manage our existingbusiness effectively.

 

**Laws and regulations that govern theinsurance industry could expose us or the agents, brokers and carriers whoparticipate in our online marketplace to legal penalties.**

 

We perform functions for licensed insuranceagents, brokers and carriers and are, therefore, required to comply with acomplex set of rules and regulations that often vary from state to state. Theserules and regulations can be difficult to comply with and are ambiguous andopen to interpretation. If we fail to properly interpret and/or comply withthese rules and regulations, we, the insurance agents, brokers or carriersdoing business with us, our officers, or agents with whom we contract could besubject to various sanctions, including censure, fines, cease-and-desistorders, loss of license or other penalties. This risk, as well as other lawsand regulations affecting our business and changes in the regulatory climate orthe enforcement or interpretation of existing law, could expose us toadditional costs, including indemnification of participating insurance agents,brokers or carriers for their costs, and could require changes to our businessor otherwise harm our business. Furthermore, because the application of onlinecommerce to the consumer insurance market is relatively new, the impact ofcurrent or future regulations on our business is difficult to anticipate. Tothe extent that there are changes in the rules and regulations regarding themanner in which insurance is sold, our business could be adversely affected.

 

**The inability to predict the full impact ofcompliance with federal and state laws concerning the privacy of healthinformation could expose us to significant increases in operating costs orsubject us to civil and criminal penalties.**

 

The insurance carriers that offer healthcarecoverage through our online marketplace will be significantly affected by theenacted privacy regulations under the Health Insurance Portability andAccountability Act of 1996 (HIPAA). The HIPAA privacy regulations impose broadprivacy protection obligations on entities that use, access and disclose healthinformation. Each health plan that provides for or pays the cost of medicalcare will be directly regulated by and required to comply with, the privacy andsecurity requirements of HIPAA. Although not directly regulated by HIPAA, wewill be affected as a business associate of these health plans because weperform functions on their behalf and as a result receive and have access toindividually identifiable health information. As a business associate we willbe required to provide satisfactory assurance to these health plans that wewill protect the health information submitted through our online marketplace bypotential insureds as if we were directly regulated by HIPAA, which assurancemay require us to implement costly physical and technology safeguards. Inaddition, the laws in most states are rapidly evolving with respect to theconfidentiality of health information, and some states have enacted comprehensivehealth privacy laws. Our failure to comply with federal and state laws relatingto health information privacy could subject us to significant civil andcriminal penalties, including individual rights of action through privatelitigation, or otherwise harm our business or reputation.

 

***Risks Related to Our Conduct of Business onThe Internet***

 

**Any disruption of our internet connectionscould affect the success of our internet based products**.

 

Any system failure, including network,software or hardware failure, that causes an interruption in our network or adecrease in responsiveness of our website could result in reduced user trafficand reduced revenue. Continued growth in Internet usage could cause a decreasein the quality of Internet connection service. Websites have experiencedservice interruptions as a result of outages and other delays occurringthroughout the Internet network infrastructure. In addition, there have beenseveral incidents in which individuals have intentionally caused servicedisruptions of major e-commerce websites. If these outages, delays or servicedisruptions occur frequently in the future, usage of our website could growmore slowly than anticipated or decline, and we may lose revenues andcustomers.

 

If the computer hardware operations that hostour website were to experience a system failure, the performance of our websitewould be harmed. These systems are also vulnerable to damage from fire, floods,earthquakes, acts of terrorism, power loss, telecommunications failures,break-ins and similar events. Our property and business interruption insurancecoverage may not be adequate to compensate us for all losses that may occur. Inaddition, our users depend on Internet service providers, online serviceproviders and other website operators for access to our website. Each of theseproviders has experienced significant outages in the past, and could experienceoutages, delays and other difficulties due to system failures unrelated to oursystems.

 

**Concerns regarding security of transactionsor the transmission of confidential information over the Internet or securityproblems we experience may prevent us from expanding our business or subject usto legal exposure.**

 

If we do not offer sufficient securityfeatures in our online product and service offerings, our products and servicesmay not gain market acceptance, and we could be exposed to legal liability.Despite the measures that we may take, our infrastructure will be potentiallyvulnerable to physical or electronic break-ins, computer viruses or similarproblems. If a person circumvents our security measures, that person couldmisappropriate proprietary information or disrupt or damage our operations.Security breaches that result

 

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in access to confidential information could damage our reputation andsubject us to a risk of loss or liability. We may be required to makesignificant expenditure, to protect against or remedy security breaches.Additionally, as e-commerce becomes more widespread, our customers may becomemore concerned about security. If we are unable to adequately address theseconcerns, we may have more difficulty selling our goods and services.

