the truth about ebix, robin raina, and the robin raina foundation

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This exposé explains why investors should immediately sell Ebix shares and stay away until more information is provided by the company. We believe the reported financial statements are not reliable, accurate, or complete. We also believe the shares deserve to be halted until the issues we address are remedied.

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GOTHAM CITY RESEARCH LLC

www.gothamcityresearch.com

info@gothamcityresearch.com

GOTHAM CITY RESEARCH LLC

THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION

"We're more Catholic than the Pope." (Former) co-Chairman Jo Lernout, of Lernout & Hauspie, September, 25 2000

"Ebix stands for integrity, in every form and fashion." CEO & Chairman Robin Raina, of Ebix, Inc., April 1, 2011

Disclaimer: By reading this report, you agree that use of GOTHAM CITY RESEARCH LLCs research is at your own risk. In no event will you hold GOTHAM CITY RESEARCH LLC or any affiliated party liable for any direct or indirect trading losses caused by any information in this report. This report is not investment advice or a recommendation or solicitation to buy any securities. GOTHAM CITY RESEARCH LLC is not registered as an investment advisor in any jurisdiction. You agree to do your own research and due diligence before making any investment decision with respect to securities covered herein. You represent to GOTHAM CITY RESEARCH LLC that you have sufficient investment sophistication to critically assess the information, analysis and opinion in this report. You further agree that you will not communicate the contents of this report to any other person unless that person has agreed to be bound by these same terms of service. You should assume that as of the publication date of this report, GOTHAM CITY RESEARCH LLC stands to profit in the event the issuers stock declines. We may buy, sell, cover or otherwise change the form or substance of its position in the issuer. GOTHAM CITY RESEARCH LLC disclaims any obligation to notify the market of any such changes. Our research and report includes forward-looking statements, estimates, projections, and opinions prepared with respect to, among other things, certain accounting, legal, and regulatory issues the issuer faces and the potential impact of those issues on its future business, financial condition and results of operations, as well as more generally, the issuers anticipated operating performance, access to capital markets, market conditions, assets and liabilities. Such statements, estimates, projections and opinions may prove to be substantially inaccurate and are inherently subject to significant risks and uncertainties beyond GOTHAM CITY RESEARCH LLCs control. Our research and report expresses our opinions, which we have based upon generally available information, field research, inferences and deductions through our due diligence and analytical process. GOTHAM CITY RESEARCH LLC believes all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable. However, such information is presented as is, without warranty of any kind, whether express or implied. GOTHAM CITY RESEARCH LLC, makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. All expressions of opinion are subject to change without notice, and GOTHAM CITY RESEARCH LLC is not obligated to update or supplement any reports or any of the information, analysis and opinion contained in them. GOTHAM CITY RESEARCH LLC has filed as a whistleblower with the Internal Revenue Service and the Securities Exchange Commission.

Page 2 of 46

Table of Contents I. II. III. IV. V. VI. VII. VIII. IX. Disclaimer Summary Introduction Ebixs Accounting: Unreliable, Inaccurate, and Incomplete The Tax Strategy: Sham in Fact or Sham in Substance Ebixs Stock Deserves to be Halted Shares are Worth No More Than $5 Robin Raina Foundation: a Crumbling Wall of False Integrity End Notes

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GOTHAM CITY RESEARCH LLCa SUMMARY OF FACTS There is a $66 million undisclosed related party loan between Ebix Singapore and an unnamed related party. Australian revenues are only 32% of the amounts stated in the SEC filings, according to Australian filings. 2010 Singapore intangible assets are misstated by $67 million. 2011 long-lived assets do not add up. The 2010 & 2011 10K filings were filed before the Singapore 2010 financial statements were signed off. The Confirmnet acquisition cost 30% more according to the India filings than it did according to the SEC filings. Ebix could not have paid for Planetsoft, without moving cash from India, unless the cash never left the US. Less than 5% of Singapores intangible assets are IPrelated, i.e. most of the assets lack economic substance. EZ-Datas IP was transferred to Singapore yet Raina says No US IP has been transferred to any other country. Ebixs Singapore and India subsidiaries financial statements for 2011 remain unavailable. Core business is declining, tax rate is rising, and goodwill write-offs and debt maturities are looming. The Robin Raina Foundations IRS filings are full of material accounting irregularities. Raina misrepresented his foundations spending by 300+%. Company: EBIX Ticker: EBIX Share price: $18.34 Market cap: $711M Enterprise value: $764M 52-week high: $26.28 52-week low: $15.26 Shares outstanding: 37.28M Float: 34.86M Avg. Daily Vol: 447K % float short (1/15): 42.2% TTM Revenue: $189M TTM Net income: $69M 2012 YTD FCF: -$5M Net debt: -$53M Tangible book: -$67M Dividend yield: 2% FYE: Dec. 31 Auditor: Cherry Bekaert Holland

