Let's Gowex: La Charada Pescanova (A Pescanovan Charade)

GOTHAM CITY RESEARCH LLC
www.gothamcityresearch.com
[email protected]
Lets Gowex:
a Pescanovan Charade
en espaol: La Charada Pescanova
Price Target: 0.00 per share
The company [Iberx/Gowex] made a large

profit on a 42.0 million
turnover in 2002
In 2003, the Company

had 2.7M turnover
from three sales staff.
Gowex,
2003
Boingo
iPass
Ruckus
Gogo
Towerstream
Average
GOWEX
Gowex,
2010
Audit Fee as a % of Revenues
2009
2010
2011
1.80%
0.67%
0.50%
0.00%
0.89%
0.77%
0.07%
0.07%
0.06%
2012
1.86%
0.84%
0.84%
0.46%
0.70%
0.94%
0.05%
2013
1.57%
0.97%
0.48%
0.44%
n.a.
0.87%
0.04%
Does this make

any sense?
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Page 2 of 93
Table of Contents
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII.
Disclaimer
Summary
Introduction
Actual Revenue are 90% Less than Reported
Gowex Telecom & a History of Material Misrepresentations
GOW says 100K, Analyst says 35K, We say 5K
2013 Engineering Revenue < 3 million
2013 Advertising Revenue no more than 2 million
2013 Roaming and Offloading Revenue < 1 million
Other Serious Warning Signs
Gowex Shares are Worth 0.00 per Share
Appendix A: CFO Martinez Undisclosed Related Party
Appendix B: Evidence SeaSuntel is Gowex
Appendix C: Gowexs Past China Foray Failed
Appendix D: Poor Reviews and De Minimis Customer Service
Appendix E: Engineering Revenue Derivation
Appendix F: Additional Advertising Findings
End Notes
Page 3 of 93

a GOTHAM CITY RESEARCHS OPINIONS
Gowex shares are worth 0.00 per share.

Over 90% of Gowexs reported revenues do not exist. We
estimate GOWs actual revenues to be <10 million.
The shares will be suspended, just as Pescanovas shares
were suspended.
SUMMARY OF FINDINGS
Gowexs actual Wireless revenues are at most 10% of what

GOW reports in its financial statements.
GOWs Hotspot network it owns or manages is ~5K in size.
CEO told us 100K+ & JBCapitalMarkets estimates 35K.
GOWs audit fee is 40,000, which makes sense if Gowexs
actual revenues are only 5%-10% of reported revenue.
90% of Telecom revenue originated from undisclosed
related parties, tied to GOW CFO & an early investor. We
have evidence Gowexs largest customer was really itself.
Gowex Telecom (i.e. Iber-x) website has not been updated
in years. It appears to be no longer in business.
Gowex told some investors that New York City was paying
them 7.5 million. GOW told us 2 million. The real
number is <200,000, according to New York City.
Gowex does not publicly disclose basic metrics, such as
hotspot count or wireless revenue segment details.
The head of investor relations is the CEOs wife. She signed
off on GOWs annual reports.
The June 5th MallPlaza press release (in English) makes
demonstrably false claims. The same press release in the
native Spanish omits the false claims.
GOW lied to the European Unions Transparency Register,
claiming it spent over 50 mm in political contributions.
CEO Jenaro Garcia was a Director of Advanced Refractive
Technologies, a penny stock fraud whose shares were
revoked by the US Securities and Exchange Commission.
GOWs private market valuation is only 0.14 per share,
based on Arqivas acquisition valuation.
Company: Lets Gowex

CEO: Jenaro Garca Martn
Ticker: GOW, ALGOW
Exchanges: Mercado
Alternative Bursatil,
Euronext
Price Target: 0.00/share
Share price: 19.91/share
(as of the 230th of June)
Market cap: 1.43B
52-week high: 27.99
52-week low: 5.05
Shares outstanding:
71.85M
2013 Revenue/employee:
1,062,791
2013 Wages & Salaries
/employee: 19,573
2013 Audit fee as % of
Revenue: 0.04%
2013 Cash: 3.59M
2013 Debt: 20.61M
Fiscal Year: Dec. 31
Auditor: M.A. Auditores
S.L.
Page 4 of 93
INTRODUCTION
Lets Gowex is a very rare company. CEO Jenaro Garcia and GOWs promoters would have you believe it
is rare, just as Google, Microsoft, and Facebook are rare. Gotham City Research initially found it to be
rare as well, just for all the wrong reasons. The following initially concerned us:
GOW claims to generate double digit revenue growth & dougle digit profit margins, by providing
free wifi, yet its publicly-traded peers (Boingo, iPass, Towerstream, etc) lose money.1
Even more puzzling, all prior for-profit attempts to provide free-wifi on mass scale have failed.2
Even giants Starbucks/Mcdonalds, who provide free wifi, and generate the traffic to potentially
monetize, are believed to provide free wifi while incurring net costs.
Despite all this, Gowexs revenue per employee exceeds Googles, Facebooks, and Microsofts,
and its market value exceeds the sum of Boingo, iPass, & Towerstreams market values.
Gowex does not disclose basic operating metrics, such as its hotspot count or a breakdown of
revenues, in its public filings. Imagine a retailer, such as Carrefour, not disclosing store count.
Gowex came public on the Mercado Alternativo Bursatil (itself, a new concept in 2009). The
MAB is similar to Londons AIM and the US pinksheet/OTC, both of which are rife with fraud.
Gowex originated in Spain, its shares are listed in France (in addition to Spain), and most of its
revenue and operations are international.
Arqiva acquired a comparable company at a valuation that implies GOW is worth less than 1.3
Gowex piqued our interest, so we decided to dig deeper. After 8 months of diligence, we found Gowex
is a lot worse than we initially thought. GOW is a zero. We specifically noticed 3 clear patterns. Firstly,
GOW has a proven track record of making demonstrably false claims. Second, Gowex provides different
answers, to different investors. Third, wireless industry experts are unable to make sense of GOW.
Our due diligence, involved field research across several continents, speaking with industry
operators/investors, speaking with the company, and constantly asking ourselves what are we missing?
We are confident GOW is a charade & shares are worthless. Here are some highlights of our findings:
Gowexs reported revenues are overstated by at least 10x, according to GCR calculations. In fact,
90% of their reported revenues were suspect before it became a publicly traded company.
The actual # of hotspots they own/manage is 5% of what GOW told us (20% of JBs estimate).
GOW paid its auditor around 50,000 (on average) in the last 3 years. That is between 1/10th
1/20th of what its peers pay. Its audit fee makes sense if their actual revenue is < 10 million.
Misleading (false) claims are made to English and French investors, but not to Spanish investors.
Many industry insiders and experts dont understand Gowexs alleged business model. They
dont understand how they are making money. There are documented examples of the CEO
making materially false statements.
Were Gotham City Research or someone else not to have come along, the Gowex charade could have
continued for few more years, costing investors several more billions of dollars. We believe the days of
Gowex and Jenaro Garca Martns misrepresentations are coming to an end.
Page 5 of 93
Over 90% of Gowexs Reported Revenues are Suspect

