** **

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C.20549

**FORM 10-Q**
| **x**                                             | ** ** | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**        |
|---------------------------------------------------|------------|----------------------------------------------------------------------------------------------------|
|                                              |       |                                                                                               |
| **For the  quarterly period ended June 30, 2007** |
|                                              | ** ** | ** **                                                                                         |
| **OR**                                            |
|                                              |       |                                                                                               |
| **o**                                             | ** ** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**Commissionfile number 0-15946**

**Ebix, Inc.**(Exactname of registrant as specified in its charter)

| **DELAWARE**                     |   | **77-0021975**                        |
|----------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer  Identification No.) |
| incorporation or  organization)  |   |                                  |

 
| **5 CONCOURSE PARKWAY, SUITE 3200**       |   | ** ** |
|-------------------------------------------|--------|------------|
| **ATLANTA,  GEORGIA**                     |   | **30328**  |
| (Address of  principal executive offices) |   | (Zip Code) |

 

Registrant’s telephone number, including area code: **678-281-2020**

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 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  x    No  o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act.

Large acceleratedfiler  o                   Accelerated filer  o             Non-accelerated filer  x

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).   Yes  o   No  x

As of August 10, 2007,the number of shares of Common Stock outstanding was 3,269,855.

 

 

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**Ebix, Inc. and Subsidiaries**

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2007

INDEX
| PART I — FINANCIAL  INFORMATION                                                                               |   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                               |   |   |
| Item 1. Consolidated Financial Statements                                                                          |   |   |
|                                                                                                               |   |   |
| Condensed Consolidated Balance Sheets at June 30, 2007  (unaudited) and December 31, 2006                     |   |   |
|                                                                                                               |   |   |
| Condensed Consolidated Statements of Income for the  Three and Six Months ended June 30, 2007 and 2006 (unaudited) |   |   |
|                                                                                                               |   |   |
| Condensed Consolidated Statements of Cash Flows for  the Six Months ended June 30, 2007 and 2006 (unaudited)       |   |   |
|                                                                                                               |   |   |
| Notes to Condensed 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  1. Legal Proceedings                                                                                         |   |   |
|                                                                                                               |   |   |
| Item  1A. Risk Factors                                                                                             |   |   |
|                                                                                                               |   |   |
| Item 2. Unregistered Sales of Equity Securities and  Use of Proceeds                                               |   |   |
|                                                                                                               |   |   |
| Item 3. Defaults Upon Senior Securities                                                                            |   |   |
|                                                                                                               |   |   |
| Item 4. Submission Of Matters To A Vote Of Securities  Holders                                                     |   |   |
|                                                                                                               |   |   |
| Item  5. Other Information                                                                                         |   |   |
|                                                                                                               |   |   |
| Item 6.  Exhibits                                                                                                  |   |   |
|                                                                                                               |   |   |
| SIGNATURES                                                                                                         |   |   |

 

 

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**PART I — FINANCIALINFORMATION**

**ITEM1 — CONSOLIDATED FINANCIAL STATEMENTS**

**Ebix, Inc. and Subsidiaries**

**Condensed Consolidated Balance Sheets**

(In thousands, except for share and per share amounts)
| ** **                                                                                                                                       | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                                                                                                                       | ** ** | **(Unaudited**)         | ** ** | ** **                  | ** ** |
| **ASSETS**                                                                                                                                       | ** ** |                    | ** ** | ** **                  |       | ** ** | ** ** |
| **Current assets:**                                                                                                                              | ** ** |                    | ** ** | ** **                  |       | ** ** | ** ** |
| Cash and cash  equivalents                                                                                                                       |       |                    | $          | 11,640                      |       |   | $ | 5,013 |   |
| Accounts receivable,  less allowance of $58 and $36, respectively                                                                                |       |                    | 9,704      |                        |       | 7,973 |   |
| Other current assets                                                                                                                             |       |                    | 1,035      |                        |       | 913 |   |
| **Total current assets**                                                                                                                         |       |                    | 22,379     |                        |       | 13,899 |   |
| Property and equipment,  net                                                                                                                     |       |                    | 2,169      |                        |       | 2,183 |   |
| Goodwill                                                                                                                                         |       |                    | 23,664     |                        |       | 23,118 |   |
| Intangible assets, net                                                                                                                           |       |                    | 6,982      |                        |       | 7,867 |   |
| Other assets                                                                                                                                     |       |                    | 410        |                        |       | 285 |   |
| **Total  assets**                                                                                                                                |       |                    | $          | 55,604                      |       |   | $ | 47,352 |   |
| **LIABILITIES AND STOCKHOLDERS’  EQUITY**                                                                                                   | ** ** |                    | ** ** | ** **                  |       | ** ** | ** ** |
| **Current liabilities:**                                                                                                                         | ** ** |                    | ** ** | ** **                  |       | ** ** | ** ** |
| Line of credit                                                                                                                                   |       |                    | $          | 0                           |       |   | $ | 10,000 |   |
| Accounts payable and  accrued expenses                                                                                                           |       |                    | 1,476      |                        |       | 1,854 |   |
| Accrued payroll and  related benefits                                                                                                            |       |                    | 950        |                        |       | 1,549 |   |
| Current portion of long  term debt                                                                                                               |       |                    | 1,061      |                        |       | 1,006 |   |
| Current portion of  capital lease obligations                                                                                                    |       |                    | 3          |                        |       | 3 |   |
| Current deferred rent                                                                                                                            |       |                    | 44         |                        |       | 44 |   |
| Deposits                                                                                                                                         |       |                    | 98         |                        |       | — |   |
| Deferred revenue                                                                                                                                 |       |                    | 6,318      |                        |       | 5,552 |   |
| **Total current liabilities**                                                                                                                    |       |                    | 9,950      |                        |       | 20,008 |   |
| Long term debt, less  current portion                                                                                                            |       |                    | 456        |                        |       | 934 |   |
| Long term capital lease  obligation, less current portion                                                                                        |       |                    | 7          |                        |       | 9 |   |
| Long term deferred rent                                                                                                                          |       |                    | 230        |                        |       | 235 |   |
| **Stockholders’ equity:**                                                                                                                   | ** ** |                    | ** ** | ** **                  |       | ** ** | ** ** |
| Convertible Series D  Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued  and outstanding                              |       |                    | —     |                        |       | — |   |
| Common stock, $.10 par  value,  10,000,000 shares authorized, 3,260,964 issued and 2,848,288 outstanding at  June 30, 2007 and December 31, 2006 |       |                    | 323        |                        |       | 286 |   |
| Additional paid-in  capital                                                                                                                      |       |                    | 108,365    |                        |       | 94,914 |   |
| Treasury stock 8,890  shares repurchased as of June 30, 2007 and December 31, 2006                                                               |       |                    | (149       | )                           |       | (149 | ) |
| Accumulated deficit                                                                                                                              |       |                    | (65,249    | )                           |       | (69,724 | ) |
| Accumulated other  comprehensive income                                                                                                          |       |                    | 1,671      |                        |       | 839 |   |
| **Total stockholders’ equity**                                                                                                              |       |                    | 44,961     |                        |       | 26,166 |   |
| **Total liabilities and stockholders’ equity**                                                                                              |       |                    | $          | 55,604                      |       |   | $ | 47,352 |   |

 

See accompanyingnotes to condensed consolidated financial statements.

2

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**Ebix, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Income**