GOTHAM CITY RESEARCHS OPINIONS Ebix will restate historical results likely significantly as a result of the issues covered in this report & elsewhere. Ebix stock should be halted until the financial statements are reliable, accurate, and complete. Cherry Bekaert Holland should not sign off on Ebixs 2012 financials, without Ebix Singapores 2011 and 2012 filings. Ebixs stated tax strategy is supported by sham in fact and/or sham in substance transactions. Ebix shares are worth no more than $5.00/share, & approach $0.00 as the IRS, debt, & other risks unfold.

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INTRODUCTIONGOTHAM CITY RESEARCH first heard about Ebix last October, when we saw an Ebix-related lawsuit hit our inboxes. These kinds of lawsuits are normally thrown out in federal court, but this one did not get thrown out. Our interest in the Ebix story increased as we read through the complaint. Given the alarming accusations in the lawsuit, we soon decided to investigate for ourselves, and take a fresh look into the company. We read over 10,000 pages of documents from Sweden, Singapore, India, Australia, New Zealand, & the United States pertaining to the company. We consulted with professionals from the disciplines of forensic accounting, law, transfer pricing, background investigations, finance, and software. We found assets not adding, cash disappearing, and management misrepresenting. The more we looked, the more we found reality to be far worse than the prior critics had made it out to be. For example, we discovered a $66 million undisclosed related party loan1, $67 million accounting irregularity in long-lived assets2, and Australian revenues at a fraction of what the SEC filings disclosed, per the Australian filings3. We concluded that (i) Ebixs financial statements are unreliable, inaccurate, and incomplete, (ii) their tax strategy is a sham, and (iii) the stock should be halted. We decided it was important to go public with our findings after we found out that Robin Rainas misrepresentations did not end with Ebix. For starters, he recently exaggerated to the South Asia Times (who named him man of the year) how much Robin Raina Foundation (RRF) typically gives every year4: South Asia Times: How much you give to the foundation? What is its annual outlay? Robin Raina: I hate to talk about it. But yes, a majority of the money that comes in for the foundation comes from me. In a given year, RRF will typically spend about $2 million. In fact, RRF has spent at most $3.7 million combined since inception, as the IRS Form 990s reveal5:thousands $ Total expenses2004 2005 2006 2007 2008 2009 2010 2011 TOTAL

($56)

($326)

($598)

($441)

($471)

($704)

($1,054)

($86)

($3,735)

Rainas bogus claims to the South Asia Times are morally reprehensible, but not illegal. We do wonder, though, about his declarations that RRFs form 990s are true, correct, and complete, made under penalties of perjury.6 As it turns out, there are, in fact, accounting irregularities found in the Robin Raina Foundations form 990s, as we discuss later in this report. As Autonomy, Lernout & Hauspie, AremisSoft, Network Associates, and other epic software frauds remind us: when you put together a bunch of bushes, you dont get a tree you get a bunch of scraggly, old bushes. We believe Ebix is no different, having grown largely due to its improper tax strategy, luck, dodgy acquisitions, and Rainas ability to fool some of the people, all of the time. We believe that the chickens are about to come home to roost for Ebix and Raina. Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you dont have the first, the other two will kill you. Warren Buffett Page 5 of 46

Ebixs Accounting: Unreliable, Inaccurate, and IncompleteWhat Ebix and CEO Robin Raina Have Said Regarding the Integrity of the Company and its Filings On April 1st, 2011 (April Fools Day), a week after a negative report was published on Seeking Alpha1, CEO Robin Raina hosted an Investor Conference. The below slide is from said conference2:

On November 5th, 2012, a Bloomberg story titled Ebix Accounting Practices Said to Be Probed by SEC3 claimed that Ebix is being investigated by the U.S. Securities and Exchange Commission for its accounting practices, four people with direct knowledge of the probe said. Ebix swiftly issued a press release4, in which Robin Ra