 

**Uncertainty in the marketplace regarding theuse of Internet users’ personal information, or proposed legislation limitingsuch use, could reduce demand for our services and result in increasedexpenses.**

 

Concern among consumers and legislatorsregarding the use of personal information gathered from Internet users couldcreate uncertainty in the marketplace. This could reduce demand for ourservices, increase the cost of doing business as a result of litigation costsor increased service delivery costs, or otherwise harm our business.Legislation has been proposed that would limit the users of personallyidentifiable information of Internet users gathered online or require onlineservices to establish privacy policies. Many state insurance codes limit thecollection and use of personal information by insurance agencies, brokers andcarriers or insurance service organizations. Moreover, the Federal TradeCommission has settled a proceeding against one online service that agreed inthe settlement to limit the manner in which personal information could becollected from users and provided to third parties.

 

**Future government regulation of the Internetcould place financial burdens on our businesses.**

 

Because of the Internet’s popularity andincreasing use, new laws and regulations directed specifically at e-commercemay be adopted. These laws and regulations may cover issues such as thecollection and use of data from website visitors, including the placing ofsmall information files, or “cookies,” on a user’s hard drive to gatherinformation, and related privacy issues; pricing; taxation; telecommunicationsover the Internet; content; copyrights; distribution; domain name piracy; andquality of products and services. The enactment of any additional laws orregulations, including international laws and regulations, could impede thegrowth of our revenue from our Internet operations and place additionalfinancial burdens on our business.

 

***Risks Related To Our Common Stock***

 

**The price of our common stock may beextremely volatile.**

 

In some future periods, our results ofoperations may be below the expectations of public market investors, whichcould negatively affect the market price of our common stock. Furthermore, thestock market in general has recently experienced extreme price and volumefluctuations. We believe that, in the future, the market price of our commonstock could fluctuate widely due to variations in our performance and operatingresults or because of any of the following factors which are, in large part,beyond our control:

 

•                                          announcements of new services, products,technological innovations, acquisitions or strategic relationships by us or ourcompetitors;

 

•                                          trends or conditions in the insurance, softwareand Internet markets;

 

•                                          changes in market valuations of our competitors;and

 

•                                          general political, economic and market conditions.

 

In addition, the market prices of securitiesof technology companies, including our own, have been volatile and haveexperienced fluctuations that have often been unrelated or disproportionate tooperating performance. As a result, you may not be able to sell shares of ourcommon stock at or above the price at which you purchase them. In the past,following periods of volatility in the market price of a company’s securities,securities class action litigation has often been instituted against thatcompany. If any securities litigation is initiated against us, we could incursubstantial costs and our management’s attention and resources could bediverted from our business.

 

**The significant concentration of ownership ofour common stock will limit your ability to influence corporate actions.**

 

The concentration of ownership of our commonstock may have the effect of delaying, preventing or deterring a change incontrol of ebix.com, could deprive our stockholders of an opportunity to receivea premium for their common stock as part of a sale of ebix.com and may affectthe market price of our common stock. At May 8, 2003, BRiT InsuranceHoldings plc held approximately 41% of our outstanding common stock and,together with our executive officers and directors, beneficially owned inexcess of 50% of our outstanding common stock. As a result, those stockholders,if they act together are able to control all matters requiring stockholderapproval, including the election of all directors and approval of significantcorporate transactions and amendments to our certificate of

 

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incorporation. These stockholders may use their ownership position toapprove or take actions that are adverse to your interests or prevent thetaking of actions that are consistent with your interests.

 

**We may issue equity securities in the futurewhose terms and rights are superior to those of our common stock.**

 

Our certificate of incorporation authorizesthe issuance of up to 2,000,000 shares of preferred stock. No shares ofpreferred stock are currently outstanding. However, shares of preferred stockmay be issued by our board of directors from time to time in one or more seriesfor the consideration, and with the rights and preferences, as our board ofdirectors decides. Any shares of preferred stock that we may issue in thefuture could be given voting and conversion rights that could dilute the votingpower and equity of holders of shares of our common stock and have preferencesover the common stock with respect to dividends and in liquidation.

 

**Provisions in our charter and Delaware lawmay discourage takeover attempts which could preclude our stockholders fromreceiving a change of control premium.**

 

Our certificate of incorporation could makeit more difficult for a third party to acquire control of us because it givesour Board of Directors the ability to issue shares of preferred stock withrights as they deem appropriate without stockholder approval. In addition, Delawarelaw contains an anti-takeover provision that could have the effect of delayingor preventing a change in control that stockholders may consider favorable.This provision prohibits us from engaging in a business combination with anysignificant stockholder for a period of three years from the date the personbecame a significant stockholder unless specific conditions are met.

 

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK

 

There have been no materialchanges in the Company’s market risk during the three months ended March 31,2003.  For additional information onmarket risk, refer to the “Quantitative and Qualitative Disclosures AboutMarket Risk” section of the Company’s Annual Report on Form 10-K for the yearended December 31, 2002.

 

Item 4.     CONTROLS AND PROCEDURES

 

a.                 Evaluation of Disclosure Controls and Procedures

 

Based ontheir evaluation of our disclosure controls and procedures conducted within 90days of the date of filing this report on Form 10-Q, our Chief Executive Officerand the Chief Financial Officer have concluded that our disclosure controls andprocedures (as defined in Rules 13a-14(c) and 15d-14(c) promulgated under theSecurities Exchange Act of 1934) are effective.