Lets Gowex is a highly unusual company. If the numbers are to be believed, GOW is a
breathtakingly good business, with truly exceptional revenue per employee metrics1:
REVENUE PER EMPLOYEE - Gowex versus Others
2007
2008
2009
2010
2011
0.47
0.28
0.89
0.87
0.87
0.98
0.98
0.50
0.52
0.47
0.50
0.57
in mms
2012
Boingo
0.47
iPass
0.26
Google
0.85
Microsoft
0.59
Facebook
0.96
GOWEX
1.70
1.10
1.21
1.60
0.98
1.41
Assume 1 euro = 1.36 dollars. All except for Gowex originally in $s.
2013
0.38
0.23
0.87
0.59
1.06
1.06
When we say exceptional we mean not only far superior versus its peers, but far above nearly
all other businesses in history. 1.0-1.7 million in Revenue per employee handily exceeds those
of Google, Microsoft, Facebook, etc.
Gotham City Research does not trust Gowexs reported revenues, and believes Gowex is too
good to be true. In fact, the following sections in this report detail segment by segment why
we believe over 90% of Gowexs reported revenues are incorrect. We calculate GOWs true
2013 revenue to be ~8 million2:
Gotham Estimate of GOW 2013 Revenue
Gotham Reported
Telecom
2.4
25.4
Wireless
5.75 157.2
Total Revenue
8.2 182.6
8 million revenues would better explain why GOW uses an unknown auditor, & pays so little3:
Boingo
iPass
Ruckus
Gogo
towerstream
Average
GOWEX

2009
2010
2011
1.80%
0.67%
0.50%
0.00%
0.89%
0.77%
0.07%
0.07%
0.06%
2012
1.86%
0.84%
0.84%
0.46%
0.70%
0.94%
0.05%
2013
1.57%
0.97%
0.48%
0.44%
n.a.
0.87%
0.04%
It would also explain why the CEOs wife is the head of Investor Relations, and signed off on the 2013
annual report (very last page in the English version). Make no mistake: GOW is worth 0.00 per share.
Page 6 of 93

Gowex (formerly known as Iber-x) is largely the story of its CEO, Jenaro Garca Martn. Martn was once
a Florida-based stockbroker who in the late 1990s decided to enter the land of telecom and
entrepreneurship. He founded Iber-x in 1999 (or 1998; his linked profile says 1999, but the offering
circular says 1998), and quickly attracted attention with some bold forecasts1:
The company [Gowex Telecom] expects to break even by the end of this year and make a profit
of $500,000 by 2001, Mr. Garcia said. He estimates Iber-X will post a $100 million net profit by
2005. September 26th, 2000 , WSJE: Iber-X Of Spain Prepares To Enter Markets In Americas
Although a lot can happen in 5 years time, it seems Jenaro was insincere about his $100 million profit
forecast (actual revenues were low single digits). Just 2 months later, he told the Wall Street Journal2:
Whatever CEO Jenaro Garca Martn motivations were at the time, its evident that he and his business
failed miserably after the dot com bubble crashed. Gotham City Research believes that what might have
been occasional dishonesty in the past, soon became habitual for Jenaro Garca Martn3:
The company [Iber-x/Gowex] made a large profit on a 42.0 million turnover in 2002, said
CEO Jenaro Garcia. Wednesday, March 19 2003
In fact, Gowex only generated 2.7 million turnover by 2003 according to its offering circular filing.
After the early 2000s, his attempted expansion into China (via the acquisition of Ace Asia) evidently
failed (see appendix C). We believe he kept a low profile and quietly ran a small business (funded, in part,
by government grants) until the debut of the Mercado Alternativo Bursatil (MAB) in 2008. Gotham
City Research believes 90% of Gowex Telecoms reported revenues never existed in substance, & were
booked so Gowex could go public and successfully issue shares. The following support our opinions:
Gowex Telecom (Iber-x) does not seem to exist in substance as a business. Its websites have
been inactive for years. Gowex.com shows no evidence of an active Gowex telecom business.
Gowex Telecoms three largest customers (80%-90% of reported revenue) in 2007-2008 are
actually undisclosed related parties tied to Gowexs CFO and a former shareholder.
Reported revenue from Gowex Telecom remained flat 2008-2013. We are confident there are
no new customers that magically replaced the 90% of the 2007-2008 fictitious revenues.
GOW told us that Telefonica is one of its largest Gowex Telecom customers. Based on our due
diligence, this is false. In fact, we have evidence that Gowex is a customer of Telefonica.
When we recently asked the CEO about Gowex Telecoms customers, Jenaro Garcia did not
mention any of the three largest customers that accounted for 80%-90% 2007-2008 revenue.4
Page 7 of 93
Gowex Telecoms Website and Portal Seem Abandoned, Not Updated in Many Years
The Gowex Telecom portal, the Iber-X portal, has not been updated in many years5:
In fact, http://iber-x.net/ , http://iber-x.com/ , http://www.iber-x.es/ do not work at all. According to

