GOTHAM CITY RESEARCH LLC www.gothamcityresearch.com info@gothamcityresearch.com

GOTHAM CITY RESEARCH LLC

Endurance International Group:

A Web of DeceitPrice Target: $0.00 per share

Endurance View Reality ARPU increased +11% ARPU decreased -13% “High Quality Subscribers” “High Quality Products” “We are transparent and honest” “Customers First”

History of terrorist & spam/malware subs R&D as % revenue is 1/6th of Godaddy’s A U.A.E. subsidiary tried to deceive the US Service outages, poor customer service

“We leave it better than we found it” Customers say otherwise; High churn

“The United States filed an early warning against all 31 proposals submitted by Radix Registry becausethe application "inappropriately" included a supposed emailed recommendation from the FederalBureau of Investigation. Those proposals - which were for options like.shop,.web,.bank and.law - did nothave FBI backing, the federal government wrote.”

Radix Registry is an Undisclosed Subsidiary of Endurance International Group

Page 2 of 61

Disclaimer:

By reading this report, you agree that use of GOTHAM CITY RESEARCH LLC’s research is at your own risk.In no event will you hold GOTHAM CITY RESEARCH LLC or any affiliated party liable for any direct orindirect trading losses caused by any information in this report. This report is not investment advice or arecommendation or solicitation to buy any securities. GOTHAM CITY RESEARCH LLC is not registered asan investment advisor in any jurisdiction. Gotham City Research LLC is not affiliated or associated withGotham Asset Management, LLC or any of its affiliates.

You agree to do your own research and due diligence before making any investment decision withrespect to securities covered herein. You represent to GOTHAM CITY RESEARCH LLC that you havesufficient investment sophistication to critically assess the information, analysis and opinions in thisreport. You further agree that you will not communicate the contents of this report to any other personunless 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 toprofit in the event the issuer’s stock declines. We may buy, sell, cover or otherwise change the form orsubstance of its position in the issuer. GOTHAM CITY RESEARCH LLC disclaims any obligation to notifythe market of any such changes.

Our research and report includes forward-looking statements, estimates, projections, and opinionsprepared with respect to, among other things, certain accounting, legal, and regulatory issues the issuerfaces and the potential impact of those issues on its future business, financial condition and results ofoperations, as well as more generally, the issuer’s anticipated operating performance, access to capitalmarkets, market conditions, assets and liabilities. Such statements, estimates, projections and opinionsmay prove to be substantially inaccurate and are inherently subject to significant risks and uncertaintiesbeyond GOTHAM CITY RESEARCH LLC’s control.

Our research and report expresses our opinions, which we have based upon generally availableinformation, field research, inferences and deductions through our due diligence and analyticalprocess. GOTHAM CITY RESEARCH LLC believes all information contained herein is accurate andreliable, 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 orimplied. 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 itsuse. All expressions of opinion are subject to change without notice, and GOTHAM CITY RESEARCH LLCis not obligated to update or supplement any reports or any of the information, analysis and opinioncontained in them.

You should assume that GOTHAM CITY RESEARCH LLC has and/or will submit our findings with theSecurities Exchange Commission, and other entities.

Page 3 of 61

Table of Contents

I. DisclaimerII. Summary

III. IntroductionIV. EIGI Uses Related Parties (Itself?) to Inflate EarningsV. 30%-67% of Directi’s Revenues are Suspect

VI. EIGI’s Undisclosed U.A.E. subsidiary and its False CredentialsVII. Average Revenue per Subscriber is Down -13%, Not Up +11%

VIII. Suspect Customers: Terrorism & Malware-relatedIX. Underinvestment leads to Service Outages and High ChurnX. 40%-100%+ of Profits are Suspect: Putting it all Together

XI. Valuation: Interest Expense Exceeds Normalized Adj. EBITDAXII. Appendix A: The Ravichandran Ties that Blind

XIII. Appendix B: Directi Revenue Does Not ReconcileXIV. Appendix C: Organic Growth CalculationsXV. End Notes

Page 4 of 61

GOTHAM CITY RESEARCH LLC

aGOTHAM CITY RESEARCH’S OPINIONS

EIGI shares will go to $0.00 per share, as the company willstruggle to service its debt. Normalized EBITDA margins donot cover interest expense.

Recent years’ reported EBITDA benefited from attractingBlinkx-like revenue (spam/malware, terrorism, etc.).

EIG profits at the expense of its customers (serviceoutages, poor customer service, etc.).

SUMMARY OF FINDINGS

40%-100%+ of EIGI’s reported profits are suspect. 2014 Average Revenue per Subscriber (ARPS) actually

declined -13%. EIGI’s 10K claims ARPS grew +11%. Organic growth overstated ~3x. We calculate organic

growth to be ~5.6%, not 13.0%-15.0% as EIG claims. Directi’s revenues per the Indian filings are 30%-67% lower

than reported in EIGI’s 10K. Directi revenue figures within the EIGI 10K do not add up. EIGI paid 17% of its ’12-’14 EBITDA to a related party tied

to the CEO. The related party seems to be Endurance. No international revenue disclosures, despite promoting

itself as an ‘international growth’ concern. An undisclosed subsidiary falsely claimed to the US

Government that the FBI “recommended” them. EIGI's BlueHost, JustHost, HostGator and HostMonster

hosted terrorist websites as recently as few weeks ago. EIGI domains hosted 1,000s of spam/malware-related sites

per spam/malware watchdogs (the hosting world’s Blinkx). EIGI spends ~1/6th on core infrastructure vs Godaddy. Customer reviews are consistently poor. A 15+ year industry executive states EIGI uses a churn

model/definition that is “not industry common practice,while using industry terminology.”

EIGI is free cash flow negative. Godaddy is FCF positive. The management team (including the CEO) recently sold

~30% of their stake in EIGI.

Company: EnduranceInternational Group

CEO: Hari Ravichandran

Ticker: EIGI

Exchanges: NASDAQ

Price Target: $0.00/share

Share price: $21.94/share

Market cap: $3.03B

52-week high: $23.49

52-week low: $11.88

Shares outstanding:132.36M

2014 FCF: -226M

EBITDA 3-year avg: $70M

Interest expense 3-yearavg: $94M

2014 Cash: $33M

2014 Debt: $1,020M

Fiscal Year: Dec. 31

Auditor: BDO

IPO Date: November 2013(JOBs ACT IPO)

Page 5 of 61

INTRODUCTION

Endurance International Group is an extraordinary company. EIGI’s stock has risen 2x since going publicin late 2013, handily outperforming its peers. The company has also generated industry-leading margins1:

Yet Endurance also appears to be an extraordinarily poor company, bleeding cash:

We tend to get excited when we see such diverging qualities in a company, so we decided to examinefurther. These initial red flags troubled us, as they tend to be indicative of extraordinarily bad companies:

High debt level for a traditionally low ARPU and high churn business. Related party transactions between EIGI and entities tied to EIGI CEO. No International revenue disclosure, despite promoting itself as an international growth story. Suspect accounting, some of which widely deviates from its peers.

We dug deeper. Our due diligence spanned across several continents and included industry experts’input. We have come to believe that Endurance is, indeed, an extraordinary company – just for all thewrong reasons. Once we learned that CEO Hari Ravichandran has been spending an unusual amount oftime promoting the stock rather than running the business in recent months – 15+ investor meetings inrecent months2 – we decided to share our findings with the public.

Gotham City Research believes 40%-100%+ of reported profits are suspect, and that normalized profitsdo not cover interest expense for the following reasons:

Related party transactions account for 17% of EBITDA, and resemble transactions with it-self. ARPU declined -13% yet EIGI’s 10K claims ARPU grew +11%. Accounting irregularities found with its International business. A significant undisclosed subsidiary lied to the US government about its credentials. The company hosts terrorist-related websites, and a high % of malware/spam-related accounts. Churn is high as a result of service outages, poor customer support, and slow loading speeds.

EIGI claims otherwise, yet EIGI has under-invested in its business, spending 80% less oninfrastructure vs. Godaddy.

ADJUSTED EBITDA MARGIN - EIGI vs PEERS2012 2013 2014

GDDY 19.1% 17.4% 19.6%WWWW 35.5% 31.1% 29.8%

EIGI 45.8% 40.0% 37.4%

EIGI Free Cash Flow vs Peers$ in 000s 2012 2013 2014

GDDY $46,745 ($55,153) $73,249

WWWW $62,788 $88,082 $82,794

EIGI ($306,652) ($94,294) ($226,156)

Page 6 of 61

EIGI Uses Related Parties (Itself?) to Inflate Earnings

Endurance’s EBITDA Margins are Exceptionally High Relative to its Peers

EIGI’s adjusted EBITDA margins handily outperform its web hosting peers’. Godaddy, the industry leader,is twice as large as Endurance yet its reported Adjusted EBITDA margins are half that of EIGI’s1:

Although improbable, it’s possible that EIGI is actually a great business, leadings its peers, in anotherwise commoditized industry. Endurance attributes its ‘superior performance’ to ‘best in class cloudenablement technology platform’, ‘high quality products’, and ‘high quality subscribers’:2

Gotham City Research believes that the company’s above representations are not in agreement withreality. In fact, it seems that the Company is characterized by low quality products, low qualitysubscribers, mediocre/poor technology platforms. The remainder of the report details how exactly. Wefirst begin by explaining how we believe EIGI uses related parties to overstate earnings.