(In thousands, except per share data)(Unaudited)
| ** **                                                                                                               | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                                                                               | ** ** | **2007**                                   | ** ** | **2006**                                 | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** **                                                                                                               | ** ** | ** **                                 | ** ** | ** **                               | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Revenue:**                                                                                                             | ** ** | ** **                                 | ** ** | ** **                               | ** ** | ** ** | ** ** | ** ** | ** ** |
| Services and  other (Including revenues from related parties of $406, $702, $984 and  $1,415, respectively- See Note 6.) |       | $                                          | 9,489      |                                     | $          | 6,601 |   | $ | 18,191 |   | $ | 11,754 |   |
| Software                                                                                                                 |       | 327                                        |       | 428                                      |       | 643 |   | 925 |   |
| **Total  revenue**                                                                                                       |       | 9,816                                      |       | 7,029                                    |       | 18,834 |   | 12,679 |   |
| **Operating  expenses:**                                                                                                 | ** ** | ** **                                 | ** ** | ** **                               | ** ** | ** ** | ** ** | ** ** | ** ** |
| Services and  other costs                                                                                                |       | 1,718                                      |       | 1,359                                    |       | 3,284 |   | 2,690 |   |
| Product  development                                                                                                     |       | 2,198                                      |       | 1,099                                    |       | 4,048 |   | 1,968 |   |
| Sales and  marketing                                                                                                     |       | 1,078                                      |       | 650                                      |       | 2,030 |   | 1,240 |   |
| General and  administrative                                                                                              |       | 1,899                                      |       | 1,997                                    |       | 3,686 |   | 3,361 |   |
| Amortization and  depreciation                                                                                           |       | 625                                        |       | 417                                      |       | 1,250 |   | 731 |   |
| **Total operating  expenses**                                                                                            |       | 7,518                                      |       | 5,522                                    |       | 14,298 |   | 9,990 |   |
| **Operating  income**                                                                                                    |       | 2,298                                      |       | 1,507                                    |       | 4,536 |   | 2,689 |   |
| Interest income                                                                                                          |       | 136                                        |       | 59                                       |       | 207 |   | 138 |   |
| Interest expense                                                                                                         |       | (142                                       | )          | (55                                      | )          | (370 | ) | (87 | ) |
| Foreign exchange  gain                                                                                                   |       | 122                                        |       | 46                                       |       | 127 |   | 88 |   |
| **Income  before income taxes**                                                                                          |       | 2,414                                      |       | 1,557                                    |       | 4,500 |   | 2,828 |   |
| Income tax (expense)  benefit                                                                                            |       | 99                                         |       | (59                                      | )          | (25 | ) | (195 | ) |
| **Net  income**                                                                                                          |       | $                                          | 2,513      |                                     | $          | 1,498 |   | $ | 4,475 |   | $ | 2,633 |   |
|                                                                                                                     |       |                                       |       |                                     |       |   |   |   |   |
| **Basic  earnings per common share**                                                                                     |       | $                                          | 0.85       |                                     | $          | 0.54 |   | $ | 1.54 |   | $ | 0.96 |   |
|                                                                                                                     |       |                                       |       |                                     |       |   |   |   |   |
| **Diluted  earnings per common share**                                                                                   |       | $                                          | 0.75       |                                     | $          | 0.48 |   | $ | 1.36 |   | $ | 0.84 |   |
|                                                                                                                     |       |                                       |       |                                     |       |   |   |   |   |
| Basic weighted  average shares outstanding                                                                               |       | 2,973                                      |       | 2,759                                    |       | 2,911 |   | 2,754 |   |
|                                                                                                                     |       |                                       |       |                                     |       |   |   |   |   |
| Diluted weighted  average shares outstanding                                                                             |       | 3,366                                      |       | 3,136                                    |       | 3,291 |   | 3,136 |   |

 

See accompanyingnotes to condensed consolidated financial statements.

3

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**Ebix, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Cash Flows**

(In thousands)(Unaudited)
| ** **                                                                                  | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                                                  | ** ** | **2007**                                 | ** ** | **2006** | ** ** |
|                                                                                        |       |                                     |       |   |   |
| **Cash  flows from operating activities:**                                                  | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Net income                                                                                  |       | $                                        | 4,475      |   | $ | 2,633 |   |
| **Adjustments  to reconcile net income to net cash provided by operating activities:** | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Depreciation and  amortization                                                              |       | 1,250                                    |       | 731 |   |
| Stock-based  compensation                                                                   |       | 114                                      |       | 43 |   |
| Restricted stock  compensation                                                              |       | 58                                       |       | 90 |   |
| Provision for  doubtful accounts                                                            |       | 30                                       |       | 8 |   |
| **Changes  in assets and liabilities:**                                                     | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Accounts  receivable                                                                        |       | (1,761                                   | )          | (1,577 | ) |
| Other assets                                                                                |       | (247                                     | )          | (3 | ) |
| Accounts payable  and accrued expenses                                                      |       | (378                                     | )          | (126 | ) |
| Accrued payroll  and related benefits                                                       |       | (599                                     | )          | (270 | ) |
| Deferred revenue                                                                            |       | 766                                      |       | 35 |   |
| Customer  Deposits                                                                          |       | 98                                       |       | — |   |
| Net cash  provided by operating activities                                                  |       | 3,806                                    |       | 1,564 |   |
| **Cash  flows from investing activities:**                                                  | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Investment in  Infinity                                                                     |       |                                     |       | (3,001 | ) |
| Investment in  Finetre                                                                      |       | (15                                      | )          | — |   |
| Deferred Rent                                                                               |       | (5                                       | )          | 233 |   |
| Capital  expenditures                                                                       |       | (315                                     | )          | (326 | ) |
| Net cash  used in investing activities                                                      |       | (335                                     | )          | (3,094 | ) |
| **Cash  flows from financing activities:**                                                  | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Payments on line  of credit                                                                 |       | (10,000                                  | )          |   |   |
| Proceeds from  the issuance of common stock, net issuance costs                             |       | 13,275                                   |       |   |   |
| Payments of long  term debt                                                                 |       | —                                   |       |   |   |
| Increase current  portion of long term debt                                                 |       | 55                                       |       |   |   |
| Proceeds from  the exercise of the stock options                                            |       | 37                                       |       | 123 |   |
| Repurchase of  common stock                                                                 |       | —                                   |       | (20 | ) |
| Capital leases                                                                              |       | (2                                       | )          | 14 |   |
| Principal  payments under debt obligations                                                  |       | (478                                     | )          | (500 | ) |
| Net cash (used)  provided in financing activities                                           |       | 2,887                                    |       | (383 | ) |
| Effect of  foreign exchange rates on cash                                                   |       | 269                                      |       | (388 | ) |
| Net  change in cash and cash equivalents                                                    |       | 6,627                                    |       | (2,301 | ) |
| Cash and  cash equivalents at the beginning of the period                                   |       | 5,013                                    |       | 6,733 |   |
| Cash and  cash equivalents at the end of the period                                         |       | $                                        | 11,640     |   | $ | 4,432 |   |
|                                                                                        |       |                                     |       |   |   |
| **Supplemental  disclosures of cash flow information:**                                     | ** ** | ** **                               | ** ** | ** ** | ** ** |
| Interest paid                                                                               |       | $                                        | 320        |   | $ | — |   |
| Income taxes paid                                                                           |       | $                                        | 431        |   | $ | 228 |   |

 

See accompanying notes tocondensed consolidated financial statements.

 

4

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Ebix, Inc. andSubsidiaries

NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousandsexcept for share and per share data)(UNAUDITED)

Note 1. BASIS OFPRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

**Basis ofpresentation** — These condensed consolidated financialstatements include the accounts of Ebix, Inc. and its wholly-owned subsidiaries(Ebix or “the Company”) and reflect all adjustments (consisting only of normalrecurring adjustments) which are, in the opinion of management, necessary for afair presentation of the results of the interim periods. These condensedconsolidated financial statements should be read in conjunction with theconsolidated financial statements, and accompanying notes thereto, included inthe Company’s Annual Report on Form 10-K for the year ended December 31,2006.The results of operations for the current interim period are notnecessarily indicative of results to be expected for the entire current year.Certain prior period amounts have been reclassified to conform to the currentperiod presentation.

**Summaryof significant accounting policies—**

**RevenueRecognition**—****We derive our revenue primarilyfrom two sources: (1) software revenue, which includes software licensesand (2) professional and support services, which includes softwaredevelopment projects, subscription and transaction fees related to servicesdelivered on an ASP basis, fees for hosting software, fees for software licensemaintenance, initial registration, and business process outsourcing revenue.Also included in professional and support services are fees for consulting,implementation, training, and project management provided to the Company’scustomers with installed systems and those in the process of installingsystems. As described below, significant management judgments and estimatesmust be made and used in connection with the revenue recognized in anyaccounting period. Material differences may result in the amount and timing ofour revenue for any period if our management made different judgments orutilized different estimates.

We apply theprovisions of Statement of Position (“SOP”) 97-2, “Software RevenueRecognition,” as amended by Statement of Position 98-9, “Modificationof SOP 97-2, Software Revenue Recognition, With Respect to CertainTransactions,” to all transactions involving the license of software where thesoftware deliverables are considered more than inconsequential to the otherelements in the arrangement. For contracts that contain multiple deliverables,we analyze the revenue arrangements in accordance with Emerging Issues TaskForce Issue No. 00-21, “Revenue Arrangements with MultipleDeliverables” (EITF 00-21), which provides criteria governing how toidentify whether goods or services that are to be delivered separately in abundled sales arrangement should be accounted for separately. Deliverables areaccounted for separately if they meet all of the following: a) thedelivered items have stand-alone value to the customer; b) the fairvalue of any undelivered items can be reliably determined; and c) if thearrangement includes a general right of return, delivery of the undelivereditems is probable and substantially controlled by the seller. To the extentarrangements contain multiple deliverables, the Company performs an analysis ofthe nature of the deliverables to determine to what extent the deliverables ofthe arrangement are governed by any higher level literature (as defined in EITF00-21). EITF 00-21 recognizes arrangements that qualify fortreatment under SOP 97-2 and certain arrangements that qualify forcontract accounting (i.e. SOP 81-1) as falling under the definitionof “higher level literature”.

The Companyrecognizes revenue for license fees from its software products upon delivery,provided that the fee is fixed and determinable, acceptance has occurred,collectibility is probable and persuasive evidence of an arrangement exists.Management uses signed contractual agreements as persuasive evidence of anarrangement where fee information is documented. Revenue from third partysoftware is derived from the licensing of third party software products inconnection with sales of the Company’s software licenses and is generallyrecognized upon delivery together with the Company’s license revenue. Training,data conversion, installation, and consulting services are generally recognizedas revenue when the services are performed and collectibility is probable.Revenue for maintenance and support service is recognized ratably over the termof the support agreement.