who.is, http://iber-x.com/ is inactive. The http://www.Iberx.com domain no longer belongs to Gowex.
It clearly used to belong to Gowex, as shown below:
If you think the Gowex simply abandoned its iber-x.com domain, and replaced it with a gowex domain
for its Gowex Telecom operation, we encourage you to visit http://www.gowex.com. There are no signs
of an on-going Gowex telecom business. Theres no place for a prospective customer to make a
purchase or even review which products/services Gowex offers. Finally, if you visit the wayback machine
and view http://www.iber-x.com , you find Iber-x has not actively updated its website in over 10 years6.
Page 8 of 93
~50% of Gowex Telecoms Reported Revenue Come from Seasuntel S.L., an Undisclosed Related Party
Given that iber-x.com has not been updated in years, investors may wonder how Gowex reports any
revenue from Gowex Telecom. Gowexs offering circular filing offers a few hints, as it provides a
breakdown of revenue by customer. The largest customers are shown below7:
Related Party Customers

SeaSunTel S.L.
Panel Consulting, S.L.
Line Informatica , S.L.
Fundacion Red Sin Fronteras
Total %
2007
54.7%
16.5%
14.1%
1.5%
86.7%
2008
47.4%
18.5%
12.7%
0.0%
78.6%
Seasuntel is clearly Gowexs largest customer. We believe Gowexs revenues from Seasuntel lack
economic substance, as Seasuntel is:
Gowexs largest customer

Gowexs largest supplier
An undisclosed related party, secretly controlled by Gonzalez Javier Martin, through PJ Gris
Inversiones (a Gowex shareholder at the time of GOWs IPO)
Tied to REDSINFRONTERAS.ORG, a foundation owned by Gowex (which too happens to be a
customer; more on this later).
Seasuntels website currently does not work. Old versions of the website (as saved by the
waybackmachine) shows an unsophisticated website.
Seasuntel stopped filing financial statements after 2008.
There is evidence that Gowex is Seasuntel. (See Appendix B)
Seasuntel is secretly controlled by Gonzalez Javier Martin, through PJ Gris Inversiones (a Gowex
shareholder at the time of GOWs IPO, as shown below)8:
Page 9 of 93
Javier Gonzalez Martin is tied to PJ Gris Inversiones9:
The same Javier Gonzalez Martin of PJ Gris Inversiones S.L. is owner of Seasuntel S.L. (Seasuntels
address is Pintor Juan Gris, 5 3 B ,MADRID PJ Gris Inversiones is abbreviation of Pintor Juan Gris)10:
Page 10 of 93
Further Reason to Doubt the Economic Substance of Gowexs Seasuntel Revenues

In its offering circular (note 16 short term payables), Gowex claims to have purchased over 15 million
from Seasuntel, making Seasuntel Gowexs largest supplier11:
Gowex claims to have paid Seasuntel 15 million, and then claims to have earned 12 million from
Seasuntel, while being secretly controlled by one of its shareholders. The Gowex/Seasuntel transactions
resemble round-trip transactions (transactions that lack economic substance):
Seasuntel "pays"
Gowex Telecom
12 million
Gowex Telecom
"pays" Seasuntel
15 million
Page 11 of 93
Seasuntels website currently does not work. Old versions of the website (as saved by the
waybackmachine) show a very simple (two tabs only) website12:
Based on the above, Seasuntel does not appear to be much of a business. Furthermore, there are
additional signs that the relationship between it and Gowex is even closer (from above):
SEASUNTEL est involucrado en el plan 4X4 Wi-Fi, colaborando con la Fundacin
REDSINFRONTERAS.ORG, para extender el conocimiento de la Sociedad de la Informacin a las
zonas rurales.
REDSINFRONTERAS.ORG, as we will show later, is a foundation owned by Gowex (which too happens
to be a customer). Seasuntel stopped filing financial statements after 2008. Furthermore, there is
evidence that suggests Gowex is Seasuntel, as detailed in Appendix B.
Page 12 of 93
Gowex Telecoms Next 2 Largest Customers are Secretly Tied to Gowexs CFO
Seasuntel accounted for ~50% of Gowexs Telecom reported revenue. Panel Consulting and Line
Informatica (i.e., Line Informatica Profesional) account for ~30% of reported revenue13:

SeaSunTel S.L.
Total %
2007
54.7%
16.5%
14.1%
1.5%
86.7%
2008
47.4%
18.5%
12.7%
0.0%
78.6%
We believe Gowexs reported revenue from Panel Consulting and Line Informatica lack economic
substance for the following reasons (See Appendix A for additional details, including citations):
Panel Consulting and Line Informatica Professional (the correct name) are both secretly tied to
Gowexs CFO, Francisco Manuel Martinez Marugan.
Francisco Manuel Martinez Marugans past is quite suspect. There is very little information
about the CFO from his Linkedin profile, gowex website biography, or the biography found in the
offering circular. None of his biographies mention his history or ties with Panel or Line.
Given the CFOs shady background, secret ties to Gowexs largest customers, Gowexs low audit
fees, and CEO Jenaro Garcias Wifes involvement with signing off on Gows financial
statements these are not coincidences.
Panel Consulting and Line Informatica Panel share a tie with a man named Antonio Salmeron
Campos.
Line Informatica Profesional sl website doesnt work: http://www.line-pro.es/
Please see the Appendix A for more information. In it we:
Detail the above findings, just as we detailed the relationship between Gowex and Seasuntel in
prior pages.
Demonstrate how Gowexs reported revenue from C. I. NETCOM TIC BROKER GROUP SL, AS TIC
BROKER SL, and Fundcion Red Sin Fronteras are of doubtful substance as well.
Show how Gowex Telecoms 2008 revenue does not even equal the sum of its revenues by
customer. The numbers do not add.
2013 Telecom Revenues are Just as Materially False as 2007-2008 Telecom Revenues
Seasuntel, Panel Consulting, and Line Informatica accounted for 80%-90% of 2007-2008 telecom
revenues. Since then, total telecom revenues have steadily remained between 20-25 million14:
in millions of s
Telecom (Iber-x)
Wireless
Total Revenue
Gowex Revenue by Reported Segments