ADJUSTED EBITDA MARGIN - EIGI vs PEERS2012 2013 2014

GDDY 19.1% 17.4% 19.6%WWWW 35.5% 31.1% 29.8%

EIGI 45.8% 40.0% 37.4%

Page 7 of 61

EIGI Uses Related Parties, Improper Accounting, & Other Dubious Practices to Overstate Earnings

We believe the keys to EIGI’s success have been its Ravichandran related parties, suspect accounting, &other dubious business practices (these have helped the CEO unload ~30% of his shares recently). Withrespect to the related parties, we believe the company has engaged in two parallel schemes:

EIGI uses the Ravichandran entities and its other captive vendors to overstate profits:

Ravichandran entities sell its services to EIGI at below-market prices (while harming customersvia poor user experiences), allowing EIGI to achieve an artificial cost advantage:

EIGI SecretlyControls

RavichandranEntities

EIGI Uses them toManufacture its

Reported Profits &Accounting

EIGI Stock PriceAppreciates in

Value

Realized CapitalGains in EIGI StockCompensate theRavichandrans

RavichandranEntities provide

EIGI servicesbelow-market

EIGI benefits byAchieving

Artificially HigherProfit Margins

EIGI's PositiveEarnings BoostEIGI Stock Price

Realized CapitalGains in EIGI StockCompensate theRavichandrans

Page 8 of 61

The Largest Related Parties are Secretly Controlled by the Company Itself

Gowex, Quindell, Tile Shop, Crazy Eddie’s, Sino-Forest, and many other frauds shared (at least) onecommon characteristic: material related party transactions with captive or quasi-captive entities. Inmany cases, these captive or quasi-captive entities were substantially the companies themselves.Gotham City Research believes that EIGI’s largest “related parties” are substantially EIGI itself for thefollowing reasons:

Endurance CEO Hari Ravichandran and/or immediate family were and/or is a director and/orowner of related parties, Glowtouch Technologies and Innovative Business Services (“IBS”).

The transactions are material to EIGI, as the transactions have accounted for at least 16.5% of2012-2014 EBITDA.

EIGI’s payments to Glowtouch account for the majority of Glowtouch’s revenues. Glowtouch currently staffs and operates the HostGator India (an Endurance subsidiary) business. Glowtouch/Endurance employees name Glowtouch/Endurance as if they’re the same entities

on linkedin or other on-line profiles. http://www.glowtouch.co.in/ website doesn’t work as of April 17, 2015. We have documentation that shows Glowtouch pays &/or receives payment-in-kind from EIGI. Pattern of related party transactions beyond those involving Ravichandran, including loans at

favorable rates between Endurance and its management & “consulting” contracts. EIGI was exempted from the auditor attestation requirements in the assessment of internal

control over financial reporting, because it technically qualifies as an “emerging growthcompany” per the JOBS Act (despite being in business since the late 1990s).

Endurance International appears to be web hosting’s Crazy Eddie’s, but with an Indian twist:

Crazy Eddie’s Endurance International GroupAntar Family Ravichandran Family

Suspect Accounting Suspect AccountingSeemingly high growth Seemingly high growth

Captive Vendor (Wren Distributors) Entities tied to the CEORelated Party Loans & Other Payments Related Party Loans & Other Payments

Endurance the “Customer”

CEO Ravichandran

Glowtouch the “Vendor”

Director Ravichandran

Page 9 of 61

The Ravichandran Related Party Transactions – at least 16.5% of EBITDA

Endurance has paid $34.5 million – roughly equal to 16.5% of EBITDA – to Ravichandran companies (i.e.,substantially to itself) over the last 3 years3:

The above payments include those made out to Glowtouch Technologies, Diya Systems, Tregaron IndiaHoldings (‘Glowtouch’ refers to all Ravichandran entities), and IBS.

Endurance CEO Hari Ravichandran as Director of Glowtouch

Hari’s employment contract with Endurance4:

So Hari Ravichandran, according to the employment agreement, is concurrently the CEO of Enduranceand Director of Glowtouch Technologies.

Glowtouch Technologies = Tregaron India Holdings LLC = Diya Systems

See the appendix for further details regarding the Ravichandran’s web, but here are the highlights:

Glowtouch Technologies = Tregaron India Holdings LLC. Diya Systems is a subsidiary of Glowtouch, run by Endurance CEO’s father. Tregaron India Holdings owned by Hari’s father and mother Hari’s sister is President of Glowtouch. Hari seems to owe here a few favors.

ENDURANCE's PAYMENTS TO RELATED PARTIES$ in 1,000s 2012 2013 2014 TOTAL

EBITDA $4,651 $59,537 $146,427 $210,615Payments to Related Parties $8,598 $10,300 $15,800 $34,698

Payments as % of EBITDA 184.9% 17.3% 10.8% 16.5%

Page 10 of 61

Endurance Accounts for Most of Glowtouch’s Revenue

Crazy Eddie’s, the leading electronics retailer of the 1980s, used a distributor to facilitate its accountingfraud. Crazy Eddie’s distributor was not a related party, but most of its revenue came from Crazy Eddie’s.As a result, Crazy Eddie’s exerted significant control over the distributor, helping it inflate profits.

Sam Antar, former CFO of Crazy Eddie’s (“CRZY”), describes in detail how CRZY’s cozy relationship withits distributor/supplier helped it commit accounting fraud5:

“Crazy Eddie’s had a very cozy relationship with a vendor known as Wren Distributors (Wren).We were Wren's largest customer, accounting for 35% of its revenues. We purchased over 10%of our merchandise from Wren. In order to inflate our inventory without adding to our accountspayable, I asked Wren to ship us $3 -$4 million in merchandise before 1986 year-end, but tohold off billing until after the auditors completed the year-end audit. Because the merchandisewas included in the year-end inventory count without recording the corresponding accountspayable to Wren, we were able to inflate income by $3-$4 million.

In 1987, we continued to take advantage of our relationship with Wren. I pressured Wren to shipus about $5-$7 million in merchandise before year-end. The merchandise was included in theyear-end inventory count without being included in the amount owed to the vendor.”

The Endurance/Glowtouch setup seems worse as we believe Ravichandran’s grip over the relatedparties is far tighter. Endurance accounts for most of the company’s revenue, just as Crazy Eddie’s didwith its distributor, corroborating our belief6:

Glowtouch Does Not Even Mention Endurance as a Case Study

Seems strange given Endurance accounts for most of its revenue7:

Most of Glowtouch's Revenue is from EIGI$ in millions 2010 2011 2012 2013

Glowtouch Total Revenue $7.5 $8.1 $10.4 $13.2from EIGI $5.1 $5.5 $6.4 $7.3

From EIGI as % of Total 68.4% 67.8% 61.5% 55.3%

Page 11 of 61

Glowtouch India’s website does not function

Glowtouch India’s operations seem largely non-functional, casting further doubt that Glowtouch is anindependent entity: http://www.glowtouch.co.in/

Endurance India and Glowtouch India Share the Same Address

Endurance’s address in India (Hostgator is an Endurance subsidiary)8:

Glowtouch, via its Diya subsidiary shares the same address as Endurance i.e. Hostgator India9:

Page 12 of 61

Glowtouch Pays Endurance or Receives Payments in Kind

Glowtouch/Diya seems to pay or receive payment in kind from Endurance10:

Endurance/Glowtouch Employees Refer to Endurance/Glowtech Interchangeably

A man by the name of Vivek Ahuja refers to Endurance International Group / Glowtouch Technologies asif they were the same entity in his linked profile: (incidentally, CEO Hari Ravichandran writes arecommendation):11

Page 13 of 61

Glowtouch Helps Endurance Manufacturer Margin

Glowtouch seems like the perfect vehicle whereby Endurance can manufacture reported profits as theywish in order to meet Wall Street’s quarterly expectations (especially when combined with a slew ofaccounting shenanigans we detail in following sections)12:

Glowtouch Helps Endurance Make Margin at the Expense of Endurance Customers

GlowTouch provides outsourcing services such as: customer and technical support, billing support, webdevelopment and maintenance, data entry and quality assurance (QA) testing.13

Endurance’s tech infrastructure spending is less than 1/5th of Godaddy’s (as a % of revenue):14

Unsurprisingly, Endurance customers have experienced frequent service outages, poorcustomer/technical support, slow speeds, etc. (as detailed later in this report)15:

Gotham City Research believes these are no coincidences. We also believe that EIGI’s practice ofprofiting at the expense of its customers is coming to an end. EIGI is no longer a private companyoperating in the shadows. Furthermore, Godaddy recently went public. Sunshine will prove to be thebest disinfectant.

EIGI Consistently Beats Sell-side/Guidance Adj. EBITDA2013 2014

Q3 Q4 Q1 Q2 Q3 Q4Adj. EBITDA (Estimate) $41.2 $38.5 $56.7 $55.3 $56.3 $60.0

Adj. EBITDA (Reported) $49.9 $46.2 $59.1 $56.5 $58.0 $62.0

$ in millions

RESEARCH & DEVELOPMENT SPENDING2012 2013 2014

GDDY 19.3% 18.4% 18.3%WWWW 8.4% 6.6% 5.5%WIX 38.4% 36.9% 40.8%EIGI 4.7% 4.5% 3.1%EIGI as % of GDDY 24.5% 24.3% 16.9%

Service Outages are Worsening

Date DurationAug-13 24 hours of downtimeDec-13 3 days of downtimeApr-14 24 hours of downtime

May-14 9 hours of downtimeOct-14 5 days of downtime

Page 14 of 61

30%-67% of Directi’s Revenues are Suspect

Endurance International Group claims that Directi and International are priorities for organic growth1:

Given that Directi is an International company, the #2 and #4 priorities listed above suggest that EIGI’sinternational business is a very big priority. Yet EIGI reveals very little information about its internationaloperations. We think we know why.

Gotham City Research believes that Endurance’s international revenues are neither accurate nor reliable.We specifically believe 30%-67% of Direct’s revenues are of dubious quality for the following reasons:

EIGI does not disclose International revenues (yet pitches itself to Wall Street as an InternationalCloud play). Godaddy discloses international revenue.

EIGI’s International tangible long-lived assets are only 2.9% of total tangible long-lived assets. 30%-67% of Directi’s reported revenue do not reconcile with Directi’s Indian filings. EIGI has a few different figures for Directi revenue in its 2014 10K. None of them reconcile with

one another. It’s as if Directi has several sets of books, just as the characters in The Producer did. EIGI management did not assess the effectiveness of internal control over financial reporting of

Directi. The Directi website does not appear to be maintained or updated. Directi’s owners have publicly claimed that its business is worth $300 million + for many years,

yet EIGI acquired it for 67% lower, roughly ~$100 million. EIGI has an undisclosed international subsidiary that EIGI secretly acquired for ~$60 million. We

believe this is the “Domain Name Business” EIGI cryptically refers to in the 10K. We think weknow why EIGI does not disclose this subsidiary. See the next section for more informationabout this subsidiary.