For arrangementscontaining multiple elements, revenue is recognized on delivered elements whenvendor-specific objective evidence (VSOE) of fair value has beenestablished on the undelivered elements, applying the residual method ofSOP 98-9. Fair value is determined for each undelivered elementbased on the price charged for the sale of each element separately. Incontracts that contain first year maintenance bundled with software fees,unbundling of maintenance is based on the price charged for renewal maintenance.Revenue for maintenance and support service is recognized ratably over the termof the support agreement.

5

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Revenues relatedto ASP services and hosting arrangements, including monthly fees as well as anyinitial registration or setup fees and related custom programming, arerecognized ratably over the term of the agreement in accordance with StaffAccounting Bulletin (“SAB”) 104, “Revenue Recognition.” Transaction fees arerecognized as revenue as the transactions occur. Transaction fees are generallybilled in arrears each month and the revenue is recognized when thetransactions are processed. Revenue is only recognized when collectiblity isprobable.

Deferred revenueincludes maintenance and support payments or billings that have been receivedor recorded prior to performance and, in certain cases, cash collections;amounts received under multi-element arrangements in which VSOE ofundelivered elements does not exist; and initial registration fees and relatedservice fees under hosting agreements. Revenue is recognized when VSOE of theundelivered elements is established, the elements are delivered, or theobligation to deliver the elements is extinguished.

Softwarearrangements involving significant customization, modification or productionare accounted for in accordance with American Institute of Certified PublicAccountants Statement of Position 81-1, “Accounting for Performanceon Construction-Type and Certain Production-Type Contracts,” using thepercentage-of-completion method. The Company recognizes revenue using actualhours worked as a percentage of total expected hours required by thearrangement, provided that the fee is fixed and determinable, evidence of anarrangement exists and the recovery of any related asset is considered probable.

For businessprocess outsourcing agreements, which include call center services, servicesare primarily performed on a time and material basis. Revenue is recognizedwhen the service is performed.

**Newaccounting pronouncements —**In June 2006, the Financial Accounting Standards Board (“FASB”) issuedInterpretation No. 48, *Accounting forUncertainty in Income Taxes* (“FIN 48”).  FIN 48 clarifies theaccounting for uncertainty in income taxes by prescribing the minimumrecognition threshold a tax position is required to meet before beingrecognized in the financial statements.  FIN 48 utilizes a two-stepapproach for evaluating tax positions.  Recognition (Step 1) occurs whenan enterprise concludes that a tax position, based solely on its technicalmerits is more likely than not to be sustained upon examination. Measurement (Step 2) is only addressed if Step 1 has been satisfied. Under Step 2, the tax benefit is measured at the largest amount of benefit,determined on a cumulative probability basis, that is more likely than not tobe realized upon final settlement.  As used in FIN 48, the term “morelikely than not” is means that the likelihood of an occurrence is greater than50%.  The Company adopted FIN 48 as of January 1, 2007 as required. There was no cumulative adjustment to beginning retained earnings related tothe implementation of FIN 48.

In September 2006, the FASB issued SFAS No. 157, *Fair Value Measurements* (“SFAS 157”).This standard clarifies the principle that fair value should be based on the assumptionsthat market participants would use when pricing an asset or liability.Additionally, it establishes a fair value hierarchy that prioritizes theinformation used to develop those assumptions.  SFAS 157 is effective forfinancial statements issued for fiscal years beginning after November 15,2007.  The Company is currently evaluating the impact that theimplementation of SFAS 157 will have on its financial statements.

In February 2007, the FASB issued SFAS No. 159, *The Fair Value Option for Financial Assets andFinancial Liabilities - Including an Amendment of FASB StatementNo. 115*(“SFAS 159”). SFAS 159 permits entities to choose tomeasure many financial assets and financial liabilities at fair value.Unrealized gains and losses on items for which the fair value option has beenelected are reported in earnings. SFAS 159 is effective for fiscal yearsbeginning after November 15, 2007. The Company is currently assessing theimpact of SFAS 159 on its financial statements.

**Employee Stock Options****—** At June 30, 2007,the Company has two stock-based employee compensation plans. EffectiveJanuary 1, 2006, the Company adopted Statement of Financial AccountingStandards No. 123 (revised 2004), “Share Based Payment”, applying themodified prospective method. Prior to the adoption of SFAS 123(R), theCompany applied the provisions of APB Opinion No. 25, “Accounting forStock Issued to Employees,” in accounting for its stock-based awards, andaccordingly, recognized no compensation cost for its stock plans other than forits restricted stock awards. Underthe modified prospective method, SFAS 123(R) applies to new awards and toawards that were outstanding as of December 31, 2005 that are subsequentlyvested, modified, repurchased or cancelled. Compensation expense recognizedduring 2007 and 2006 includes the portion vesting during the period for(1) all share-based payments granted prior to, but not yet vested as ofDecember 31, 2005, based on the grant date fair value estimated inaccordance with the original provisions of Statement of Financial AccountingStandards No. 123, “Accounting for Stock-Based Compensation”(SFAS 123) and (2) all share-based payments granted subsequent toDecember 31, 2005, based on the grant-date fair value estimated using theBlack-Scholes option-pricing model. No stock options were granted to employeesduring the first or second quarter of 2007 or 2006; 

6

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however, optionswere granted to Directors during the first quarter of 2006. Stock compensationexpense of $42 and $16 was recognized during the quarter ended June 30, 2007and 2006 and $93 and $32 was recognized during the six-months ended June 30,2007 and 2006 on existing stock options. As a result of the Company’s decisionto adopt the modified prospective method, prior period results have not beenrestated.

Note 2. STOCKOPTIONS

There were nostock options granted during the first or second quarter of 2007.

On August 11,2003, the Company granted 25,000 options to purchase the Company’s common stockto Rahul Raina, the brother of the Chief Executive Officer, in connection withhis joining the Company. The options vest over four years from the date ofgrant, expire ten years from the date of grant, and were issued with anexercise price below the fair market value of the stock on the date of grant.In December 2006 these options were amended and the exercise price wasincreased from $2.85 per share to $6.70 per share, which is equal to the fairmarket value of the common stock underlying the stock options at the originalgrant date. This option grant was valued using SFAS 123(R), and the Companyrecognized compensation expense of approximately $10 and $6 related to theseoptions during the three months ended June 30, 2007 and 2006 and $21 and $12related to these options during the six-month periods ended June 30, 2007 and2006, respectively.

The Company hasgranted nonstatutory and incentive options outside the Company’s stock optionplans to purchase up to an aggregate of 57,000 shares of the Company’s common stock, of which options topurchase 3,750 shares were outstanding at June 30, 2007. These optionswere granted at prices determined by the Board of Directors. The options have afour-year vesting period and must be exercised within ten years of the date ofthe grant. These options were granted prior to 2002, to persons who were notdirectors, officers or employees. These non-employee options were valuedpursuant to SFAS 123. The majority of these options are performance-basedawards, with no service commitment and subject to vesting only if the Company’sstock price reaches a certain target. At June 30, 2007, 2,812 of the sharessubject to these non-employee options were vested.

Note 3. STOCK BASEDCOMPENSATION

 A summary of stock option activity within theCompany’s stock-based compensation plans for the quarter ended June 30, 2007 isas follows:

 
| ** **                             | ** ** | ** **            | ** ** | ** **    | ** ** | ** **  | ** ** | ** **      | ** ** | **Weighted**  | ** ** | ** **    | ** ** |
|----------------------------------------|------------|-----------------------|------------|---------------|------------|-------------|------------|-----------------|------------|---------------|------------|---------------|------------|
| ** **                             | ** ** | ** **            | ** ** | ** **    | ** ** | ** **  | ** ** | ** **      | ** ** | **Average**   | ** ** | ** **    | ** ** |
| ** **                             | ** ** | ** **            | ** ** | ** **    | ** ** | ** **  | ** ** | **Weighted**    | ** ** | **Remaining** | ** ** | ** **    | ** ** |
| ** **                             | ** ** | **Within Plans** | ** ** | ** **    | ** ** | **Average** | ** ** | **Contractual** | ** ** | **Aggregate** | ** ** |
| ** **                             | ** ** | **Nonstatutory**      | ** ** | **Incentive** | ** ** | **Outside** | ** ** | **Exercise**    | ** ** | **Term**      | ** ** | **Intrinsic** | ** ** |
| ** **                             | ** ** | **Options**           | ** ** | **Options**   | ** ** | **Plan**    | ** ** | **Price**       | ** ** | **(Years)**   | ** ** | **Value**     | ** ** |
| Outstanding at  December 31, 2006 |       |                  | 523,073    |          |       | 47,781      |       |            | 3,875      |          |       | $             | 12.41      |   |   | 5.38 |   |   | $ | 8,929 |   |
| Granted                                |       |                  | —     |          |       | —      |       |            | —     |          |       | $             | —     |   |   | — |   |   | — |   |
| Exercised                              |       |                  | —     |          |       | —      |       |            | —     |          |       | $             | —     |   |   | — |   |   | — |   |
| Canceled                               |       |                  | (26        | )             |       | —      |       |            | —     |          |       | $             | 53.25      |   |   | — |   |   | — |   |
| Outstanding at  March 31, 2007         |       |                  | 523,047    |          |       | 47,781      |       |            | 3,875      |          |       | $             | 12.41      |   |   | 5.14 |   |   | $ | 9,526 |   |
|                                   |       |                  |       |          |       |        |       |            |       |          |       |          |       |   |   |   |   |   |   |
| Moved to within  Plan                  |       |                  | 125        |          |       |        |       |            | (125       | )             |       |          |       |   |   |   |   |   |   |
| Granted                                |       |                  | —     |          |       | —      |       |            | —     |          |       | $             | —     |   |   | — |   |   | — |   |
| Exercised                              |       |                  | (4,176     | )             |       | —      |       |            | —     |          |       | $             | 8.25       |   |   | — |   |   | — |   |
| Canceled                               |       |                  | (38        | )             |       | —      |       |            | —     |          |       | $             | 42.50      |   |   | — |   |   | — |   |
| Outstanding at  June 30, 2007          |       |                  | 518,958    |          |       | 47,781      |       |            | 3,750      |          |       | $             | 12.44      |   |   | 4.89 |   |   | $ | 15,835 |   |
|                                   |       |                  |       |          |       |        |       |            |       |          |       |          |       |   |   |   |   |   |   |
| Exercisable at June 30,  2007          |       |                  | 513,331    |          |       | 33,770      |       |            | 2,812      |          |       | $             | 11.24      |   |   | 4.89 |   |   | $ | 15,923 |   |