2007
2008
2009
17.0
21.0
24.8
0.0
3.2
10.4
17.0
24.2
35.2
2010
23.0
26.6
49.6
2011
20.2
46.5
66.7
2012
23.5
90.8
114.3
2013
25.4
157.2
182.6
Page 13 of 93
We asked Gowex who their largest Telecom customers are. The CEO listed: Jazztel, France Telecom, Colt,
Telefonica (Jenaro specifically said Telefonica one of our largest), Level 3, Tata com, and Tiscali.15
Strangely none of these companies are listed as Gowexs largest customers in 2007-2008.
We investigated the claim that Telefonica is one of their largest customers. This is what we found16:
Telefonica is not paying Gowex.

There is a contract between Gowex and Telefonica.
Gowex is paying Telefonica. Unclear for what purposes.
Interestingly enough, it seems Tiscali may not be a customer either. Per Gowexs circular Tiscali is a
supplier, not customer17:
GOW mentions Jazztel as a customer in its offering circular... just not as a large customer:
Which is odd given how long they have (purportedly) had a relationship with Jazztel:
Equally odd, Colt is mentioned as a 2000 client reference , yet it is not mentioned as a customer at all
in the 2010s offering circular. We are confident that Gowex did not magically replace 90% of its
reported 2007-2008 revenues with any of these customers. All the evidence provided here, and in the
remainder of the report, support our belief that over 90% of current Telecom revenues do not exist.
Page 14 of 93
Hotspots: GOW says 100K, Analyst says 35K, We say 5K

History does not repeat itself, but it does rhyme Mark Twain
We recently spoke with Gowex and CEO Jenaro Garcia Martin and asked him 4 simple questions1:
How many hotspots did Gowex have in 2013?

JB Analyst report says 17% of your 2013 revenue came from advertising. Is this correct?
How much is NYC paying you? How much is San Francisco paying you?
Who are your largest Gowex Telecom customers?
We found that all his answers were false or misleading. When asked about hotspots, he initially said
Gowex does not disclose & explained why. When we pressured him, he answered in the 100,000s. He
has privately told other investors similarly. According to Gowexs hotspot map, the count is only 5,5302:
Gowex Hotspot Count
Gowex told us
Gowex told some investors
Gowex told other investors
JB Capital Analyst
Gowex's hotspot map*
* as of May 2014
2013
100,000s
200,000
100,000
35,000
5,530
When we indirectly asked him if the JB analyst reports 2013 wireless revenue breakdown is correct, he
claimed Gowex does not disclose Wireless revenue by segment. He justified their opaque policy with3:
We dont disclose revenue or gross margin details in order to prevent copycats. (note we
never asked for profit-level details).
Im not able / I dont want to provide different communications to different analysts, investors
Theres a Harvard Business Review report saying that opaque businesses work better in the
stock exchange than transparent ones.
Gotham City Research finds his rationale for not disclosing odd, given the fact Gowex used to provide
Wireless revenue details (Jenaro conveniently did not tell us they used to disclose!)4:
Page 15 of 93
In 2012 Gowex stopped disclosing the revenue components of its Wireless segment. Unfortunately for
Jenaro Garcia, Gotham City Research is fully aware that he has provided some investors, with the
wireless revenue detail. Jenaro must foolishly think investors do not speak amongst themselves (or with
Wall Street analysts). Therefore, as a matter of fact, Gowex has provided different communications to
different investors. This directly contradicts his claim: Im not able / I dont want to provide different
communications to different analysts, investors.
We know that the JB analyst reports wireless business revenue breakdown is consistent with what
Jenaro has told other investors (but refuses to disclose in its public filings)5:
Gotham City Research believes Gowex does not publicly disclose hotspot count or provide wireless
revenue breakdown, ultimately because Wireless revenues, just like its Telecom revenues, are materially
overstated (we think over 90%). The following lead us to distrust over 90% of Gowex Wireless revenues:
Owned/managed hotspots are only ~5,000, or less than 5% of what hes told people privately.
Over 50% of Gowex hotspots are owned by Towerstream, who earned only $1 million in 2013,
renting to Gowex & one other client.6 We doubt Gowexs claim that it earned over 100 million
in roaming/offloading and engineering revenues in 2013 when the supplier of over half of
GOWs network makes only $1 million in revenue.
Based on poor hotspot quality, traffic, and locations, there is no way Gowex can monetize on
their hotspots as they claim. Reviews are poor, the app itself doesnt work well, slow speed, etc.
CEO Garcia avoids meeting with wireless industry experts, but is happy to speak with retail
investors and day traders. We think Garcia fears legitimate experts as they might expose his
charade.7
China website doesnt look like its been updated since it first launched, per wayback machine.
The domain China.gowex.cn is for sale. Gowex conveniently omits that Gowex/Iber-xs past
forays into China failed miserably.
The MallPlaza deal press release (in english) claims 800 million potential users (which is
impossible, as it would exceed the combined populations of those coountries). In the native
Spanish version of the press release, they dont mention that at all.
Page 16 of 93
Gowex Hotspots the True Count