Page 15 of 61

EIGI Sells Itself as an International Growth Play but it Does Not Disclose International Revenues

Endurance’s explanation, as to why it does not disclose international revenue is one of the funniest (andabsurd) we’ve ever read. It claims it is impracticable to do so, and that there are limitations in certainaccounting systems2:

"It is impracticable for the Company to provide revenue information by geography for December31, 2012, 2013 and 2014 due to unavailability of geographic information for some subscribersacquired as part of previous acquisitions as well as limitations in certain accounting systems thatare currently in use."

Gotham City Research believes EIGI’s explanation above is a serious misrepresentation (we’re reportingEIGI to the SEC and other regulatory bodies), for the following reasons:

EIGI discloses tangible long-lived assets and total loss before income taxes of international origin(so much for ‘impracticable’ and ‘limitations in certain accounting systems’)

EIGI discloses Directi revenue (though there are serious issues with the Directi numbers) andDirecti is an international company. So how is it ‘impracticable’ for EIGI to report totalinternational revenue, when it already discloses its largest contributor to international revenue?

CEO Ravichandran states: “But primarily all the growth on the international side at this point forthis year we anticipate coming through organic means.”3 How can he make this claim aboutinternational organic growth without knowing the 2014 international revenue?

Page 16 of 61

“So it’s not enough data to actually have a sort of a real comparison there. But international --talk about the Directi business to be the large portion of our localized international business, itwas about 11%ish of our revenue, between 10% to 11%.” – Did CEO Ravichandran say 11% ofrevenue was from ‘localized international business’ ?

Godaddy discloses international revenue4

Endurance has paid its auditor considerable sums of money in the past5

it seems EIGI has the resources to render itself able to report international revenue (Endurancehas paid BDO more in fees than it has paid the US Federal or Local governments in taxes). Onewould think that the least EIGI can do to thank Uncle Sam for the low tax bill (assuming they arefiling taxes truthfully), would be to file accurate, reliable, and truthful financial statements.Perhaps it’s too much to ask.

EIGI’s Reported Directi Revenue Figures are Unreliable

After reviewing EIGI’s Directi figures in EIGI’s 10K, one would get the impression EIGI manages severalsets of books just as the characters in The Producers did. $29 million does not equal $31.3 million andEIGI provides no explanations as to why they differ (the highlighted amounts differ)6:

“For the year ended December 31, 2014, $29.0 million of revenue from the Company’s 2014acquisition of Directi was included in the Company’s consolidated statement of operations andcomprehensive loss.”

EIGI has Paid its Auditor More than the US Government$ in 1,000s 2012 2013 2014 TOTAL

Income taxes paid $796 $1,502 $2,615 $4,913Tax fees paid to BDO $538 $1,080 $1,343 $2,960Audit + related fees $695 $1,253 $1,344 $3,292

TOTAL paid to BDO $1,234 $2,332 $2,687 $6,253Paid to BDO vs USA 1.5x 1.6x 1.0x 1.3x

Page 17 of 61

“Revenue increased by $109.5 million, or 21%, from $520.3 million for the year endedDecember 31, 2013 to $629.8 million for the year ended December 31, 2014. Of this increase,$31.3 million was related to revenues from our acquisition of Directi.”

The company makes the following claim:

Management did not assess the effectiveness of internal control over financial reporting of Directi,Webzai, BuyDomains and Arvixe because of the timing of the acquisitions which were completedduring 2014. Our audit of internal control over financial reporting of Endurance International GroupHoldings, Inc. also did not include an evaluation of the internal control over financial reporting ofDirecti, Webzai, BuyDomains and Arvixe.

The above explanation is notably strange, because Endurance completed the Directi acquisition byJanuary 2014, unlike Webzai, BuyDomains, and Arvixe, which were acquired in Q4 2014. Is the companyhedging itself, fully aware that their reported Directi figures are inaccurate and unreliable?

This explanation does not reconcile – “Directi, Webzai, BuyDomains and Arvixe representedapproximately 3% and (2)% of our total assets and net assets, respectively as of December 31,2014 and 6% of our total revenues for the year ended December 31, 2014.” –

a. With respect to revenue, the application of purchase accounting requires us to recordpurchase accounting adjustments for acquired deferred revenue, which reduces therevenue recorded from acquisitions.

30%-67% of Directi’s Revenues According to EIGI 10K Don’t Reconcile with Indian Filings

We reviewed Directi’s Indian filings and estimated total Directi’s revenue according to them7:

We calculated a ‘Low’ and ‘High’ in order to factor in:

Directi shifted revenue around between subsidiaries in 2013 and 2014 EIGI’s representation of Directi GAAP revenue are inconsistent as we discussed in prior page. On average, the variance between the Indian filings seems to fall between 30%-67%

See the appendix for a more detailed breakout of the above calculations.

2014 Directi Revenue - EIGI 10K vs Directi Indian FilingsLow High Average

Indian Filings $12,053,864 $19,523,551 $15,788,70710K Adj. Revenue $48,500,000 $48,500,000 $48,500,000

% variance (75.1%) (59.7%) (67.4%)10K GAAP Revenue $29,000,000 $31,300,000 $30,150,000

% variance (34.9%) (24.3%) (29.6%)

Page 18 of 61

We believe the following likely explain the above variances:

Directi revenues are materially overstated (EIGI’s refusal to disclose international revenue andexistence of several varying figures for Directi revenue support this theory).

The unexplained differences are fully explained by the Radix FZC and/or P.D.R. Solutions FZCsubsidiaries.

Endurance does not want to draw attention to its international operations (we explore why, inthe next section), specifically because it has problem undisclosed subsidiaries.

Endurance does not want to draw attention to its international operations (we explore why, inthe next section), specifically because they play critical roles in driving suspectmalware/clickfraud related revenue.

Directi.com about section on website hasn’t been updated since 20078

Page 19 of 61

EIGI’s undisclosed U.A.E. subsidiary & its False Credentials

Endurance mentions buying a “Domain Name Business” (without naming it) in its most recent 10K1:

In addition, in connection with the acquisition of Directi, the Company was initially obligated tomake additional aggregate payments of up to approximately $62.0 million subject to specifiedterms, conditions and operational contingencies. Of this $62.0 million, the Company hascommitted a total of $36.2 million consisting of cash payments of $27.2 million and future earn-out payments of $9.0 million to purchase a domain name business from a company associatedwith the founders of Directi Holdings

Radix Registry is the undisclosed subsidiary and has misrepresented its credentials to the USA

We believe Radix is the “Domain Name Business” for the following reasons:

Radix is related to the founders of Directi Holdings, the Turakhia brothers & Brijesh Joshi. Radix is a “domain name business” (specifically participates in gTLD auctions) Those familiar with Directi and Endurance (at the time acquisition discussions) wrote, “In buying

Directi, Endurance would also get Radix Registry which has 29 active new gTLD applications ofwhich 26 are in contention.” It seems they were off on the deal terms, but right on the target.

Who.is shows Radix Registry’s name as ‘PDR LTD. D/B/A PUBLICDOMAINREGISTRY.COM’ “PDR LTD. D/B/A PUBLICDOMAINREGISTRY.COM” is a wholly-owned subsidiary of Endurance:

Radix FZC and P.D.R. Solutions FZC (a EIGI subsidiary) are in the same building in the UAE.

Page 20 of 61

Radix Registry Lied to the US Government and its Radix/Directi Founders Are Highly Suspect

The US Federal Government filed an early warning against all 31 proposals submitted by Radix Registry,in Radix’s attempt to register the .army, .navy and .airforce and other addresses on the Internet. Radix’sapplication "inappropriately" included a supposed emailed recommendation from the Federal Bureau ofInvestigation (seems the equivalent of a CEO lying about graduating from Harvard)2:

Radix Registry is suspect for reasons beyond attempting to deceive the US Government:

Radix FZC (its legal name) is a ‘Free Zone Company’ in Hamriyah Free Zone, a tax haven in theUnited Arab Emirates (think of it as the Singapore for Indians and others).

Radix FZC does not appear in the Hamriyah Free Zone company directory, despite Hamriyahlisting over 5,890 entities (it is our understanding that there are only 5,000ish total entities).3

PrivacyProtect.org, controlled by Radix Registry’s founders (i.e. the Turakhia brothers), havebeen the losing respondent in more than 60 Uniform Domain Name Dispute Resolution Policy(“UDRP”) proceedings.4

The ICANN “gTLD Applicant Guidebook” forbids applicants with a history of adverse UDRPdecisions from applying for new gTLDs.

Endurance Hosts an Entity U.A.E. has Designated as a Terrorist Organization

United Arab Emirates Designated the Muslim American Society (apparently MAS was created in secretby U.S. Muslim Brotherhood leader) as a terrorist organization.5 Endurance hosts the Muslim AmericanSociety via its Fastdomain and Hostmonster subsidiaries6:

Page 21 of 61

Average Revenue per Subscriber is Down -13%, Not Up +11%

“The least initial deviation from the truth is multiplied later a thousandfold.” ― Aristotle

Reported Average Revenue per Subscriber (“ARPS”) is Growing but Actual ARPS is Declining

Despite the related party transactions, suspect international revenue, undisclosed subsidiary, and theundisclosed subsidiary’s lies, perhaps Endurance possesses a strong core business. After all, EIGI reportsvery strong ARPU (they call it “ARPS” or Average Revenue per Subscriber”, which in tech-land is similarto “Comp Store Sales”) of over ~10%1:

EIGI's Reported ARPS2011 2012 2013 2014

Adjusted revenue 474,115$ 528,119$ 651,945$

Total subscribers 2,845 3,223 3,502 4,087

Reported ARPS $12.84 $12.92 $13.09 $14.48

% change 0.62% 1.32% 10.62%

Revenue in 1,000s of $s, and total subscribers in 1,000s

Page 22 of 61

Not only is EIGI’s reported ARPS growing, Endurance appears to be outperforming its peers2:

Icing on the cake: Directi’s ARPS looks breathtakingly amazing and “accretive” to overall ARPS. Theimplied Directi ARPS is $72 per month or 5x-6x EIGI’s historical ARPS:

We estimate that EIGI’s true ARPS actually declined in 2014 by around ~13%3:

How Endurance’s ‘Subscriber’ is not necessarily a subscriber

Gotham City Research believes that a subscriber is a subscriber. The definition is and should be quitesimple. In fact, Godaddy seems to agree (their definition of a subscriber is simple and clean relative toEIGI’s). Endurance, on the other hand, defines a subscriber as either a customer or a reseller (a resellermay account for 10s if not 100s of customers).