 

The aggregate intrinsicvalue for stock options outstanding and exercisable is defined as thedifference between the market value of the Company’s stock as of the end of theperiod and the exercise price of the stock options.

7

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The Company had 15,144 ofstock options that were not vested at June 30, 2007 that were expensed in 1999.Additionally, the Company has 1,562 of unvested stock options that had beenissued to Rahul Raina. At June 30, 2007, there was $75 of unrecognizedcompensation cost related to total nonvested stock options. This cost will berecognized over the two years ending December 31, 2008.

During 2000, the Companygranted incentive stock options to purchase a total of 1,250 shares for whichvesting is contingent upon increases in the Company’s stock price and other performancebased measures, such as achieving specified revenues for new products. During1999, the Company granted incentive stock options to purchase a total of 58,250shares, for which vesting is contingent upon increases in the Company’s stockprice and other performance based measures, such as achieving  specified revenues for new products. For these options, vesting generallyoccurs when the Company’s stock price equals $72.00, $96.00, $120.00 and$160.00 per share. Since 2000, no incentive options were granted. The exerciseprice of each option, which has a ten-year life, is equal to the market priceof the Company’s stock on the date of grant. There was no compensation expenserelated to these options for the quarters or six-month periods ended June 30,2007 and 2006.

During May 2007, thecompensation committee of the Board of Directors of the Company gave finalapproval to award 8,501 shares of restricted stock to Robin Raina, the Company’sChairman, Chief Executive Officer and President.  The award was madepursuant to the 2006 incentive compensation program (the “2006 Program”)approved by the Company’s Board of Directors.  In accordance with the 2006Program, the number of shares of restricted stock issued to Mr. Rainarepresents approximately 23% of the aggregate of the total salary and cashbonus compensation earned for 2006, divided by the market price of the Company’sstock on May 9, 2007, the date the Compensation Committee of the Board ofDirectors approved the restricted stock grant. The Company recognizedcompensation expense of approximately $14 related to these shares during the quarter and six-month period endedJune 30, 2007.

On February 3, 2006,the Compensation Committee of the Board of Directors of the Company gave finalapproval to awards of 8,354 shares of restricted stock to Robin Raina, theCompany’s Chairman, Chief Executive Officer and President, and2,506 shares of restricted stock to Richard J. Baum, the Company’sthen Executive Vice President, Chief Financial Officer and Secretary, under theCompany’s 1996 Incentive Plan. The awards were made pursuant to a 2005incentive compensation program (the “2005 Program”) approved by the Company’sBoard of Directors. In accordance with the 2005 Program, the number of sharesof restricted stock issued to each of Messrs. Raina and Baum represents15% of the aggregate of the total salary and cash bonus compensation earned byeach for 2005 (such aggregate compensation being $1,100 in the case ofMr. Raina and $330 in the case of Mr. Baum), divided by the marketprice of the Company’s stock on February 3, 2006, the date the Boardapproved the restricted stock grants. The Company recognized compensationexpense of approximately $14 for each of the quarters and $28 and $73 for thesix-month periods ended June 30, 2007 and 2006, respectively.

On June 1, 2005, theCompensation Committee of the Board of Directors of the Company gave finalapproval to awards of 9,758 shares of restricted stock to Robin Raina, theCompany’s Chairman, Chief Executive Officer and President, and4,382 shares of restricted stock to Richard J. Baum, the Company’sthen Executive Vice President, Chief Financial Officer and Secretary, under theCompany’s 1996 Incentive Plan. The awards were made pursuant to a 2004incentive compensation program (the “2004 Program”) approved by the Company’sBoard of Directors on December 4, 2004 (as described in a Form 8-Kfiled by the Company on December 9, 2004) and were subject to adetermination by the Compensation Committee and the Board, after the Company’srelease of its 2004 operating results, that such operating results weresubstantially consistent with the operating results of the Company for thefirst nine months of 2004, as they compared to those for the same period of theprior year (excluding executive incentive compensation). The CompensationCommittee and the Board made such determination in April 2005, at whichtime the grants of the restricted stock (along with 2004 cash bonuscompensation) were approved, subject to the Compensation Committee’s approvalof certain terms of the restricted stock awards and of the forms of restrictedstock agreements to represent such awards.

On June 1, 2005, theCompensation Committee approved such terms and forms of restricted stockagreements, and the shares of restricted stock were issued to each ofMessrs. Raina and Baum on such date. In accordance with the 2004 Program,the number of shares of restricted stock issued to each of Messrs. Rainaand Baum represents 10% of the aggregate of the total salary and cash bonuscompensation earned by each for 2004 (such aggregate compensation being $1,013in the case of Mr. Raina and $455 in the case of Mr. Baum), dividedby the market price of the Company’s stock on April 11, 2005, the date theBoard approved the restricted stock grants The Company recognized compensationexpense of approximately $8 for each of the quarters and $16 for the six-monthperiods ended June 30, 2007 and 2006.

Pursuant to therestricted stock agreements, the restricted stock vests in three equal annualinstallments. The restricted stock also vests with respect to any unvestedshares upon the applicable officer’s death, Disability (as defined) orRetirement (as defined), the Company’s termination of the officer other thanfor Cause (as 

8

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defined) or a Change inControl (as defined) of the Company. If the officer terminates his employmentother than due to death, Disability or Retirement or the Company terminates theofficer’s employment for Cause, any unvested shares held by the officer will beforfeited. Mr. Baum’s restricted stock fully vested upon his retirementeffective December 31, 2006.

Note 4. EARNINGSPER SHARE

Basic earnings pershare (“EPS”) is equal to net income divided by the weighted average number ofshares of common stock outstanding for the period. The weighted average numberof shares outstanding for the three and six months ended June 30, 2007 was2,972,874 and 2, 910,925, respectively. The weighted average number of sharesoutstanding for the three and six months ended June 30, 2006 was 2,759,085 and2,753,513, respectively. Diluted EPS is calculated as if the Company hadadditional common stock outstanding from the beginning of the year or the dateof grant for all common stock equivalents, net of assumed repurchased sharesusing the treasury stock method. Diluted EPS recognizes the dilutive effect ofcommon stock equivalents and is equal to net income divided by the sum of theweighted average number of shares outstanding and common stock equivalents. Forthe three and six months ended June 30, 2007 and 2006, the Company’s commonstock equivalents consisted of restricted stock and stock options. For thethree and six months ended June 30, 2007, the effect of this calculationresulted in an increase in the weighted average number of shares outstanding of393,054 and 380,244, respectively. At June 30, 2007, the fully diluted weightedaverage number of shares outstanding was 3,365,928 and 3,291,169, respectively.At June 30, 2006, the fully diluted weighted average number of sharesoutstanding was 3,135,775 and 3,136,328, respectively. At June 30, 2007, therewere 203,055 shares potentially issuable with respect to stock options, whichcould dilute EPS in the future but which were excluded from the diluted EPScalculation because their effect was antidilutive. At June 30, 2006, there were291,145 shares potentially issuable with respect to stock options, which coulddilute EPS in the future but which were excluded from the diluted EPScalculation because their effect was antidilutive.