Given that one can count the number of Gowex Hotspots through its hotspot maps, we struggle to find a
good reason why Gowex and CEO Garcia refuse to publicly disclose its hotspot count. We actually
counted all the hotspots as disclosed on their map (both on website and app). The number is closer to
5,000 as of April 2014, not 100,000 or 200,000 (see the next page for a more detailed table)8:
Hotspot
Country
count
Argentina
129
Belgium
15
Chile
10
Congo
11
France
465
Ireland
48
Italy
22
Spain
2,114
USA
2,700
UAE
16
TOTAL
5,530
This means that the company has to generate 28,427 per hotspot per year to meet its reported 2013
wireless revenue of 157 million.
Imagine if retailers (such as Walmart, Carrefour, Mercadona) refused to disclose their store count. It
would be counterproductive for its investors and customers for a retailer not to disclose. Customers
would be confused where stores are located (which would undermine potential sales). And investors
would wonder what the company has to hide, leading to lower stock valuations. Analogously, Gowexs
refusal to disclose its hotspot count makes no business sense.
Page 17 of 93
Name
A Coruna
Ajaccio
Ajaccio - bus
Alcala de Guadaira
Alcolea de Calatrava
Aviles
Aviles kiosk
Barcares
Barcelona
Barcelona kiosk
Belgium
Beziers
Bilbao Bus
Bilbao kiosk
Bordeaux
Buenos Aires
Buenos Aires - bus
Burger King
Burgos
Burjassot
Caf&tapas
Caf&te
Calpe
Carrieres
Ceuta
Chiringuito
City Sightseeing
Conil de la Frontera
Deblas
Delinas
Dubai
Dublin
Eibar
ETS****
Gijon
Gijon kiosk
Girona
Godoy Cruz
Granada kiosk
Langreo
Lanzarote
Liege
Llaollao
Los Angeles
Madrid
Madrid - California
Madrid bus
Madrid kiosk
Madrid restaurant
Malaga
Malaga kiosk
Mallorca
Meco
Menorca
Mieres
Murcia
Napoli
New York
Nice
Orense
Oviedo kiosk
Pans&co
Parla
Perpignan
Pointe-Noire
Pollo Campero
Puerto de Santa Maria
Puerto del Rosario
RATP
RDT 13
San Francisco
Santiago
Saudi Arabia
Segovia
Seraing
Sevilla kiosk
Sharjah
SNCF
Sodexo
Valladolid
VilleFranche-Sur-Mer
Hotspot
Country
count
Hotspot type
Spain
2 franchise
France
45 City
France
2 Transport
Spain
39 City
Spain
3 City
Spain
73 City
Spain
5 City
France
51 City
Spain
2 City
Spain
16 City
Belgium
1 Transport
France
6 City
Spain
10 Transport
Spain
34 City
France
24 City
Argentina
60 City
Argentina
21 Transport
Spain
8 franchise
Spain
217 City
Spain
140 City
Spain
16 franchise
Spain
179 franchise
Spain
39 City
France
33 City
Spain
4 City
Spain
17 franchise
Spain
75 Transport
Spain
15 City
Spain
19 Transport
Spain
14 franchise
UAE
10 Transport
Ireland
48 City
Spain
25 City
Spain
26 City
Spain
141 City
Spain
22 City
Spain
166 City
Argentina
48 City
Spain
40 City
Spain
21 City
Spain
1 Transport
Belgium
10 City
Spain
12 franchise
U.S
1 City
Spain
53 City
Spain
4 franchise
Spain
10 Transport
Spain
213 City
Spain
3 franchise
Spain
2 City
Spain
52 City
Spain
9 City
Spain
5 City
Spain
4 City
Spain
22 City
Spain
24 City
Italy
22 City
U.S
2,297 City
France
31 City
Spain
69 City
Spain
14 City
Spain
89 franchise
Spain
10 City
France
28 City
Congo
11 City
Spain
13 franchise
Spain
39 City
Spain
21 City
France
66 Transport
France
127 Transport
U.S
402 City
Chile
10 City
UAE
4 Transport
Spain
12 Transport
Belgium
4 Roaming
Spain
31 City
UAE
2 Transport
France
25 Transport
Spain
13 franchise
Spain
21 City
France
27 City
TOTAL:
5,530
Page 18 of 93
JB Capital Analyst Estimates 35,000 hotspots, 7x Actual hotspot count

JB Capital Markets, in their initiation report, stated the following9:
GOWEX does not disclose at this time the number of hotspots available, although using previously
available data offered by the company, we believe GOWEX manages over 35,000 of its own
hotspots, with a global network made up of over 500,000 hotspots.
Note that JB Capital is the most legitimate brokerage firm covering Gowex. Despite its market value,
Gowex has failed to attract a major Wall Street investment bank. We are confident this is because even
amongst investment bankers, Gowex lacks credibility.
Over 86% of Hotspots in Outdoor Areas, Severely Limiting Monetization Potential
Not only is Gowexs actual hotspot a fraction of what they convey to investors, over 86% of Gowexs
5,530 hotspots are located outdoors (in cities)10:
Gowex Hotspots by Location Type

4,771
86.3%
Cities (mostly outdoors)
Franchise (private vendors)
370
6.7%
Transport (Bus/transit)
385
7.0%
TOTAL
5,526
100.0%
Outdoor locations are notably poor quality, for the purpose of monetization (especially New York)
Outdoor hotspots are much more difficult to monetize, as connection traffic tends to be low. Consider:
42% of the 5,526 Gowex hotspots are in New York alone.