EIGI ARPU & ARPU Growth vs Peers2012 2013 2014

GDDY $7.75 $8.67 $9.50WWWW $13.44 $14.24 $14.62

EIGI $12.92 $13.09 $14.48% change in ARPU

GDDY 11.8% 9.6%WWWW 6.0% 2.7%

EIGI 1.3% 10.6%

DIRECTI ARPS ACCORDING TO EIG2013 2014

Directi revenue n.a. $48,499Directi subscribers n.a. 56

Directi ARPS n.a. $72.17EIGI Reported ARPS $13.09 $14.48$ & subscribers in 1,000s except ARPS

EIGI Actual 2014 ARPS Declined2011 2012 2013 2014

Adjusted revenue 474,115$ 528,119$ 651,945$

total subscribers - reported 2,845 3,223 3,502 4,031

Directi end subscribers 1,000 1,000

total subscribers - actual 4,502 5,031Reported ARPS ###### $12.92 $13.09 $14.48

Actual ARPS 12.84 $12.92 $13.09 $11.40% growth in ARPS 0.01$ 1.3% (12.9%)

All figures except ARPS are in 1,000stotal subscribers subtracts the 56 implied directi resellers.

Page 23 of 61

According to Endurance International Group4:

Total Subscribers = Subscribers (excluding Directi) + Directi’s Resellers

According to Gotham City Research:

Total Subscribers = Subscribers (excluding Directi) + Directi’s Subscribers

When it comes to Endurance’s recent acquisition, Directi, EIGI adds Directi’s resellers as subscribers toEIGI’s total subscriber count, rather than Direct’s end subscribers. We can’t think of any good reasonsfor doing this, given that Endurance includes its end subscribers in its subscriber count.

The customers added as a result of Directi includes a significant number of resellers, whichreduces the total amount of Directi's contribution to total subscribers because we count only theresellers, and not their end customers, as subscribers.

EIGI includes the above clarification, that it counts Directi’s resellers (as customers), and not its endcustomers, only in the 10Q not the 10K.

Additional Ways Endurance’s ARPS is Misrepresented

Endurance obfuscates the definition of a subscriber further than illustrated above:

In Q4 2014 the company changed the definition of a subscriber (which added increasessubscribers), and did not discuss this change on the quarterly call.

EIGI does not count as subscribers those who purchase only domain names as subscribers (butthey count the revenue!).

EIGI does not count subscribers those who access solutions via resellers as subscribers. Thedirecti adjustment we make does not account for domestic resellers that EIGI counts assubscribers.

Investors rely on accurate figures from companies so that they can then make their investmentdecisions accordingly. Clearly CEO Ravichandran and the Company’s misrepresentations regarding ARPSbetray that trust.

Reseller

subscriber subscriber subscriber subscriber subscriber subscriber subscriber subscriber subscriber subscriber

Page 24 of 61

WWWW, EIGI’s most comparable peer (and whose shares have declined -36% over the last 12 months),has recently warned about ARPS declining:5

“ARPU is expected to decline sequentially in the first quarter of 2015, primarily due to the issuesthat impacted our DIY and DIFM businesses in the fourth quarter of 2014. “

Endurance’s ARPS Don’t Add Up – A common symptom in cases where numbers are fabricated

Unsurprisingly, EIGI’s reported ARPS does not add up to the calculated amounts derived from using thefigures they disclose:

Their reported ARPS excluding Directi do not add up either.

Godaddy’s ARPU is Lower than Endurance’s ARPU – Possible Explanations

Even with the correct Directi adjustments, EIGI’s ARPU exceeds Godaddy’s. Possible explanations:

Endurance’s slippery total subscriber definition may account for the entire variation. Forexample, Endurance may count certain domestic resellers as subscribers, rather than countingthe end customers. This may sufficiently lower EIGI’s ARPU.

Endurance may attractive far more suspect accounts, e.g. malware/spam accounts. Theseaccounts are probably very profitable on a per subscriber basis (we explore this further in thefollowing sections).

EIGI’s Organic growth far lower than EIGI Claims

CEO Ravichandran claims that organic growth in 2013 adjusted revenue grew 17%, and 2014’s adjustedrevenue organically grew between 13%-15%6:

“For the GAAP revenue – for the year, GAAP revenue grew to $520.3 million and adjustedrevenue to $528.1 million ahead of our adjusted revenue expectation of $525 million. Apart from2012 acquisitions, adjusted revenue organically grew 17%” – CEO Hari Ravichandran

“I would say that organically, when we think about the business, it’s a somewhere between 13%,14%, 15% organic growth depending on what marketing programs are available each year.” –Hari Ravichandran CEO of EIGI

ARPS Numbers Don't Reconcile2011 2012 2013 2014

Adjusted revenue 474,115$ 528,119$ 651,945$

total subscribers 2,845 3,223 3,502 4,087

Reported ARPS $12.84 $12.92 $13.09 $14.48

Calculated ARPS 13.02$ 13.09$ 14.32$Irregularity 0.10$ (0.00)$ (0.16)$

Page 25 of 61

Gotham City Research believes organic growth is much lower – in the 0%-7% range for 2013, and ~5%for 2014:

2013 Organic growth:

2014 Organic growth

2014’s organic growth seems heavily dependent on domain-related businesses. This is strange, given thecompany tends to downplay the importance of this business.

The presentation accompanying the Q4 2013 earnings call uses the word ‘organic’ quite a bit, but doesnot disclose organic revenue growth.

See the appendix for further details.

EIGI's Revenue Organic Growth2013 2014

EIGI 17.0% 13.0%-15.0%Gotham 5.9% 5.6%

EIGI 2013 Organic Growth Calculation$ in 1,000s 2012 2013

GAAP Revenue $292,156 $520,296Purchase accounting adjustment $64,123 $7,311

Homestead/Homegator/Other $90,150 $245,800Organic Revenue $266,129 $281,807

Organic Growth 5.9%

EIGI 2014 Organic Growth Calculation$ in 1,000s 2013 2014

GAAP revenue $520,296 $629,845

adjusted revenue $528,119 $651,945

Directi ($48,500)

Arvixe, BuyDomains, & Webzai ($14,600)

Other acquisitions ($31,000)

Organic Revenue $557,845Organic Growth 5.6%

Page 26 of 61

Purchase Accounting Adjustments Irregularities

Just as Endurance disclosed 2 irreconcilable DIrecti revenue figures (i.e. the numbers don’t add), thereappears to be a ‘purchase accounting adjustment’ irregularity as well7:

On one hand the S-1 states “Purchase accounting adjustments reduced 2012 revenue by $47.2 million.”

Yet the ARPS derivation shows a $64.12 million adjustment:

It’s theoretically possibly, but highly slippery, that the $17 million variance – between the $47.2 millionand $64.12 million – is a result of a “GAAP” purchase accounting adjustment vs a “Non-GAAP”purchasing accounting adjustment. The problem is if this is the case, the Company did not disclose it.

Page 27 of 61

Suspect Customers: Terrorism & Malware-related

Some companies aim to improve long-term profitability by putting the customer’s needs first. Othercompanies improve short-term profitability by profiting at their customers’ and/or others’ expense.

Blinkx, a click fraud/malware concern whose shares have declined over -80% since Ben Edelmanexposed their nefarious practices, is an example of the latter case. Blink engaged in suspect activities,and the company eventually reaped what it sowed. Gotham City Research believes that EnduranceInternational Group resembles Blink, and EIGI’s stock will share a similar fate. We specifically believethat Endurance has been boosting profitability by turning a blind eye to the suspect but profitablebusiness of providing Internet hosting to harmful activities such as malware/spam and terrorism.

Endurance aggressively attracts customers, spending $23 on sales & marketing for every $100 it earns inrevenue. That’s twice as much as Godaddy spends1:

Yet Endurance, at minimum lacks the infrastructure necessary to minimize suspect customers. It spendsonly $3 on its tech infrastructure for every $100 it earns in revenue, less 1/5th Godaddy spending:

EIGI SALES & MARKETING SPENDING 2x GDDY2012 2013 2014

GDDY 14.3% 12.9% 11.9%EIGI 28.4% 22.6% 23.3%EIGI vs GDDY 1.99x 1.76x 1.96x

EIGI INFRASTRUCTURE SPENDING 1/6th GDDY2012 2013 2014

GDDY 19.3% 18.4% 18.3%EIGI 4.7% 4.5% 3.1%EIGI vs GDDY 0.25x 0.24x 0.17x

Page 28 of 61

The following further support our belief that (I) Endurance generates revenue from harmful activities (oris willfully ignorant of the fact that their aggressive sales and marketing approach leads to “ends justifythe means” results) and (II) revenues-derived from these activities mask a high churn business:

Terrorist related

Endurance International Group was recently hacked for hosting terrorist website. The list of hacked Endurance companies include: BlueHost, FastDomain, Hostgator,

HostMonster and JustHost. Endurance was exposed by the Boston Globe for hosting Taliban-related website several years

ago. A senior executive at Endurance (still with the company) claimed its ‘terms of service’explicitly prohibits terrorist-related activities.

The ‘Terms of service’ for BlueHost, FastDomain, Hostgator, HostMonster and JustHost do notexplicitly forbid terrorism related activities. It seems Endurance only paid lip service back in2008.