Note 5.COMPREHENSIVE INCOME

|                                                                                  | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|----------------------------------------------------------------------------------|------------|--------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                                       | ** ** | **2007**                                   | ** ** | **2006**                                 | ** ** | **2007** | ** ** | **2006** | ** ** |
|                                                                             |       |                                       |       |                                     |       |   |   |   |   |
| Net income                                                                       |       | $                                          | 2,513      |                                     | $          | 1,498 |   | $ | 4,475 |   | $ | 2,633 |   |
| Other  comprehensive income (loss)— foreign currency translation adjustment |       | 625                                        |       | (128                                     | )          | 832 |   | (343 | ) |
| Comprehensive income                                                             |       | $                                          | 3,138      |                                     | $          | 1,370 |   | $ | 5,307 |   | $ | 2,290 |   |

 

Note 6. RELATEDPARTY TRANSACTIONS AND SIGNIFICANT CUSTOMERS

In 2001, theCompany issued 868,000 shares of its common stock to Brit Insurance HoldingsPLC (“Brit”), for $7,000. The total shares held by Brit at June 30, 2007 were930,163 representing an equity ownership of approximately 29%.

The Company hasentered into various software and service agreements with Brit and itsaffiliates. During the three and six months ended June 30, 2007 approximately$406 (4%) and $984 (5%), respectively, was recognized as revenue from Brit andits affiliates. During the three and six months ended June 30, 2006approximately $702 (10%) and $1,415 (11%), respectively, was recognized asrevenue from Brit and its affiliates Total accounts receivable from Brit and its affiliates at June 30, 2007and December 31, 2006 were $702 (8%) and $1,039 (13%), respectively.

During the threeand six months ended June 30, 2006, approximately $712 (10%) and $1,208 (9%),respectively, was recognized as revenue from AON. Total accounts receivablefrom AON at June 30, 2006 was $462.

 

9

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Note 7. ACQUISITIONS

*FinetreAcquisition*

*EffectiveOctober 1, 2006, the Company acquired Finetre Corporation (“Finetre”)through a merger. Ebix paid Finetre shareholders $13,000 for substantially allFinetre stock, and Finetre shareholders retain the right to earn up to $3,000in additional payments over two years if certain revenue and operating incometargets of the Finetre services are met. Finetre operates as an ASP technologyfirm focusing on transaction processing and compliance automation in the financialservices industry*

*TheCompany incurred approximately $380 of direct expenses related to closing theFinetre acquisition. The Company funded the acquisition using available cash onhand of $2,000 as well as its $11,000 line of credit.*

The acquisition ofFinetre was consistent with the Company’s overall focus on providing softwaresolutions to insurance carriers, agents and brokers. This acquisition increasedsales and revenue of the consolidated total while providing sales opportunitiesfor the Company’s other existing services.

Concurrentwith the acquisition, the Company ascribed a preliminary value to each of theassets and liabilities acquired. The following table summarizes the fair valueof the assets acquired and liabilities assumed at the date of acquisition.

| Current assets        |   | $      | 2,244  |   |
|----------------------------|--------|--------|--------|--------|
| Property and equipment     |   | 580    |   |
| Intangible assets          |   | 3,391  |   |
| Goodwill                   |   | 9,726  |   |
| Total assets acquired      |   | 15,941 |   |
| Current liabilities        |   | 2,561  |   |
| Total liabilities  assumed |   | 2,561  |   |
| Net assets acquired        |   | $      | 13,380 |   |

 

Of the $3,391 ofintangible assets acquired, $2,346 was assigned to customer relationships witha remaining useful life of nine years, $896 was assigned to developedtechnology with a remaining useful life of 5 years, $140 was assigned to backlogwith a remaining estimated useful life of fourteen months and $9 assigned toIPR&D which was expensed immediately. The Company recorded $139 and $278 ofamortization expense related to these intangible assets for the three and sixmonths ended June 30, 2007, respectively. There was no amortization expense related to these intangibles for thethree and six months ended June 30, 2006 as the acquisition was consummated inOctober 2006.

*Infinity SystemsAcquisition*

Effective May 1, 2006,The Company acquired substantially all of the operating assets of InfinitySystems Consulting, Inc. (“Infinity”). Ebix acquired these assets for anupfront payment of $2,900 in cash and a potential future payment not exceeding$4,500 in cash if Infinity services meet certain future revenue targets. TheCompany capitalized approximately $149 of transaction costs in conjunction withthe Infinity acquisition.

The acquisition ofInfinity was consistent with the Company’s overall focus on providing softwaresolutions to insurance carriers, agents and brokers. This acquisition increasedsales and revenue of the consolidated total while providing significant salesopportunities for the Company’s other existing services.

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Concurrent with theacquisition, the Company ascribed a preliminary value to each of the assets andliabilities assumed from the acquisition of Infinity. The following tablesummarizes the fair value of the Infinity assets acquired and liabilitiesassumed at the date of acquisition.

| Property and equipment     |   | $     | 93     |   |
|----------------------------|--------|-------|--------|--------|
| Intangible assets          |   | 2,399 |   |
| Goodwill                   |   | 702   |   |
| Total assets acquired      |   | 3,194 |   |
| Deferred revenue           |   | 91    |   |
| Deferred rent              |   | 54    |   |
| Total liabilities  assumed |   | 145   |   |
| Net assets acquired        |   | $     | 3,049  |   |

 

Of the $2,399 of intangible assets acquired,$656 was assigned to customer relationships with a remaining useful life of tenyears, $1,525 was assigned to developed technology with a remaining useful lifeof 5 years and $218 was assigned to trade name with a remaining estimateduseful life of ten years.  The Company recorded $98 and $196 ofamortization expense related to these intangible assets for the three and sixmonths ended June 30, 2007, respectively and $65 of amortization expenserelated to these intangibles for both the three and six months ended June 30,2006.

Note 8**-**LINE OF CREDIT ANDOTHER COMMITMENTS

**Bank Line of Credit:**

The Company maintains arevolving line of credit facility with LaSalle Bank N.A. The line provides fora variable interest rate and is secured by a first security interest insubstantially all of the Company’s assets. In August 2006, the Companyentered into an amendment to the credit agreement, which increased the line to$12,000 at a variable interest rate of LIBOR +1.5% (effective interest rate of6.82% at June 30, 2007). The line of credit contains certain financialcovenants related to profitability, current assets and debt coverage. OnOctober 2, 2006, $11,000 was borrowed on the line and on December 29,2006, $1,000 was paid on the line. Total borrowings on this line were $0 as ofJune 30, 2007. The line of credit agreement matures on August 31, 2007.

Letters of Credit:

Under terms of theagreement with Heart Consulting Services Pty. Ltd. (“Heart”), which wasacquired in 2004, $1,399 is payable by the Company under stand-by letters ofcredit issued by the Company’s lender on the Company’s line of credit in threeequal annual installments on each of the first, second and third anniversariesof the closing of the Heart asset acquisition (present value computed as$1,293). The three letters of credit expire on July 31, 2005,July 31, 2006 and July 31, 2007, respectively. In July, 2005 and2006, the Company made installment payments of $508 and $496, respectively.

Under terms of the leaseagreement for office space in Herndon, Virginia, the Company is required tomaintain a stand-by letter credit in the amount of $225. The amount of theletter of credit was automatically reduced to $150 on March 7, 2007. Therequirement for this letter of credit expires in November 2007.

**Self Insurance:**

**TheCompany is currently self-insured for its health insurance and has a stop losspolicy that limits the individual liability to $75 per person and the aggregateliability to 125% of the expected claims based upon the number of participantsand historical claims. As of June 30, 2007, the maximum aggregate liabilitycalculated was $933 for the annual contract period, which ends inSeptember 2007.**

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**Note 9—DEBT MATURITIES**
| ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------|------------|--------------------------------------------|------------|
| ** ** | ** ** | **2007**                                   | ** ** | **2008** | ** ** | **2009** | ** ** | **Total** | ** ** |
| EbixLife   |       | $                                          | —     |   | $ | 500 |   | $ | 456 |   | $ | 956 |   |
| Heart      |       | $                                          | 561        |   | $ | — |   | $ | — |   | $ | 561 |   |
|       |       | $                                          | 561        |   | $ | 500 |   | $ | 456 |   | $ | 1,517 |   |

** **

The EbixLife debt is aresult of the EbixLife acquisition in 2004 and represents a $2,500 non-interestbearing note payable. The note is payable in annual installments of $500 overfive years. The Company has imputed interest on this debt of 4%, and has madeinstallment payments in February 2005, 2006 and 2007.

The Heart debt is aresult of the Heart acquisition in 2004 and represents $1,399 payable understand-by letters of credit issued by the Company’s lender under the Company’sline of credit in three equal annual installments on each of the first, secondand third anniversaries of the closing. The Company has imputed interest onthis debt at 4%, and has made installment payments in July 2005 and 2006. Thecompany made a final payment on the Heart debt in July 2007.