New York is known for its four seasons. New Yorkers do not stand around outside during the
cold winter, and the colder parts of Spring and Fall. New Yorkers also do not stand around
outside during the humid summers. They prefer wifi in a warm environment during the winter,
or an air-conditioned environment during the hot and humid summers.
Given that Starbucks, Mcdonalds, Panera, and others provide free wifi, with heat in the winter,
and air conditioning in the summer, Gowexs hotspots are comparatively of little economic value
to would-be advertisers, telecom operators, etc.
In the hotspots near residential areas (and/or indoors), why would an operator pay Gowex for
providing residents free wifi, when the operator makes money for providing internet access?
We believe that only 2,500-3,000 of 5,530 total hotspots are unique locations, which further
limits Gowexs financial potential for these locations.
In addition to the reasons stated above, note that nearly all Gowexs New York and San Francisco
hotspots are owned by Towerstream. As Gowex rents from Towerstream, Gowexs potential
installation/maintenance revenues are limited, nearly non-existent. Half of Gowexs hotspot (New York
and San Francisco) belong to Towerstream, yet Towerstream reported less than $1 million in revenue.
Page 19 of 93
Reviews for the Gowex App and Hotspots are Poor

It seems the only people who have good things to say about Gowex is the company itself & day traders.
Weve found that consumers throughout the world rate Gowexs free wifi app poorly. Take for example
these Google Play /Android reviews (see Appendix D for more reviews and user commentary)11:
Note the following (the above is actually representative of all the reviews weve encountered):
One of the three 5-star rated reviews appears to be fake

Two of them are suspiciously short, lack any descriptive detail, as to why the app is good.
The only 4-star rated review should be a 1-star rating, judging by the review comment.
Most of the 1-star ratings describe the app freezing, not working, and other specific grievances.
The reviews on the iOS (Apple iPhone) are similarly poor. Here are some highlights:12
The number of ratings and average ratings are not good. In fact, like Android, many of the good
ratings are suspicious. So the true rating is probably lower.
More than half of the users say they cant connect.
Gotham City Researchs Hotspot Due Diligence Gowex Wifi Is Irregular, Inconsistent, and Slow
Rather than simply relying on all the review we read, Gotham City Research tested the mobile app and
hotspots. Overall, we found that all complaints have merit. Highlights include:
The Gowex App Freezes regularly The Gowex app regularly freezes. It freezed on us at least
once per day. We regularly had to reboot smartphones. We are relatively tech savvy, so it
wasnt a big problem. We can see how this would be problem for many other people.
Page 20 of 93
Hotspots do not work 30%-50% of the time We found that 30%-50% of the time, we had no
wifi connection even though the app said so. Other times, the hotspot simply was not detected.
It wasnt clear to us if its the apps fault (but the hotspot is fine), or if the hotspot was nonexistent/non-functional but the app was fine.
Slow speeds When the app works, we were able to do all kinds of basic web surfing (e-mail,
twitter, text websites). However, we were NEVER able to load a simple youtube clip.
In New York, Often Required to Login to Website In New York, we regularly had to log-in to a
portal website via the smartphone browser, even though we were already logged in via the app.
This is clearly very annoying.
Gowex does not provide uninterrupted wifi service We were never able to sustain a Gowex
signal while in motion. We had to stand still. In fact, Gowexs free wifi speed and reliability are
far worse than Starbucks, Mcdonalds, or Paneras free wifi.
Gowexs Deceptive Mall Plaza Press Release: One for English Speakers, Another for Spanish Speakers
Just weeks ago, Gowex announced an agreement with Mall Plaza, in which it claimed13:
The objective of the partnership between GOWEX and Plaza is to reach each and every one of the
chains shopping centres in Chile, Colombia and Peru in order to offer free WiFi to 840 million
potential users per year. -
Given that Chile, Peru, & Colombias combined population is 95 million, the above is difficult to believe14:
Page 21 of 93
in millions Population
Chile
17.46
Peru
29.99
Colombia
47.70
TOTAL
95.15
To make matters far worse, Gowex does not include that paragraph,nor those far-fetched claims, in the
original Spanish version of the same press release (you must see it for yourself)
http://www.gowex.com/gowex-y-mall-plaza-lideran-el-mayor-proyecto-de-wifi-gratuito-en-retailers-detodo-latinoamerica/
China Gowex Website Has Been Inactive for Years
Gowex claims15:
China is a very important market for us, we are forecasting that it will be around 30 percent of
revenues overall and more than 50 percent of our revenue from emerging markets.
http://www.bjreview.com.cn/business/txt/2013-09/26/content_569067_2.htm
Difficult to believe, given Gowexs China website remains unchanged since 201216:
July 2nd, 2012 - https://web.archive.org/web/20120702113302/http://china.gowex.com/?
June 24, 2014 - http://china.gowex.com/
Page 22 of 93
Is China Gowex Fake? China.Gowex.cn domain is for sale

.com domains tend to belong to US-domiciled companies, whereas .cn websites tend to belong to
China-domiciled companies. Out of curiosity we checked the http://china.gowex.cn domain, as it would
be a logical choice for Gowex if they are serious about their China ambitions. Heres what we found:
Please see Appendix C for information on Gowexs past failures in China. We find that, like most other
things, Gowex has misrepresented and omitted its China history.
Gowexs Recent Cisco Announcement

Many traders became excited when Gowex recently announced GOWEX and Cisco Announce Global
Strategic Relationship to Boost Smart Wi-Fi Connectivity Solutions for Cities. GOWEX will become a
Cisco Smart+Connected Communities (S+CC) global strategic partner. A more careful reading of the
press releases, however, leads us to ask: Who is paying who? From the language within the press
release, it almost sounds as if Cisco is getting paid (perhaps by Gowex).
Such promotional news releases (involving Cisco) are not new. Well leave readers with this past Iberx/Cisco announcement, which bears a resemblance to recent news:17
Page 23 of 93