Endurance transacted with several "Specially Designated Nationals" ("SDNs”) for years, eventhough SDNs’ assets are blocked & U.S. persons are generally prohibited from dealing with them.

Endurance hosts a group designated by the UAE as a terrorist group. Recall that Endurance ownsa few UAE subsidiaries.

Malware/Spam related

Endurance has a far higher concentration of black-listed domains versus Godaddy, at 41% v. %11. Endurance’s domains are consistently in the top 5-10 of Top 100 Registrars with Blacklisted

Domains. EIGI owns many registrars with 80% or higher spam vs ham registrations.

Other

Endurance is a reseller of Tucows a.k.a. OPENSRS Tucows prefers to simply pass on the information about illegal websites to its resellers without

requiring them to take any action. Tucows is the largest registrar that fails to suspend rogue Internet pharmacy domain names,

which contrasts with GoDaddy and eNom who taken decisive action to prevent criminal activityon their registration platforms.

Endurance is a Reseller of Tucows, Designated as “Notorious” by the US Government

Page 29 of 61

Endurance International Group Hacked ~1 Month Ago for Hosting Terrorist Websites

A hacking group that had hacked websites and social media accounts affiliated with the ISIS group,recently hacked some of Endurance group’s “crown jewels” (i.e., largest acquisitions), include BlueHost,FastDomain, Hostgator, HostMonster and JustHost for hosting terrorist websites2:

Page 30 of 61

The hacker group warned Endurance International Group to stop hosting terrorist websites or next timetheir DNS settings will be changed. Attracting terrorists as customers and underinvesting in coreinfrastructure seems like a perfect recipe for disaster.

islam-army.com is one specific terrorist website that Endurance Hosts/Hosted3

The twitter account of Bluehost was also hacked for hosting terrorists4:

Page 31 of 61

Endurance Does Not Deny Hosting Terrorist Websites

Endurance did not deny hosting terrorist websites. The company did not apologize, nor did it

speak out against terrorism nor take any responsibility for its role in hosting terrorist websites.

We also were unable to find any official press releases from the endurance, hostgator, or

bluehost websites (in fact, http://www.hostgator.com/press has not been updated since 2011).

However, Endurance did respond to media5:

Last night, Bluehost’s Twitter account was compromised for a short period of time. Bluehost was

able to regain control of their Twitter account within a couple hours. We are continuing to

investigate this matter, but are viewing this as an unfortunate case of cybervandalismto to one of

our partners. HostGator.com was not affected by this issue.

HostGator:

We have taken all appropriate security measures to ensure that our platform is secure. Per our

security protocol, we will continue to conduct a thorough review of this incident.

Hostmonster:

We have regained control late last night and are investigating this matter extensively.

Endurance’s History with Terrorists and “Specially Designated Nationals”

An SDR is a designation the US Government makes to individuals Americans are (generally) prohibitedfrom dealing with (very special “bad guys”, according to the US Government):6

As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned orcontrolled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups,and entities, such as terrorists and narcotics traffickers designated under programs that are notcountry-specific. Collectively, such individuals and companies are called "Specially DesignatedNationals" or "SDNs." Their assets are blocked and U.S. persons are generally prohibited fromdealing with them

Page 32 of 61

An Endurance subsidiary was doing business with an SDR named Kahane Chai for many years after Chaiwas designated an SDN (in 2001)7:

It seems Endurance’s subsidiary did business with Kahane Chai for at least 6 years8:

Endurance detected a few additional SDRs as well (these are just the publicly disclosed ones):9

Page 33 of 61

Endurance and the Taliban – Nearly All Endurance Companies Don’t Expressly Prohibit Terrorism

Endurance has had terrorism-related problem going back to 2008. It hosted a website that taught itsmembers how to outfit a suicide bomber, included al-Qaeda propaganda videos, and offered a Talibanvideo showing the beheadings of three spies:10

Endurance International previously hosted another website that supported holy war in Iraq.11

Most Endurance Company Terms of Service Does Not Expressly Prohibit Terrorism

Jean McCarthy, marketing director for Endurance International, told the Boston Globe:

"Our terms of service expressly prohibit the use of our services for terrorist or unlawfulpurposes,"

We checked several of Endurance companies’ terms of service, and we found the above claim issubstantially false12:

Bluehost’s terms of service does not expressly prohibit the use of its services for terroristpurposes

Hostgator’s terms of service does not expressly prohibit the use of its services for terroristpurposes

Hostmonster’s terms of service does not expressly prohibit the use of its services for terroristpurposes

Bluehost’s terms of service does not expressly prohibit the use of its services for terroristpurposes

Bizland’s expressly prohibits the use of its services for terrorist purposes.

Page 34 of 61

Endurance and Its High Concentration of Black-listed websites

Endurance International Group seems to host a disproportionately high percentage of malware/spam13:

Uribl gathered the Top 100 Registrars with Blacklisted Domains, and Endurance is consistently one ofthe top 4 (if you add all its subsidiary domains). The list is updated on a rolling 5 day period, but we’vefound that Endurance has consistently ranked highly in total number, as well as yielding a high % ofspam sites versus non spam sites.

Note that one of the largest contributors to the Endurance related black-listed websites are from Directirelated companies. publicdomainregistry.com, the undisclosed subsidiary, is one of the largest black-listed website registrars:

Specific example of the kinds of malware the above monitors14:

Endurance High % of Black-listed websitesGodaddy Endurance

Black-listed websites 1,052 969Active websites 9,473 2,374

Black-listed as % of Active 11.1% 40.8%

Page 35 of 61

Bizland (a.k.a. Endurance) history of malicious activities

66.96.147.66 (Endurance/Bizland IP address) has been listed on Cyberwarzone because it has a historyof malicious activities. The IP has been reported on various domains which keep track of malicious IP’s.15

Reasons why 66.96.147.66 is listed on Cyberwarzone:

History of being on a blacklist History of being used in an aggressive marketing campaign History of malicious traffic or use Triggered as a spam-bot or aggressive crawler We were lazy and we did not see that it is a false-positive

Over 1,000+ domains on Bizland have been Malware-related

Over 1,000 Endurance-related domains have been flagged with the following warning16:

All domains/IPs listed on this website should be treated with extreme caution. Some of themwill automatically infect your computer.

Bulk Injection Hack infects ~20,000 Endurance-related Websites

Endurance’s websites, in yet another example of how they seem more vulnerable than websites hostedelsewhere, accounted for 57% of compromised websites17:

“During the first week of September 2010, the number of affected websites ranged from 22,000to about 39,000 depending on the day. According to the data collected by Websense, BlueHostwas the most affected hosting company and accounted for 38% of compromised websites. Itwas followed by DreamHost with 28%. BizLand and Go Daddy acquired the third and fourthspot with 19% and 12% respectively.”

Page 36 of 61

Endurance is a Reseller of Tucows, Designated as “Notorious” by the US

Endurance is a reseller of Tucows according to one of Endurance VP’s comments18:

Mitch Haber, VP of Product Management at The Endurance International Group, an OpenSRSreseller, offered his congratulations. “OpenSRS is a true partner. Their platform is solid and theirsupport team is among the best in the industry. They have played a key role in our success andwe look forward to working with them toward the next 10 million domains under management.”

The US trade office designated Tucows in its annual “notorious markets” list as an example of concernabout some registrars not taking action to block or suspend sites selling illegal goods.19

And it’s not just the US government, The Japanese government requested suspension of a companyselling illegal unapproved drugs, yet the company continued operating under a Tucows domainillegally.20

Page 37 of 61

Underinvestment leads to Service Outages and High Churn

Endurance makes the following claims about its business1:

CEO Hari Ravichandran says2:

“Our most powerful channel is customer advocacy and word of mouth. About 45% of newsubscribers added to the Endurance platform find us through word of mouth, which does notoffers any marketing dollars. We accomplish this by focusing on delivering a superior solution,fueled by our cloud enablement platform, and great customer service.”

Gotham City Research has found that customers disagree with the above representations. In fact, webelieve Endurance International’s business is actually characterized by the following qualities:

Low quality products & services, exacerbated by underinvesting in its business. Low quality customer & technical support. High churn business, and attempts to conceal its true churn by re-defining churn. High customer cannibalization. Endurance’s acquired companies deteriorate, post-acquisition.

Page 38 of 61

Our opinions are supported by the following findings:

Very low R&D spending – underinvests in its core infrastructure (e.g. servers) Service outages, frequent service disruptions Poor customer reviews – with specific and detailed grievances. EIGI twists the definition of churn/retention to the point that the disclosures resemble lies. An industry expert explicitly states EIGI’s churn/retention definition/framework “is not the

industry common practice, while using industry terminology. Their businesses suffers from thesame issues other ‘hosters’ suffer.”3

Documented examples of cannibalism

Endurance Underinvests in Infrastructure so It Can Squeeze Out as Much as Possible from Customers

In the prior section, we indicated how Endurance’s suspect practices have attracted terrorist-related andspam/malware-related subscribers. We find that EIGI’s practices not only contribute to harming thegeneral public, it also profits at its customers’ expense.

Endurance spends 60-80% less per customer on infrastructure, than Godaddy does4:

Endurance’s R&D spending per revenue dollar is even low compared to the much larger Salsesforce.com,which is seen as a sales heavy organization in the tech world.5

We use the words R&D and infrastructure synonymously, as both Godaddy and Endurance havecomparable definitions. Here is EIGI’s R&D definition i.e. ‘Engineering and Development Costs’:

Engineering and development costs incurred in the development and maintenance of theCompany’s technology infrastructure.

Our engineering and development activity is focused on enhancing our systems, developing andexpanding product and service offerings, and integrating technology capabilities from ouracquisitions.