Note 10 — PROFORMA FINANCIALS

The followingunaudited pro forma financial information for the three and six months endedJune 30, 2007 and 2006 presents the consolidated operations of the Company asif the Finetre and Infinity acquisitions had been made on January 1, 2006,after giving effect to certain adjustments for the pro forma acquisition as ofthe acquisition date. The Company made adjustments primarily for theamortization of intangible assets and interest expense related to theacquisitions. The unaudited pro forma financial information is provided forinformational purposes only and does not project the Company’s results ofoperations for any future period:

|                            | ** ** | **Three Months  Ended  June 30, 2007** | ** ** | **Three Months  Ended  June 30, 2006** | ** ** | **Six Months  Ended  June 30, 2007** | ** ** | **Six Months  Ended  June 30, 2006** | ** ** |
|----------------------------|------------|-------------------------------------------------------|------------|-------------------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------|------------|
| ** **                 | ** ** |                                                  | ** ** | ** **                                            |       | ** **                                          | ** ** |                                                | ** ** | ** ** |   | ** ** | ** ** |
| Revenue                    |       |                                                  | $          | 9,816                                                 |       |                                                | $          | 8,820                                               |       |   | $ | 18,834 |   |   | $ | 17,086 |   |
| Net income                 |       |                                                  | $          | 2,513                                                 |       |                                                | $          | 933                                                 |       |   | $ | 4,475 |   |   | $ | 1,603 |   |
| Basic earnings per  share  |       |                                                  | $          | 0.85                                                  |       |                                                | $          | 0.34                                                |       |   | $ | 1.54 |   |   | $ | 0.58 |   |
| Diluted earnings per share |       |                                                  | $          | 0.75                                                  |       |                                                | $          | 0.30                                                |       |   | $ | 1.36 |   |   | $ | 0.51 |   |

 

Note 11 — STOCKREPURCHASE

On June 2,2006, the Board of Directors announced a share repurchase plan to acquire up to$1 million of the Company’s current outstanding shares of common stock.Under the terms of the Board’s authorization, the Company retains the right topurchase up to $1 million in shares but does not have to repurchase thisentire amount.

The repurchaseplan’s terms have been structured to comply with the SEC’s Rule 10b-18,and is subject to market conditions and applicable legal requirements. Theprogram does not obligate the Company to acquire any specific number of sharesand may be suspended or terminated at any time. All purchases will be on theopen market and are expected to be funded from existing cash.

For the year endedDecember 31, 2006, the Company repurchased 8,890 shares of commonstock at prices ranging from $15.00 to $18.50. Total expenditures under therepurchase plan were $149. The Company has not repurchased any shares of commonstock since September 30, 2006.

Note 12 — INCOMETAXES

The Company adopted theprovisions of FIN 48 on January 1, 2007.  As a result of the implementationof FIN 48, there was no adjustment to the January 1, 2007 balance of retainedearnings.

The Company recordsinterest and penalties related to income tax uncertainties in income taxexpense and income taxes payable.  As ofthe date of adoption, the total amount of accrued interest and penalties wasimmaterial.

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Generally, the federal statute oflimitations requirements allow for tax return examinations for a period ofthree years subsequent to the filing date of the return. Certain state andforeign jurisdictions have longer periods. Accordingly, for the Company, the statute of limitations is closed forall returns filed for calendar 2002 and prior. However, to the extent allowed by law, the taxing authorities may havethe right to examine prior periods where NOLs were generated and carriedforward, and make adjustments up to the amount of the NOL carryforward amount.

**Note 13 — UNREGISTERED SALE OF EQUITY SECURITIES**

On June 1, 2007, Ebix,Inc. (“Ebix” or the “Company”) entered into a share purchase agreement (the “SharePurchase Agreement”)  to sell 400,000shares (the “Shares”) of unregistered common stock at $33.25 per share to LuxorCapital Partners, LP, a Delaware limited partnership, and Luxor CapitalPartners Offshore, Ltd., a Cayman Islands exempted company.  The purchase price represented a premium tothe 30-day average closing price of Ebix common stock on the date of the sale.

Pursuant to the SharePurchase Agreement, Ebix must, among other things: (1) prepare and file withthe Securities and Exchange Commission (the “SEC”) a registration statementregistering the Shares as soon as practicable, but in no event later than the45th day following the closing date of the sale ofthe Shares; (2) use its reasonable best efforts to cause the SEC to notify theCompany of the SEC’s willingness to declare the registration statementeffective on or before  120 days afterthe closing date of the sale of the Shares; (3) cause the Shares to be dulylisted for trading on the Nasdaq Global Market concurrently with theeffectiveness of the registration statement; and (4) take such action that isnecessary to keep the registration statement effective until the earlier of (a)the date on which the Shares may be resold without registration and withoutregard to any volume limitations under Rule 144(k), (b) all of the Shares havebeen sold pursuant to the registration statement or Rule 144, or (c) the secondanniversary of the closing date of the sale of the Shares.  In addition, in the event the SEC requiresthe Company to identify Luxor Capital Partners LP and Luxor Capital PartnersOffshore, Ltd. as underwriters in the registration statement, the Company mustcooperate to allow Luxor Capital Partners LP and Luxor Capital PartnersOffshore, Ltd. to conduct customary underwriter’s due diligence with respect tothe Company.  The Company will bear allexpenses related to the registration of the Shares.

The Share PurchaseAgreement also included standard indemnification provisions whereby the Companyagreed to indemnify Luxor Capital Partners LP and Luxor Capital PartnersOffshore, Ltd. against any losses, claims, damages, liabilities or expensesthat arise out of or are based on any untrue statement or alleged untruestatement of any material fact contained or incorporated by reference in theregistration statement.  In addition,Luxor Capital Partners LP and Luxor Capital Partners Offshore, Ltd. agreed toindemnify the Company against any losses, claims, damages, liabilities orexpenses that arise out of or are based any failure on the part of LuxorCapital Partners LP and Luxor Capital Partners Offshore, Ltd. to comply withspecified covenants and agreements in the Share Purchase Agreement, theinaccuracy of any representations or warranties made by Luxor Capital PartnersLP and Luxor Capital Partners Offshore, Ltd. or any untrue statement or allegeduntrue statement of any material fact contained or incorporated by reference inthe registration statement furnished to the Company by Luxor Capital PartnersLP and Luxor Capital Partners Offshore, Ltd.

Under the terms of theShare Purchase Agreement, Luxor Capital Partners LP acquired 163,600 shares ofthe Company’s common stock in exchange for $5,440 in cash and Luxor CapitalPartners Offshore, Ltd. acquired 236,400 shares of the Company’s common stockin exchange for $7,860 in cash, for an aggregate offering price of $13.3million.  As a result, at June 4, 2007,Luxor Capital Partners, LP owned approximately 5% of the Company’s outstandingcommon stock and Luxor Capital Partners Offshore, Ltd. owned approximately 7%of the Company’s outstanding common stock.

The Company sold theunregistered securities in accordance with Rule 506 of Regulation D under theSecurities Act of 1933, as amended. There were two purchasers involved in the sale and both are “accreditedinvestors”, as such term is defined in Rule 501 of Regulation D.

 

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**Item2.**                          MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

**Safe Harbor for Forward-Looking Statements underthe Securities Litigation Reform Act of 1995** — This QuarterlyReport on Form 10-Q contains various forward-looking statements and informationthat are based on management’s beliefs, as well as assumptions made by, andinformation currently available to management, including statements regardingfuture economic performance and financial condition, liquidity and capitalresources, acceptance of the Company’s products by the market and management’splans and objectives. The Company has tried to identify such forward lookingstatements by use of words such as “expects,” “intends,” “anticipates,” “plans,”  “believes, “will,” “should,” and similarexpressions, but these words are not the exclusive means of identifying suchstatements. The forward looking statements included in this Quarterly Reportare subject to various risks, uncertainties and other factors which could causeactual results to vary materially from those expressed in, or implied by, theforward looking statements. Such risks, uncertainties and other factors includethose discussed in “Risk Factors” below and included in the Company’s Form 10-Kfor the year ended December 31, 2006. Except as expressly required by thefederal securities laws, the Company undertakes no obligation to update anysuch factors or to publicly announce the results of any of the forward-lookingstatements contained herein to reflect changed circumstances or future eventsor developments or for any other reason.

The followinginformation should be read in conjunction with the unaudited condensedconsolidated financial statements and the notes thereto included in Part 1.Item 1 of this Quarterly Report, and the audited consolidated financialstatements and notes thereto and Management’s Discussion and Analysis ofFinancial Condition and Results of Operations contained in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2006.

**Overview**

The Company’sproduct and service strategy focuses on the following four areas:(1) worldwide sale, customization, development, implementation and supportof its insurance carrier system products, Infinity Systems and BusinessReinsurance and Insurance Company System (“BRICS”); (2) worldwide salesand support of broker/agency management systems including EbixASP, eGlobal; andWinbeat; (3) expansion of connectivity between consumers, agents,carriers, and third party providers through its exchange family of productsworldwide namely, EbixExchange, WinFlex, VitalSuite, AnnuityNet and LifeSpeed;and (4) Business Process Outsourcing (BPO) services, which include callcenter and back office operations.

**CriticalAccounting Policies**

The Company’s “criticalaccounting policies” are those that require application of management’s mostdifficult, subjective or complex judgments, often as a result of the need tomake estimates about matters that are inherently uncertain and may change infuture periods. The Company has identified the following as its criticalaccounting policies: revenue recognition, estimating the allowance for doubtfulaccounts receivable and accounting for income taxes. For a discussion of thesepolicies, see “Management’s Discussion and Analysis of Financial Condition andResults of Operations — Critical Accounting Policies” in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2006.