Minneapolis has had a free wifi deal with a local ISP, US Internet. Its a 10 year contract worth
$1.5 million per year for 10 years. This is the largest private/public partnership (in economic
terms) in the United States. No one else is doing what Minneapolis is doing, citywide. The other
stuff private operators do is more systems integration. Cities will pay for setup and
maintenance, but thats that. Theres not much money to be found there. Founder of
Muniwireless, Esme Vos1
Thus far, Gotham City Research has asserted the following, regarding Gowex:
Gowex has engaged in a clear pattern of material misrepresentations, since the early 2000s.
Nearly all of Gowexs legacy revenues (i.e. Gowex Telecom) exist, only in paper.
Gowexs true owned/managed hotspot count is ~5% of what the company claims to investors.
Gowexs claim that it earned over 100 million in roaming/offloading and engineering revenues
in 2013 is too good to be true, given that the supplier of over half of GOWs network,
Towerstream, made only $1 million in revenue. Also Gowexs mobile app freezes frequently,
user ratings are poor, hotspot quality/speeds are low, and far better alternatives exist.
In this section, we specifically delve deeply into the Engineering sub-segment2:
We believe 2013 engineering revenues are no more than 10% of the 40 million JB analyst estimate, as:
We gathered dozens of municipal contracts (between cities & Gowex). The contracts capture 75%
of the 5,530 Gowex hotspots, worldwide, and imply Engineering revenue < 3 million.
Page 24 of 93
CEO Jenaro Garcia told us New York City paid Gowex 2 million, while telling other investors that
NYC was paying Gowex 7.5mm to install free Wi-Fi throughout the city.3
NYC invested $900,000 in total, split between 5 vendors of (Gowex is 1 of the 5), according to
NYC officials. We were unable to find any other contracts between New York City and Gowex.4
There is no free wifi hotspot contract in place between City of San Francisco and Gowex. San
Francisco is not paying Gowex.5
Towerstream owns nearly all of Gowexs US hotspots. Gowex rents these hotspots from
Towerstream. This limits Gowexs ability to monetize via wireless setup and installation (a.k.a.
systems integration) as the property & infrastructure doesnt below to Gowex.6
Towerstream reported 2013 less than $1 million revenue from its share wireless segment (of
which only a fraction of that comes from Gowex). Gowex reported 157mm, yet Towerstreams
market value is $124 million, and Gowexs is around $2 billion.
CEO Mr. Garcia told investors about a 10mm contract with a public transportation company
involving Wi-Fi installation on ~1,000 buses. We believe their only relationship with Gowex was
as part of a free trial in which Gowex had installed Wi-Fi on a handful of buses. We understand
that the transportation company asked Gowex to withdraw the misleading press release.7
Without revealing any of our evidence of Gowexs material misrepresentations, we asked Esme Vos,
Muniwireless industry expert: What do you know about Gowex?
Here are highlights from our conversation:
I dont know how they make money. Their financials and disclosures are very strange.
Cities will pay for setup and maintenance of free wireless hotspots, but theres not much
money to be found here.
Gowex doesnt want people to know they are working with Towerstream.
I tried to talk to them many times when they came to Silicon Valley last year. I tried to setup a
meeting. Nothing came of it. (Gotham City Research believes CEO Garcia deliberately avoids
meeting with her and other actual experts, but meets day traders with open arms)
Minneapolis has had a free wifi deal with a local ISP, US Internet. Its a 10 year contract worth
$1.5 million per year for 10 years. This is the largest private/public partnership (in economic
terms) in the United States. No one else is doing what Minneapolis is doing, citywide.
Philadelphia hired earthlink, for purpose of free wifi, but then they abandoned it. Earthlink
then had contract negotiations with San Francisco, but abandoned it. Earthlink eventually closed
down its municipal wireless business. MetroFi is went under after trying to make money from
muni Wi-Fi networks. There simply has been no viable national free wifi business
Esme Vos has followed and chronicled the muniwireless industry, and its economics, longer than
Gowexs free wifi business has existed. Gotham City Research believes her opinions, stated above, are
very important. That being said, we are confident that even Esme Vos will be shocked (though not
necessarily surprised) by our findings in this report. In the above-cited conversation, we specifically did
not share our work or opinions with her, so as not to bias her.
Page 25 of 93
Implied Average Revenue Engineering Revenue per Contract Too High

Engineering revenue consists of fees cities pay Gowex for the installation and maintenance of free Wi-Fi
hotspots (also euphemistically referred to as systems integration). Gowex claims most of their
engineering revenue is paid by cities to offer free wifi. Gowex also announced that a handful of
transportation-related contracts involving Wi-Fi hotspot installation and maintenance. Based on
Gowexs press releases, filings, and JB Capital estimates, we find that Gowexs reported results imply
that the average revenue per contract (with a city) is around 400,000 per contract8:
Implied Average Revenue per Contract
in millions
2010
2011
Engineering revenues
15.0
27.0
Wireless Smart Cities
30
52
Transportation companies
2
15
Total engineering contracts
32
67
Revenue per contract
0.47
0.40
2012
31.8
65
17
82
0.39
2013
40.5
83
23
106
0.38
Based on actual contracts the average annualized contract value is ~10%-20% of 400,000 (see Appendix
E).
While Gowex may sound visionary and noble in its statements regarding Wireless Smart Cities we find
their statements highly manipulative and misleading, for the following reasons:
These cities do not belong to Gowex, nor does Gowex have any exclusive relationship with them
(especially the larger cities, i.e. the ones that financially matter).
Gowex does not provide uninterrupted, city-wide free wireless connection.
Gowex does not publicly disclose its hotspot counts. We think the focus on wireless smart cities
is a thinly-veiled attempt to distract investors from asking very basic questions.
Industry experts (such as Esme Vos) reveal that cities are simply not paying any company
significant amounts of money to install Wi-Fi hotspots (recall Minnesota is the lone exception).
And if they are, most payments are for one-off installations.
Actual Contract-based Derivations Show Gowexs Engineering Revenues <3mm