R&D Spending per Subscriber Comparison2012 2013 2014

Godaddy $17.14 $17.95 $20.02EIGI $4.28 $6.63 $3.89

variance (75.0%) (63.1%) (80.6%)

Page 39 of 61

Godaddy’s stock-based compensation to R&D employees exceeds EIGI’s by 10x:

EIGI

Godaddy

Some might assume that EIGI’s R&D efficiency is greater than Godaddy’s. However, that fails to explain aclear pattern of service disruptions and consistent post-acquisition customer complaints

How valuable is a web hosting company with frequent (and worsening) service outages?

Endurance companies experienced at least 4 large-scale service outages last year, and they seem to beworsening with timing6:

EIGI seems to have trouble monitoring outages (it seems the company is not even aware until customerscomplain)7:

The official Twitter accounts for BlueHost and HostGator at first sent out messages suggestingthat the hosts were not aware of any outages, but shortly before 3 p.m. Tuesday, BlueHost'sofficial Twitter account tweeted the following announcement: "FYI we're experiencing a

Service Outages are Worsening

Date DurationAug-13 24 hours of downtimeDec-13 3 days of downtimeApr-14 24 hours of downtime

May-14 9 hours of downtimeOct-14 5 days of downtime

Page 40 of 61

temporary network issue with our data center that's affecting some customers. If that's you staytuned for updates!" HostGator's official Twitter account tweeted a similar message out aroundthe same time, alerting users to the fact that the site was aware of the service outage and wasworking to address it.

The outage led a number of BlueHost and HostGator customers to send tweets of frustration tothe accounts for the hosting services.

"Really @bluehostsupport @bluehost? You have my website down (& phone support broken) onthe BIGGEST fundraing day of the year? Unacceptable," @tweeted @AimeeCustis.

"been an hour+ and we're still down. you gonna explain yourselves, gator?? we want 2014 forFREE.@HGSupport @hostgator #hategator," tweeted @Lazytravelers.

Some Twitter users even threatened to cancel their accounts, including @JohnTVokc: "New YearsResolution for 2014 - Find a much more reliable host for my dedicated server account.@hostgatorcontinues to disappoint."

The tagline on EIG's Google search listing states that "Endurance International empowers thespirit of the entrepreneur with better web solutions for better success," but Tuesday's was atleast the second major outage its customers endured in 2013, as thewhir.com reports thatHostGator, BlueHost and other EIG services went down for an extended period of time in August.

The following twitter exchange (on the next page) reveals a few qualities we believe are company-wide8

Service outages and product quality have worsened with time. Endurance International has destroyed formerly average and quality hosting companies. Once

acquired, a formerly good company becomes a bad company, and an average one becomes aterrible one.

Endurance engages in deceptive (and at times) false advertising.

Page 41 of 61

Page 42 of 61

Deceptive Marketing and False Advertising

The above exchange reveals what appears to be false advertising on the part of a small orange:

Customer Reviews are Poor

Customer reviews are so poor, detailed, and descriptive, we’ve decided to summarize the maingrievances, highlight a few complaints, and leave the rest for later. We’ve tended to find complaintseven when we were not looking for them. A recent former Hostgator customer assessment summarizessome of the common complaints (wrote the following in January 2015):9

I thought I'd share my recent experience after moving from Hostgator to Stablehost two weeksago. I own a (locally) popular Wordpress blog and faced some serious issues with the Hostgatorbaby croc package, which was my host of choice for the past two years.

These included, but were not limited to:

Security issues - most notably a rogue Hostgator user on my server using mod_userdir toinstall a phishing script on mydomain.com/~hackername. Hostgator later apologizedand blocked mod_userdir after I had to specifically request it (I was amazed that theydon't do it by default!?)

Performance issues - as my traffic grew, I began receiving constant CPU resource emailnagging, resulting in frequent temporary account restrictions.

Generally unprofessional and SLOW support

Page 43 of 61

Statistically significant sample of Complaints

We encourage you to evaluate these and other customer reviews:

49 comments, nearly all complaining about outage More Downtime for HostGator and BlueHostCustomers as Router Issues Plague Utah Data Center http://www.thewhir.com/web-hosting-news/downtime-hostgator-bluehost-customers-router-issues-plague-utah-data-center

23 very negative reviews about Homestead (Google ‘homestead hosting’ and you get tohttp://www.cnet.com/products/homestead-web-host/user-reviews/

Bluehost – 6 pages of reviews. Reviews since 2014 are terrible, reviews in 2013 were mixed,and reviews up to 2012 were excellent.https://www.webhostinghero.com/reviews/bluehost/2/#listing

Hostmonster 62 reviews most are terrible – http://www.whoishostingthis.com/hosting-reviews/hostmonster/ -

Dotser all 19 reviews are poor http://www.whoishostingthis.com/hosting-reviews/dotster/ Bluehost user ratings far worse than the ‘experts’ rating –

http://www.whoishostingthis.com/hosting-reviews/bluehost/ Hostgator – On yelp 1.5 stars out of 5 – 25 reviews: http://yelp.com/biz/hostgator-houston-3 15 negative comments about Hostgator and other Endurance companies

http://www.linux-depot.com/non-endurance-international-group-eig-hosting/ “hostgator sucks…any alternative” – one of many similar threads

http://www.webhostingtalk.com/showthread.php?page=2&t=1326038#postcount9389876&utm_source=twitterfeed&utm_medium=twitter

The “before and after” Endurance acquires summary10:

And both Bluehost and Hostgator are owned by Endurance International Group. Both hosts usedto have a reputation of being excellent before EIG bought them out. Both hosts are now thesubject of regular complaints (mainly overcrowded and slow servers, and unresponsive supportthat doesn't support) on a number of forums specialising in web hosting and web mastering.

Customer Confusion and Customer Cannibalism

EIGI’s seemingly deliberate strategy of not building a brand leads to both intended and unintendedconsequences. One of the intended consequences is best described as follows11:

The separate branding on the part of Endurance means that customers aren’t aware that manyof these properties operate on the same platform. The outage resulted in several major brandsand several million websites knocked out, many of whom probably didn’t realize that they wereEndurance customers.

Page 44 of 61

Endurance probably hopes that customer confusion leads customers to simply leave one Endurancecompany for another one. The problem with this strategy, and the unintended consequences:

Long-term brand erosion, leading to higher churn (or worst case, discontinuing a brand). Dilutive cannibalism – the example in the next page shows how an affiliate marketer of A Small

Orange (“ASO” an EIGI company), bad-mouths Hostgator (an EIGI company). Hostgator is amuch bigger company versus ASO, so cannibalism seems counterproductive:

The above Tweet concurrently badmouths Hostgator whilst complimenting ASO. IT was RT-ed 20x

EIGI’s True Churn is Very High – Revenue not as stable as Portrayed

EIGI discloses a “Monthly Recurring Revenue Retention Rate” of 99%.12

Page 45 of 61

The implied churn rate of 1% (since EIGI does not disclose churn), implies the company has industry leading churn:

What is Endurance’s secret sauce? An industry veteran does not understand how Endurance reports such low churn,given that some of its more high profile subsidiaries suffered from higher churn, EIGI acquired them13:

I closely watched Endurance presentations, and their claim of “1% Churn” got my attention. Theyhave repeated that claim on their Q4-2013 earnings call while defining the MRR retention at 99%.They have kept that statement in their Q1-2014 results.

Out of the over 50+ companies that were bought over the past years, there are a few which wereplayers in the Hosting market for many years and were struggling with churn throughout thoseyears. Included among them are: HostCentric, Hostmonster, Bizland, homestead, domain.com,Ehost, ApolloHosting [these are all Endurance subsidiaries].

I wondered what the Endurance team did in order to reduce the industry-inherited churn in thesecompanies.

After analyzing EIGI’s numbers more carefully, he concluded that EIGI’s figures are not consistent with industrynorms:

The Endurance guys used in their analysis a model which is not the industry common practice,while using industry terminology.

Their businesses suffers from the same issues other ‘hosters’ suffer, and most probably at thesame level.

In summary, Churn has always been a key performance indicator of a Hosting company. Nohosting company can avoid it, and they all continue to struggle to minimize it.

CEO Ravichandran’s explanation of churn does not make sense

EIGI’s CEO has claimed that:14

“85% to sometimes it's higher than 90% of the subscriber churn that happens is businesses justgoing out of business. So this is off the churn number, 85% to 90% would be people going outof business.”

So if we are to trust Ravichandran and EIGI, churn is %1 per month, and 85%-90% of that is from “peoplegoing out of business.” Yet US statistics regarding business survival consistently shows that businesses

Monthly ChurnGDDY 1.3%

WWWW 1.0%WIX 2.0%EIGI Undisclosed

Page 46 of 61

closure (due to failure or voluntary closure) within the first year has been a remarkably steady 20-25%the 1994-2010 period15:

Ravichandran’s explanation would imply that new customers hosting on EIGI brands only close shop at a rate of10%-11%, significantly less than the 20-26% historical rate. We don’t think that’s the case, especially coupled withthe significant service outages, customer complaints, integration issues, and other problems we’ve discussed in priorsections.

EIGI’s Distorted ARPS Figures Contributes to a Distorted Churn

Recall how Endurance was magically able to transform a -13% decline in ARPU to a +11% improvement in 2014.Since churn requires accurate, relevant, and consistent disclosures of customer counts, a distorted ARPU implies adistorted churn.

Page 47 of 61

40%-100%+ of Profits are Suspect: Putting it all Together

Web hosting is a Competitive Business

Web hosting is a commoditized industry with low barriers to entry, low ARPU, high customer churn, andformidable competition. Additionally, Endurance’s core markets are saturated, as the 4 largest playersaccount for over 85% of the core markets1:

On a reported Adjusted EBITDA basis (which we believe is really ‘EBITDA before costs’) EIGI looksprofitable & far more profitable than its peers:

Blink had “Industry-leading” profitability as well (driven by suspect business practices):

Recent Subscriber #sGDDY 12.7

EIGI 4.1WWWW 3.3

WIX 1.2TOTAL 21.3

Core Markets 25.0as % of Core 85%

ADJUSTED EBITDA MARGIN - EIGI vs PEERS2012 2013 2014

GDDY 19.1% 17.4% 19.6%WWWW 35.5% 31.1% 29.8%

EIGI 45.8% 40.0% 37.4%

Blinkx's Revenue per Employee Surpassed Peers

Employees Revenuerevenue per

employeeRocketFuel 552 $240 $434,783

YuMe 357 $157 $439,776Tremor 287 $148 $515,679

Criteo 452 $240 $530,973Blinkx 265 $247 $932,830

Page 48 of 61

Competition and commoditization leads some companies to innovate – and others to cut corners.Gotham City Research believes Endurance’s behaviors are more consistent with the latter (following inthe footsteps of Blinkx). The below-mentioned explains some of EIGI’s higher Adj. EBITDA vs peers:

Boost revenue by either willfully ignoring or outright attracting suspect (but highly profitable)accounts, e.g. malware/spam-related. Hosting terrorist-websites and other black-listed sites aresymptomatic of aggressive “profits at any cost” practices.