**Resultsof Operations**

**Three-MonthPeriod Ended June 30, 2007 Compared to the Three-Month Period Ended June 30,2006**

**TotalRevenue** - The Company’s revenue is primarily derived fromprofessional and support services (“Services”). Services include consulting,implementation, training and project management provided to the Company’s customerswith installed systems and those in the process of installing systems. Inaddition, Services include fees for software license maintenance, ApplicationService Provider (ASP) services, hosting and other miscellaneous revenues.Software revenue is derived from the licensing of proprietary and third partysoftware (“Software”). Total revenue is comprised of Software revenue andServices revenue. Total revenue for the quarter ended June 30, 2007 increased$2,787, or 40%, to $9,816 from $7,029 for the comparable quarter of the prioryear.

**ServicesRevenue** — Total services revenue for the second quarter of2007 increased $2,888, or 44%, to $9,489 from $6,601 for the comparable quarterof the prior year. This increase was primarily due to the acquisitions ofFinetre and Infinity, which accounted for $2,204 and $795, respectively.

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During the secondquarter of 2007 and 2006, approximately $406 and $702, respectively wasrecognized as services revenue from Brit Insurance Holdings PLC (“Brit”) andits affiliates. The amounts represented 4% and 8%, of the Company’s totalrevenues for the second quarters of 2007 and 2006, respectively. Brit ownedapproximately 29% of the Company’s common stock as of  June 30, 2007. Brit nor its affiliates havelong-term agreements with the Company that provide certainty that such revenueswill be recurring.

**SoftwareRevenue** - Total software revenue for the second quarter of2007 decreased $101, or 24 %, to $327 from $428 for the comparable quarter ofthe prior year. This decrease reflects management’s emphasis on increasingrecurring services revenue.

**Services and other costs**-Cost of services revenue includes costs associated with support, call center,consulting, implementation and training services. Total services and othercosts for the second quarter increased $359, or 26%, to $1,718  from $1,359 for the comparable quarter of theprior year. This increase was due primarily to an increase in payroll expensesof $159 and facility costs of $186 primarily related to the acquisitions ofFinetre and Infinity.

**ProductDevelopment Expenses**-Total product development expenses for the second quarter of 2007 increased$1,099, or 100%, to $2,198 from $1,099 for the comparable quarter of the prioryear. This increase was due to an increase in domestic payroll expenses of $722and facility costs of $351 primarily due to the acquisitions of Finetre andInfinity.

**Sales andMarketing Expenses**- Total sales andmarketing expenses for the second quarter of 2007 increased $428, or 66%, to$1,078 from $650 for the comparable quarter of the prior year. This increasewas attributable to an increase in payroll expenses of $192, an increase intravel and entertainment expenses of $88 and an increase in facility costs of$131 primarily due to the acquisitions of Finetre and Infinity

**Generaland Administrative Expenses** - Total general andadministrative expenses for the second quarter decreased ($98), or 5%, to$1,899 from $1,997 for the comparable quarter of the prior year. This decreasewas primarily due to a decrease in facility costs of ($668) partially offset byan increase in rent expense $208, travel and entertainment $110 and an increasein other overall expenses.

**Amortizationand Depreciation Expenses** — Total amortization anddepreciation expenses for the second quarter increased $208, or 50 %, to $625from $417 for the comparable quarter of the prior year. This increase isprimarily due to the increase in depreciation and amortization of intangiblesrelated to the acquisitions of Finetre and Infinity.

**Incometax expense**— Theeffective tax rate for the first quarter of 2007 was lower than the rate forthe comparable quarter of the prior year due to a different income mix amongthe various tax jurisdictions in which the Company does business.

**Six****-Month Period Ended June 30, 2007 Compared to theSix-Month Period Ended June 30, 2006**

**TotalRevenue** - The Company’s revenue is primarily derived fromprofessional and support services (“Services”). Services include consulting,implementation, training and project management provided to the Company’scustomers with installed systems and those in the process of installingsystems. In addition, Services include fees for software license maintenance,Application Service Provider (ASP) services, hosting and other miscellaneousrevenues. Software revenue is derived from the licensing of proprietary andthird party software (“Software”). Total revenue is comprised of Softwarerevenue and Services revenue. Total revenue for the six months ended June 30,2007 increased $6,155, or 49%, to $18,834 from $12,679 for the comparable firstsix months of the prior year.

**ServicesRevenue** — Total services revenue for the first six months of2007 increased $6,437 or 55%, to $18,191 from $11,754 for the comparable firstsix months of the prior year. This increase was primarily due to theacquisitions of Finetre and Infinity, which accounted for $4,311 and $1,820,respectively.  Additionally weexperienced continued growth in our EbixLife suite of products of $423, anincrease in international service revenue of $260. These increases werepartially offset by a decrease in consulting revenue of $238.

During the firstsix months of 2007 and 2006, approximately $984 and $1,415, respectively was recognized as services revenue from BritInsurance Holdings PLC (“Brit”) and its affiliates. The amounts represented 5%and 11%, of the Company’s total revenues for the first six months of 2007 and2006, respectively. Brit owned approximately 29% of the Company’s common stockas of  June 30, 2007. Neither Brit norits affiliates have long-term agreements with the Company that providecertainty that such revenues will be recurring.

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Total softwarerevenue for the first six months of 2007 decreased $282, or 30 %, to $643 from$925 for the comparable first six months of the prior year. This decrease wasdue to a decrease in primarily domestic software sales and reflects management’semphasis on increasing recurring services revenue.

**Servicesand other costs**- Cost of servicesrevenue includes costs associated with support, call center, consulting,implementation and training services. Total services and other costs for thefirst six months increased $594, or 22%, to $3,284 from $2,690 for thecomparable quarter of the prior year. This increase was due primarily to anincrease in payroll expenses of $332 and facility costs of $235 primarilyrelated to the acquisitions of Finetre and Infinity.

**ProductDevelopment Expenses**-Total product development expenses for the first six months of 2007 increased$2,080, or 106%, to $4,048 from $1,968 for the comparable first six months ofthe prior year. This increase was due to an increase in domestic payrollexpenses of $1,448, and facility costs of $560 primarily due to theacquisitions of Finetre and Infinity.

**Sales andMarketing Expenses**- Total sales andmarketing expenses for the first six months of 2007 increased $790, or 64%, to$2,030 from $1,240 for the comparable first six months of the prior year. Thisincrease was attributable to an increase in payroll expenses of $458,  an increase in travel and entertainmentexpenses of $142 and an increase in facility costs of $177 primarily due to theacquisitions of Finetre and Infinity.

**Generaland Administrative Expenses** - Total general andadministrative expenses for the first six months increased $325, or 9%, to$3,686 from $3,361 for the comparable first six months of the prior year. Thisincrease was primarily due to an increase in salaries of $454, rent of $284,travel & entertainment of $169, franchise fees and miscellaneous taxfilings of $151, audit and legal fees of $97 and other overall expenses of$142; partially offset by a decrease in facility costs ($972) primarily relatedto the acquisition of Finetre and Infinity.

**Amortizationand Depreciation Expenses** — Total amortization anddepreciation expenses for the first six months increased $519, or 71 %, to$1,250 from $731 for the comparable first six months of the prior year. Thisincrease is primarily due to the increase in depreciation and amortization ofintangibles related to the acquisitions of Finetre and Infinity.

**Incometax expense**— Theeffective tax rate for the first quarter of 2007 was lower than the rate forthe comparable quarter of the prior year due to a different income mix amongthe various tax jurisdictions in which the Company does business.

**Liquidityand Capital Resources**

The Company hadcash and cash equivalents of $11,640 at June 30, 2007, compared to cash andcash equivalents of $5,013 at December 31, 2006.

During the sixmonths ended June 30, 2007, the Company generated operating cash flow of $3,806as compared to $1,564 of operating cash flow for the six months ended June 30,2006. The cash flow from operations in the six months ended June 30, 2007 isprincipally due to a growth in net income less a decrease in accounts payableand accrued expenses (including payroll) of $977, an increase in net accountsreceivable of $1,761, plus an increase in deferred revenue of $766 and anincrease depreciation and amortization of $1,250. These balance sheetfluctuations are normal consequences of timing differences between accruals andtheir cash settlement.

Cash used ininvesting activities of $335 in the six months ended June 30, 2007 representedexpenditures made primarily related to the purchase of fixed assets

In thesix months ended June 30, 2007, 5% of the Company’s total revenues were fromBrit and its affiliates. Brit does not have a long-term agreement with theCompany that provides certainty that such revenues and related cash flows willbe recurring.

TheCompany maintains a revolving line of credit facility with LaSalle Bank N.A.During 2006, the line of credit was increased from $5,000 to $12,000. The lineprovides for a variable interest rate equal to LIBOR + 1.50% and is secured bya first security interest in substantially all of the Company’s assets. Inconnection with the Finetre acquisition, the Company borrowed $11,000 on theline of credit, of which $11,000 has been repaid. At June 30, 2007, thebalance of the line of credit was $0. The current interest rate on this line is6.82%. The line of credit matures on August 31, 2007.  Theline of credit contains certain financial covenants related to profitability,current assets and debt coverage.