 

b.                Changes in Internal Controls

 

Therewere no significant changes in our internal controls or in other factors thatcould significantly affect these controls subsequent to the date of theirevaluation.

 

Part II — OTHER INFORMATION

 

Item 6.     EXHIBITS AND REPORTS ON FORM 8-K

 

(a)                          Exhibits

 

99.1                   Certificationof Chief Executive Officer Pursuant to Section 906 of the Sabanes-Oxley Act of2002.

 

99.2                   Certificationof Chief Financial Officer Pursuant to Section 906 of the Sabanes-Oxley Act of2002.

 

(b)                         Reportson Form 8-K

 

The Company did not file anycurrent reports on Form 8-K during the first quarter of 2003.

 

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SIGNATURES

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934, the Registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized.

 
|                |   | ebix.com,  Inc. |
|---------------------|--------|-----------------|
|                |   |            |   |
|                |   |            |   |
| Date: May  14, 2003 |   | By              |   |
|                |   |            | /s/ RICHARD  J. BAUM |
|                |   |            | Richard J.  Baum |
|                |   |            | Executive  Vice President — Finance & Administration, Chief Financial Officer  (principal financial and accounting officer), and Secretary |

 

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CERTIFICATIONS

 

I, Robin Raina, certify that:

 

1. I have reviewed thisquarterly report on Form 10-Q of ebix.com, Inc.;

 

2. Based on my knowledge, thisquarterly report does not contain any untrue statement of a material fact oromit to state a material fact necessary to make the statements made, in lightof the circumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3. Based on my knowledge, thefinancial statements, and other financial information included in thisquarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this quarterly report;

 

4. The registrant’s othercertifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and15d-14) for the registrant and have:

 

a) Designed such disclosurecontrols and procedures to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b) Evaluated the effectivenessof the registrant’s disclosure controls and procedures as of a date within 90days prior to the filing date of this quarterly report (the “Evaluation Date”);and

 

c) Presented in this quarterlyreport our conclusions about the effectiveness of the disclosure controls andprocedures based on our evaluation as of the Evaluation Date;

 

5. The registrant’s othercertifying officer and I have disclosed, based on our most recent evaluation,to the registrant’s auditors and the audit committee of registrant’s board ofdirectors (or persons performing the equivalent functions):

 

a) All significant deficienciesin the design or operation of internal controls which could adversely affectthe registrant’s ability to record, process, summarize and report financialdata and have identified for the registrant’s auditors any material weaknessesin internal controls; and

 

b) Any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrant’s internal controls; and

 

6. The registrant’s othercertifying officer and I have indicated in this quarterly report whether or notthere were significant changes in internal controls or in other factors thatcould significantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Date:  | May 14, 2003 |   | /s/ ROBIN RAINA                                               |   |
|--------|--------------|--------|---------------------------------------------------------------|--------|
|   |         |   | Robin Raina                                                   |
|   |         |   | Chairman of  the Board, Chief Executive Officer and President |

 

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I, Richard J. Baum, certifythat:

 

1. I have reviewed thisquarterly report on Form 10-Q of ebix.com, Inc.;

 

2. Based on my knowledge, thisquarterly report does not contain any untrue statement of a material fact oromit to state a material fact necessary to make the statements made, in lightof the circumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3. Based on my knowledge, thefinancial statements, and other financial information included in thisquarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this quarterly report;

 

4. The registrant’s othercertifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and15d-14) for the registrant and have:

 

a) Designed such disclosurecontrols and procedures to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b) Evaluated the effectivenessof the registrant’s disclosure controls and procedures as of a date within 90days prior to the filing date of this quarterly report (the “Evaluation Date”);and

 

c) Presented in this quarterlyreport our conclusions about the effectiveness of the disclosure controls andprocedures based on our evaluation as of the Evaluation Date;

 

5. The registrant’s othercertifying officer and I have disclosed, based on our most recent evaluation,to the registrant’s auditors and the audit committee of registrant’s board ofdirectors (or persons performing the equivalent functions):

 

a) All significant deficienciesin the design or operation of internal controls which could adversely affectthe registrant’s ability to record, process, summarize and report financialdata and have identified for the registrant’s auditors any material weaknessesin internal controls; and

 

b) Any fraud, whether or notmaterial, that involves management or other employees who have a significantrole in the registrant’s internal controls; and

 

6. The registrant’s othercertifying officer and I have indicated in this quarterly report whether or notthere were significant changes in internal controls or in other factors thatcould significantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Date: May  14, 2003 | /s/ RICHARD  J. BAUM                                                                                  |   |
|---------------------|-------------------------------------------------------------------------------------------------------|--------|
|                | Richard J.  Baum                                                                                      |
|                | Executive  Vice President – Finance & Administration, Chief  Financial Officer and Secretary |

 

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EXHIBIT INDEX

 
| **EXHIBIT NO.** |   | **DESCRIPTION**                                                                                      |
|-----------------|--------|------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                 |
| 99.1            |   | Certification  of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act  of 2002 |
| 99.2            |   | Certification  of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act  of 2002 |

 

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