Cut costs by squeezing as much out of customers as possible – Slash infrastructure spending andcustomer support-related spending, leading to service outages, slow speeds, and poor customerservice.

Yet EIGI looks far worse than its peers on a cash flow, gross margin, and revenue per employee bases:

The following qualities would explain the above:

Endurance’s ARPU is declining and organic growth is low/mid single-digits. Churn is very high, and the company tinkers with its subscriber definition to mask this. Directi/international revenue are suspect. The company is desperate for any top-line growth. Sales and marketing spend per revenue is relatively high, to compensate for high churn. The company acquires competitors aggressively, slash and burn, and report suspect profits In

order to mask the variance between cash flow and Adjusted EBITDA.

Something else must contribute to the wide variance between EIGI’s Adjusted EBITDA & FCF

EIGI Free Cash Flow vs Peers$ in 000s 2012 2013 2014

GDDY $46,745 ($55,153) $73,249

WWWW $62,788 $88,082 $82,794

EIGI ($306,652) ($94,294) ($226,156)

2014 REVENUE PER EMPLOYEERevenue Employees Revenue per employee

GDDY $1,387,262 4,908 $282,653WWWW $543,937 2,100 $259,018

EIG $629,845 2,503 $251,636

GROSS MARGIN - EIGI vs PEERS2012 2013 2014

GDDY 52.8% 58.1% 62.6%WWWW 60.7% 65.1% 64.7%

WIX 78.9% 81.0% 81.6%EIGI - reported 18.8% 32.7% 39.4%

EIGI - comparable 49.0% 53.1% 55.7%

Page 49 of 61

Cash collected & cash spent provides insight to an investor to gauge the overall health of EIGI

EIGI includes the following definition/description of Adjusted EBITDA, and states the importance ofemphasizing cash-in and cash-out to properly gauge its health2:

Endurance’s rhetoric seems sound – except EIGI’s calculation of Adjusted EBITDA adds back highlyrelevant ‘cash spent’, pretending as if ‘cash spent’ does not matter (EIGI’s words & actions contradict):

EIGI Adjusted EBITDA Overstated 40%-100%+ Once Adjusted EBITDA is Standardized

We believe EIGI’s Adjusted EBITDA does not help investors gauge the health of its business. We alsobelieve EIGI’s true adjusted EBITDA looks more like the following, after one actually factors in both cashcollected and cash spent, not just cash collected:

Adjusted EBITDA - EIGI's Perspective vs Standardized$ in 1,000s 2012 2013 2014

Adjusted EBITDA - EIGI Perspective 133,664$ 207,931$ 235,618$Transaction expenses and charges (32,767) (45,036) (4,787)

Integration and restructuring expenses (294) (45,594) (19,927)Changes in ST + LT Deferred Revenue (124,257) (62,125) (75,923)

Adjusted EBITDA - Standardized (23,654)$ 55,176$ 134,981$Overstatement (117.7%) (73.5%) (42.7%)

Page 50 of 61

‘Transaction expenses and charges’ and ‘Integration and restructuring expenses’ are cash costs

Endurance is a roll-up, and has a long and consistent history of M&A since 2002 (13 years ago) as thearticle titled “Bizland [Endurance’s former name] Growing Through Acquisitions” clearly demonstrates3.Because on-going acquisitions has been core to Endurance’s DNA, these cash expenses have beennormal and recurring, and should be added back.

Endurance’s peer companies – WWWW and GDDY – are far more conservative in adding back theseother adjustments to Adj. EBITDA (in fact, Godaddy’s ‘other adjustments’ actually reduces Adj. EBITDA)4:

Deferred revenue adjustments incorrect given accounting irregularities, no refund reserve disclosures

Although adding back deferred revenue to Adjusted EBITDA is standard for publicly-traded web hostingcompanies, we believe the deferred revenue add-backs are improper for Endurance specifically because:

EIGI’s ‘Total customer’, ‘ARPU’, and ‘Churn’ definitions are not consistent with peers (asdiscussed).

True churn is higher than EIGI reports. Higher churn leads to higher refunds which reducesdeferred revenue (and therefore, future revenues).

EIGI does not disclose its refund reserves, despite discussing its importance. The concern is thatdeferred revenue balances are inaccurate.

We’ve identified accounting irregularities in EIGI’s deferred revenue balances.

Refunds are Important yet EIGI Does not disclose refunds

Refunds are clearly important to EIGI5:

“We may not have adequate reserves in the event that our historical levels of refunds increase,which could adversely affect our liquidity and profitability.”

Yet the company does not disclose refunds, or refund reserves. Given the service outages experiencedby Endurance’s customers in 2013, 2014, 2015, this seems highly suspect.

Adjusted EBITDA Adjustments vs Peers$ in mms 2012 2013 2014GDDY ($28.7) $0.4 ($16.5)WWWW $3.5 $1.7 $2.7EIGI $12.4 $90.6 $24.7

Service Outages are Worsening

Date DurationAug-13 24 hours of downtimeDec-13 3 days of downtimeApr-14 24 hours of downtime

May-14 9 hours of downtimeOct-14 5 days of downtime

Page 51 of 61

Deferred Revenue Irregularities

Like many other Endurance-related figures, there are accounting irregularities in deferred revenue:

Correspondence with the SEC: Feeling the Pressure

The Securities and Exchange and Commission recently questioned EIGI’s pro forma Free Cash Flow andUnlevered Free Cash disclosures. Rather than defending its practices (though it does offer a tokenrebuttal), the Company folded6:

“The Company will remove FCF and UFCF from its future reports on Forms 10-Q and 10-K filedwith the Commission.”

The Company no longer discloses those pro forma figures in its 10K. However, it continued disclosingthem in its earnings releases.

Unexplained Deferred Revenue Irregularities$ in 1,000s 2012 2013 2014

Changes in ST deferred revenue $102,121 $43,118 $65,371Changes in LT deferred revenue $22,136 $19,007 $10,552

Changes in deferred revenue - Calculated $124,257 $62,125 $75,923Changes in deferred revenue - reported $104,069 $51,047 $67,654

Unexplained difference $20,188 $11,078 $8,269

Page 52 of 61

Valuation: Interest Expense Exceeds Normalized Adj. EBITDA

Normalized EBITDA – Unable to cover Interest Expense, Shares Approach $0.00 per share

Endurance has relied on related parties (which are substantially itself) and under-invested in its coreinfrastructure for years. EIGI’s acquisition spree and accounting shenanigans have concealed customerchurn and inflated revenue and ARPU growth. If Endurance’s R&D spending were to simply converge toGodaddy’s level of R&D (as a percentage of revenue), in order to play “catch-up” and remove the effectsof, the Company will have trouble servicing its debt1:

We believe the company will be forced to either:

Play “catch-up” on infrastructure spend (to reduce further service outages) Pay the price of high churn, suffering significant declines in organic revenue.

In either scenario, the Company’s ability to service debt is a near-term risk factor. As a result, we believethe shares will approach $0.00 per share.

Absent Debt, the Shares See 80+% Downside

If we were to assume Endurance had zero debt on its balance sheet, EIGI stock faces 80%+ downside:

EIGI’s ARPU is declining – Declining ARPU tends to mean ‘game over’ for a company’s stock. SeeBlackberry as an example.

EIGI trades at higher multiples compared against the true industry leader, GDDY WWWW seems like the most appropriate comparable company:

WWWW trades at ~10x adj EBITDA, and 10x Free cash flow – WWWW’s adj EBITDA andfree cash flow figures are cleaner than EIGI’s (WWWW also actually generates FCF).

EIGI’s suspect accounting and business practices resemble WWWW. We think EIGI’spractices are worse, as detailed in this report.

EIGI is worth $2.98 per share, once it trades in-line with WWWW, at 10x Adj. EBITDA

Normalized EBITDA - Unable to Cover Interest Expense$ in 1,000s 2012 2013 2014

Adjusted EBITDA - Standardized ($23,654) $55,176 $134,981Normalized Infrastructure spend ($42,455) ($72,468) ($95,972)Normalized Adjusted EBITDA $18,801 $127,644 $39,009

Interest Expense ($126,165) ($98,449) ($57,414)

EIGI's Value per Share CalculationEBITDA Multiple 10.0x

Normalized Adjusted EBITDA $39,009Fully Diluted Shares 131,000

Equity value per share $2.98Market value per share $21.94

Upside/(Downside) (86.4%)

Page 53 of 61

The Ravichandran Ties that Blind

Dr. V. Ravichandran

CEO of Diya Systems Majority owner of Tregaron FATHER of EIGI CEO

Indira Ravichandran

Wife of Dr. V. Ravichandran Majority owner of Tregaron Mother of EIGI CEO

Tregaron India Holdings

Tregaron india holdings address https://www.google.com/maps/@38.301045,-85.57095,3a,75y,167.7h,90t/data=!3m4!1e1!3m2!1sBaUQuRSCN8NWike2AO7q0g!2e0

Glowtouch is Tregaronhttps://app.sos.ky.gov/ftshow/(S(ymujrwwoiood4clctf4qez4h))/default.aspx?path=ftsearch&id=0715135&ct=06&cs=99999

Page 54 of 61

VIDYA RAVICHANDRAN – sister of EIGI CEO4011 WHITEBLOSSOM ESTATES COURTLOUISVILLE, KY 40241

Tregaron India Holdings and Glowtouch share a common address

GlowTouch TechnologiesThe Summit II4360 Brownsboro Rd.Suite 200Louisville, KY 40207

Same address (same suite) as glowtech http://www.manta.com/c/mb5826b/tregaron-india-holdings-llc

http://www.glowtouch.com/contact/ Glowtouch is diya http://company.monsterindia.com/diyasmin/ Glowtouch and and eig both invested in by a tregaron capital

http://www.tregaroncapital.com/recent_news.htm

Diya Systemso Seems to use EIGI services, per https://who.is/whois/diya.neto Diya Systems is a fully owned subsidiary of GlowTouch Technologies

http://www.diya.net/aboutus/companies Same phone number as glowtech contact The Summit II

Employee reviews are terrible:

http://www.glassdoor.com/Reviews/Diya-Systems-Reviews-E641824.htm

Page 55 of 61

Source: http://www.consumercomplaints.in/complaints/glowtouch-technologies-pvt-ltd-c50718.html

Another employee, Shruthi Shetty uses Endurance/Glowtouch interchangeably:

http://people.bayt.com/shruthi-shetty-14189325/

Page 56 of 61

Directi Revenue Does Not Reconcile

We gathered all Indian filings for all the Directi and related entities, and attempted to reconcile EIGI’sdisclosed revenue with the sum of all the Indian entities. They did not reconcile as already discussed.