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Inconnection with the Company’s acquisition of Finetre, Ebix paid Finetreshareholders $13,000 for substantially all Finetre stock, and Finetreshareholders retain the right to earn up to $3,000 in additional payments overtwo years if certain revenue and operating income targets earned from Finetreservices are met. The Company fundedthe acquisition using available cash on hand of $2,000 and $11,000 from theCompany’s line of credit.

EffectiveMay 1, 2006, the Company acquired substantially all of the operatingassets of Infinity. The operations of Infinity have been included in theCompany’s financial statements since that date. The Company acquired theseassets for an upfront payment of $2,900 in cash and a potential future paymentnot exceeding $4,500 in cash if Infinity related services meet certain futurerevenue targets. The Company funded the acquisition using available cash onhand.

Inplanning for its capital needs, the Company takes into account its sources ofcash, which include operating cash flow, cash balances and funds from creditfacilities, and anticipated future cash needs, which include working capitalrequirements for operations, capital expenditures, and expenditures forbusiness acquisitions. Presently, the Company expects to renew the line ofcredit when it matures in August 2007 or refinance the amount outstandingwith long term debt. Based on these considerations, the Company believes itwill have sufficient cash from operations and credit facilities to satisfy itscontractual obligations, including contingent payments from prior acquisitions,for at least the next several years. In order for the Company to make futureacquisitions, it may be necessary to raise additional capital, either throughequity or debt transactions.
| ** **                                | ** ** | **Payment Due by Period** | ** ** |
|-------------------------------------------|------------|------------------------------------------|------------|
| ** **                                | ** ** | **Total**                                | ** ** | **Less Than  1 Year** | ** ** | **1 - 3 Years** | ** ** | **3 - 5 Years** | ** ** | **More than  5 years** | ** ** |
| ** **                                | ** ** | **(in thousands)**                  | ** ** |
| Contractual  Obligations:                 |       |                                     |       |   |   |   |   |   |   |   |   |
| Short- and Long-Term  Debt Obligations(1) |       | $                                        | 1,517      |   | $ | 1,061 |   | $ | 456 |   | $ | — |   | $ | — |   |
| Operating Leases  Obligations             |       | $                                        | 6,124      |   | $ | 1,376 |   | $ | 2,103 |   | $ | 1,367 |   | $ | 1,278 |   |
| Capital Leases  Obligations               |       | $                                        | 11         |   | $ | 4 |   | $ | 7 |   | $ | — |   | $ | — |   |
| Total                                     |       | $                                        | 7,652      |   | $ | 2,441 |   | $ | 2,566 |   | $ | 1,367 |   | $ | 1,278 |   |

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(1)             Includesinterest at an imputed interest rate of 4% for Heart and LifeLink and at aninterest rate of 6.85% for the line of credit.

**Item3.**                          QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to certain market risks, includingforeign currency and interest rates. The majority of the Company’soperations are based in the U.S. and, accordingly, the majority of our transactionsare denominated in U.S. dollars. However, we have foreign-based operationswhere transactions are denominated in foreign currencies and are subject tomarket risk with respect to fluctuations in the relative value of currencies.Currently, the Company has operations in Australia, New Zealand, Singapore,Canada and India, and conducts transactions in the local currencies of eachlocation. There can be no assurance that fluctuations in the value of foreigncurrencies will not have a material adverse effect on the Company’s business,operating results, revenues or financial condition. The net change in cumulative foreign currency translation adjustment wasan unrealized gain  of $122 and$46 for the three months ended June 30, 2007 and 2006, respectively and $127and $88 for the six months ended June 30, 2007 and 2006, respectively. TheCompany considered the historical trends in currency exchange rate anddetermined that it was reasonably possible that adverse changes in exchangerates of 20% for all currencies could be experienced in the near term. Suchadverse changes would have resulted in an adverse impact on income before taxesof approximately $195 for the three months ended June 30, 2007 and a positiveimpact on income before taxes of approximately $61 for the three months endedJune 30, 2006, respectively. Such adverse changes would have resulted in anadverse impact on income before taxes of approximately $291 and $166 for thesix months ended June 30, 2007 and 2006, respectively. There has been nomaterial changes in the Company’s interest rate risk during the six monthsended June 30, 2007. For additional information on interest rate risk, refer tothe “Quantitative Disclosures About Market Risk” section of the Company’sAnnual Report on Form 10-K for the year ended December 31, 2006.

**Item4.**                          CONTROLS AND PROCEDURES

*Disclosure Controls and Procedures*.*  *The Companymaintains controls and procedures designed to ensure that it is able to collectthe information we are required to disclose in the reports we file with theSecurities and Exchange Commission (“SEC”), and to process, summarize anddisclose this information within the time periods specified in therules of the SEC. Management, with the participation of the ChiefExecutive Officer , has evaluated our disclosure controls 

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and procedures (as suchterm is defined in Rules 13a-15(e) and 15d-15(e) underthe Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

Based on such evaluation, the Chief Executive Officerhas concluded that, as of the end of the fiscal quarter ended June 30, 2007,the Company’s controls and procedures are effective to ensure that the Companyis able to collect, process and disclose the information it is required todisclose in the report it files with the SEC within the required time periods.

**Part II — OTHER INFORMATION**

***Item 1.         LEGAL PROCEEDINGS***

***None.***

**Item 1A.**                 RISK FACTORS

Information regarding risk factors appears in “MD&A -Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in “RiskFactors” in Part I - Item IA of our Annual Report on Form 10-K for the fiscalyear ended December 31, 2006.  While webelieve there have been no material changes from the risk factors previouslydisclosed in such Annual Report, you should carefully consider, in addition tothe other information set forth in this report, the risk factors discussed inour Annual Report which could materially affect our business, financialcondition or future results.  Such riskfactors are expressly incorporated herein by reference.  The risks described in our Annual Report arenot the only risks facing our Company. In addition to risks and uncertainties inherent in forward lookingstatements contained in this Report on Form 10-Q, additional risks anduncertainties not currently known to us or that we currently deem to beimmaterial also may materially adversely affect our business, financialcondition and/or operating results.

**Item2.**                          UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 1, 2007, the Company entered into a share purchase agreement (the “Share PurchaseAgreement”)  to sell 400,000 shares (the “Shares”)of unregistered common stock at $33.25 per share to Luxor Capital Partners, LP,a Delaware limited partnership, and Luxor Capital Partners Offshore, Ltd., aCayman Islands exempted company.  Thepurchase price represented a premium to the 30-day average closing price ofEbix common stock on the date of the sale. Under the terms of the Share Purchase Agreement, Luxor Capital PartnersLP acquired 163,600 shares of the Company’s common stock in exchange for $5,440in cash and Luxor Capital Partners Offshore, Ltd. acquired 236,400 shares ofthe Company’s common stock in exchange for $7,860 in cash, for an aggregateoffering price of $13.3 million.  As aresult, at June 4, 2007, Luxor Capital Partners, LP owned approximately 5% ofthe Company’s outstanding common stock and Luxor Capital Partners Offshore,Ltd. owned approximately 7% of the Company’s outstanding common stock.

**Item 3.          DEFAULTSUPON SENIOR SECURITIES**

None.

**Item 4.          SUBMISSIONOF MATTERS TO A VOTE OF SECURITIES HOLDERS**

None.

**Item 5.          OTHERINFORMATION**

None.

**Item 6.          EXHIBITS**

Theexhibits filed herewith or incorporated by reference herein are listed on theExhibit Index attached hereto.

 

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**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
|                       | Ebix, Inc. |
|-----------------------|------------|
|                  |       |
|                  |       |   |
| Date: August 10, 2007 | By         | /s/ Robin Raina |
|                  |       | Robin Raina |
|                  |       | Chief Executive Officer |

 

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EXHIBIT INDEX

 
| EXHIBIT NO. | ** ** | **DESCRIPTION**                                                                                                                                                                                                                                                                                |
|-------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                                                                                                                                                           |
| 3.1         |       | Certificates of Incorporation of the Company, as  amended (including Certificates of Designations) (incorporated by reference  to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period  ended March 31, 2005 and incorporated herein by reference).                  |
| 3.2         |       | Bylaws of the Company (filed as Exhibit 3.2 to the  Company’s Annual Report on Form 10-K for the fiscal year ended December 31,  2000 and incorporated herein by reference)                                                                                                               |
| 10.1        |       | Share Purchase Agreement between Ebix and Luxor  Capital Partners, LP and Luxor Capital Partners Offshore, Ltd. and dated June  1, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Current  Report on Form 8-K dated June 1, 2007 and incorporated herein by reference). |
| 31.1        |       | Certification of Chief Executive Officer Pursuant to  13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).                                                                                                                                                                          |
| 31.2        |       | Certification of Interim Chief Accounting Officer  Pursuant to 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).                                                                                                                                                                 |
| 32.1        |       | Certification of Chief Executive Officer Pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                       |
| 32.2        |       | Certification of Interim Chief Accounting Officer  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                              |

 

 

 

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