Notes:

We used 2013 and 2014 year figures Because EIGI’s reported Directi revenue do not reconcile, we used both numbers as part of the

‘low’ and ‘high’ analysis

Directi Revenue ReconcilationLow High

directi internet solutions pvt ltd 1,039,666,986 277,126,173

directi web services pvt ltd 91,272,462 50,774,780

directi services pvt ltd 757,256 1,726,063

Directi Web Technology Pvt Ltd 0 411,314,905

PDR DOMAINS SOLUTIONS PVT LTD 484,358 502,555

Big Rock Solutions 16,263,120 2,621,188

TOTAL REVENUE ( in INR) 1,148,444,182 744,065,664

USD INR exchange rate 0.017 0.0162in USD $19,523,551 $12,053,864

ADJUSTED REVENUE $48,500,000 $48,500,000ADJUSTED REVENUE $31,300,000 $29,000,000

Page 57 of 61

Organic Growth Calculations

2013 Organic Growth

Notes:

We add back the ‘purchase accounting adjustment’ to GAAP revenue We exclude the Homestead/Homegator/Other revenue (combination of disclosed and

estimated values) from EIGI’s GAAP revenue

2014 Organic growth

We use 2014 adjusted Directi revenue as provided by the 10K 2014 Other acquisitions – includes the following (adjusted for date of acquisition completion):

Radix estimate of $28.4 million (the average gLTD brings in 28.4 million per launch,Radix launched three gLTDs in June 2014).

Buydomains owns 950,000 domain names. Domain name resellers typically sell 2% ofinventory per year. We assume an avg selling price of $1,200-$1,500 per domain.

Arvix disclosed revenue for 2013 = $ 12 million, we conservatively assume revenuesgrew to $14 million in 2014.

Webzai , we estimate $4.75 million in revenue

EIGI 2013 Organic Growth Calculation$ in 1,000s 2012 2013

GAAP Revenue $292,156 $520,296Purchase accounting adjustment $64,123 $7,311

Homestead/Homegator/Other $90,150 $245,800Organic Revenue $266,129 $281,807

Organic Growth 5.9%

EIGI 2014 Organic Growth Calculation$ in 1,000s 2013 2014

GAAP revenue $520,296 $629,845

adjusted revenue $528,119 $651,945

Directi ($48,500)

Arvixe, BuyDomains, & Webzai ($14,600)

Other acquisitions ($31,000)

Organic Revenue $557,845Organic Growth 5.6%

Page 58 of 61

End Notes

Introduction

1. GDDY, WWWW, and EIGI SEC filings2. GCR Investigation

EIGI Uses Related Parties (Itself?) to Inflate Earnings

1. GDDY, WWWW, and EIGI SEC filings2. EIGI Investor Presentation3. EIGI proxy filings, 10Ks, and IPO filings4. EIGI IPO filing exhibit

http://www.sec.gov/Archives/edgar/data/1237746/000119312513361255/d555515dex1020.htm

5. Sam Antar, Former CFO of Crazy Eddie’s6. Glowtouch Revenue information: http://www.inc.com/profile/glowtouch-technologies7. Glowtouch website8. http://www.hostgator.in/contact9. Diya website10. http://who.is/domain-history/glowtouch.com

https://who.is/whois/diya.net11. http://www.linkedin.com/in/ahujavivek12. EIGI quarterly releases, and sell side estimates13. EIGI filings14. GDDY, WWWW, and EIGI SEC filings15. GCR due diligence

30%-67% of Directi’s Revenues are Suspect

1. EIGI Investor presentation2. EIGI 10K 20143. EIGI Q4 2014 earnings call4. GDDY IPO filing5. EIGI proxy filings6. EIGI 10K 2014

Page 59 of 61

7. directi internet solutions pvt ltd, directi web services pvt ltd, directi services pvt ltd, Directi WebTechnology Pvt Ltd, PDR DOMAINS SOLUTIONS PVT LTD, Big Rock Solutions Indian filings withthe Ministry of Corporate of Affairs

8. directi.com , ‘recent media coverage’

EIGI’s undisclosed U.A.E. subsidiary and its false credentials

1. EIGI 10K 20142. https://gacweb.icann.org/download/attachments/27131927/RadixReg-US-

31.pdf?version=1&modificationDate=1353452704000&api=v2http://www.politico.com/news/stories/1112/84149.html

3. http://www.hfza.ae/en-us/directory.aspx4. http://www.thedomains.com/2012/09/27/lawyers-attack-directi-radix-new-gtld-applications-

they-should-be-disqualified/5. http://english.alarabiya.net/en/News/middle-east/2014/11/15/UAE-formally-blacklists-82-

groups-as-terrorist-.html6. http://who.is/whois/https://www.muslimamericansociety.org

Average Revenue per Subscriber is down -13%, Not Up +11%

1. EIGI 10Ks2. EIGI, GDDY, WWWW SEC filings3. Directi customer count Source:

http://www.lifesize.com/~/media/Documents/Case%20Studies/Companies%20A%20Through%20L/Directi%20Case%20Study%20EN.ashxEIGI 10Ks

4. EIGI 10Ks, 10`Qs, and earnings releases.5. WWWW 10K 20146. EIGI earnings calls7. EIGI IPO filings

Suspect Customers: Terrorism & Malware-related

1. GDDY and EIGI SEC filings2. Syrian Electronic Army website

https://twitter.com/Official_SEA16/status/582381417323048960https://twitter.com/Official_SEA16/with_replieshttp://www.zone-h.org/mirror/id/23960546?zh=1

3. https://who.is/whois/https://islam-army.com4. Syrian Electronic Army website

Page 60 of 61

5. https://www.hackread.com/syrian-electronic-army-hacks-bluehost-hostgator-for-hosting-terrorist-websites/

6. Specially Designated Nationals List (SDN) http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx

7. EIGI 10K 20148. http://who.is/domain-history/kahanetzadak.com9. EIGI 10K 201410. Terrorism in Cyberspace: The Next Generation11. http://www.boston.com/news/nation/articles/2008/03/27/unwittingly_hosting_terror/?page=f

ull12. The respect websites’ ‘terms of service’13. http://rss.uribl.com/nic/14. https://www.scamwarners.com/forum/viewtopic.php?f=4&t=1118415. Source: http://cyberwarzone.com/malicious-history-of-66-96-147-66/16. http://www.malwareurl.com/ns_listing.php?as=AS2987317. https://wpsecuritylock.com/godaddy-other-network-providers-bulk-injection-hack/18. http://www.tucows.com/domain-registrar-tucows-inc-reaches-milestone-10000000-domains-

under-management/19. http://www.reuters.com/article/2015/03/05/us-usa-trade-piracy-idUSKBN0M121F2015030520. http://blog.legitscript.com/2015/01/twitter-spat-russian-rogue-internet-pharmacy-operator/

Underinvestment leads to Service Outages and High Churn

1. EIGI Investor Presentation2. EIGI earnings call3. http://cloudtweaks.com/2014/07/endurance-new-way-measure-churn/4. GDDY and EIGI filings5. CRM SEC filings6. GCR due diligence7. HostGator & BlueHost Are Down Due To EIG Outage

Source: http://www.ibtimes.com/hostgator-bluehost-are-down-due-eig-outage-1523952

8. https://twitter.com/BrittMalka/with_replies9. Source: http://www.webhostingtalk.com/showthread.php?t=145122010. Source: https://www.drupal.org/node/240707311. http://www.datacenterknowledge.com/archives/2013/08/05/how-did-the-failure-of-network-

switches-at-a-little-known-data-center-in-provo-utah-knock-four-major-services-and-millions-of-web-pages-offline/

12. EIGI Investor Presentation, EIGI, GDDY, WIX, WWWW filings13. http://cloudtweaks.com/2014/07/endurance-new-way-measure-churn/14. Q1 2014 earnings call

Page 61 of 61

15. Business failure Source: https://www.linkedin.com/pulse/20140915223641-170128193-what-are-the-real-small-business-survival-rates

40%-100%+ of Profits are Suspect: Putting it all Together

1. EIGI Investor Presentation, and WWWW, GDDY, EIGI SEC filings.2. EIGI 10K3. Bizland rollup strategy:

http://www.indianewengland.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=EE1BCDFDFC484619A8FF862ED5FA696A&AudID=FB6219837BDE4E39877F2E53436E947B

4. GDDY, WWWW, and GDDY SEC filings5. EIGI 10K6. SEC Correspondence letter

Valuation: Interest Expense Exceeds Normalized Adj. EBITDA

1. EIGI, GDDY SEC filings