We gathered dozens of publicly available municipal contracts between cities and Gowex. In some cases,
such as with San Francisco, we were unable to find a contract it appears no contract exists. We believe
our contract sample size covers 75% of Gowexs 5,530 hotspots. We extrapolate our findings to Gowexs
entire hotspot network and conclude that Gowexs entire revenue from their engineering segment is
around 2.9mm in 2013 (see Appendix E for a more granular breakdown):
Estimate of Gowex's True Engineering Revenue
Total annual value of all contracts found 2,150,929
Total Addressable hotspots
4,121
Average revenue per hotspot
522
Total Gowex hotspots per WiFi map
5,530
Implied total annual revenue 2,886,347
Reported Engineering revenue 40,500,000
Actual as % of Reported
7%
Page 26 of 93
Gowex lists the following engineering revenue success stories on their website9:
The below table summarizes the contract terms for all the engineering success stories listed above:
City
Nice
Dublin
New York
San Francisco
Corsica
Girona
Aviles
Buenos Aires
Burgos
Bordeaux
Ourense
Hotspots
31
48
2,297
402
47
166
73
81
217
24
69
Engineering Contracts for "Success Story" Cities

Contract terms
The contract with Nice was for a maximum of 88,000 per year
we believe the city of Dublin is not paying Gowex any amount for the installation
The contract with New York EDC(full name) was $900,000 split between five vendors of which Gowex was one
City does not pay Gowex
185,000 over unspecified term
55,000 a year for 3 years
Unknown
306,000 over unspecified period
28,000 a year; old contract was 60,000 a year
Page 27 of 93

No one has made money from advertising on wifi (specifically free wifi). Thats why Earthlink closed
down its Muni Wi-Fi business, and why MetroFi went bankrupt after trying to make money from muni
Wi-Fi networks. Founder of MuniWireless, who has been following the wifi industry for 11+ years1
So if cities are not paying Gowex (at least in the amounts they claim), who is? Advertisers?
Gotham City Research believes Gowexs claimed media/advertising revenues are demonstrably false and
materially inaccurate. For example, if you simply compare Boingo versus Gowex, you find some comical
results. Boingo has more hotspots, more airport hotspots (which advertisers pay up for), much better ad
formats and higher prices, and much more traffic. Yet, Gowex generates 3.3x Boingos ad revenue?2
Is this Possible?
Boingo
Hotspots with Ads
12,000
Airport Hotspots with Ads
65
Landing Page Traffic Rank
42,227
App Downloads
451,152
Ad Revenue (in $ millions)
9.1
Gowex
5,530
1
894,546
182,848
30.4
Page 28 of 93
We believe that actual revenue generated from advertising is no more than 2 million , less than 10% of
what Gowex tells investors. The following support our belief:
Using Boingos operating metrics, we calculate Gowexs advertising revenue in 2013 to be no

more than 2 million, or less than 10% of the JB Capital Markets analysts estimate.
Gowexs ads are of poor quality (static, print display ads). Advertisers pay far less for these.
Based on market rates for print ads, Gowexs Ad revenue is far less than our 2 million estimate.
We only saw three ads on the Gowex mobile app - H&M, Pepsi, M&M. None of the success
stories on Gowexs website lists either of these three CPGs, nor any advertising agencies.
Geolocalized coupons the coupons button on the Gowex app does not work.
Jenaro claims free wifi failed in the past because smartphones were not common, implying
Gowex is successful because of smartphone adoption. His explanation is a ruse, as we show.
The Founder of MuniWireless, who has been following the space longer than Gowex has been in
business said No one has made money from advertising on wifi (specifically free wifi)
Gowexs Advertising Revenues No More than 2 million Based on Boingo Metrics

According to JB Capital Markets, Gowexs Media 2013 revenue is around 30 million3:
We dont fault the JB Capital Markets analyst, as the 30 million estimate for 2013 is consistent with
what CEO Jenaro Garcia Martin has privately told investors. We believe Gowexs revenue from
ads/media is no more than 2 million, using Boingo-related metrics:
Gowex 2013 Ad Revenue - calculated with Boingo Metrics
Hotspots with Ads
5,530
Annual Foot Traffic per Hotspot
233,333
Annual Foot Traffic
1,290,333,333
Foot Traffic Conversion Rate
Ad engagements
Price per ad engagement
Gowex 2013 Ad Revenue
0.99%
12,759,963
$0.21
1,931,195
Page 29 of 93
The Annual Foot Traffic per Hotspot, Foot Traffic Conversion Rate, and Price per ad engagement
metrics shown above are based on publicly available information provided by Boingo, as we show below.
Boingo has 2.8 billion annual visitors, and 12,000+ locations supporting ads4:
Boingo generates 33 million+ ad engagements at airports per year:
Boingo generates ~60 million ad engagements, in total, per year:
Boingo's Ad Engagements / Year

Airports 33,000,000
hotel 13,000,000
sports bars
6,000,000
subways
3,500,000
Shopping Malls
1,300,000
Stadiums
n.a.
City Centers
2,900,000
TOTAL 59,700,000
The non-airport ad engagement metrics above are provided on boingos website (see Appendix F for
screenshots).
Page 30 of 93
Putting all the Boingo operating metrics together, we calculate Boingos Annual Foot Traffic per
Hotspot, Foot Traffic Conversion Rate, and Price per ad engagement (same as revenue per Ad
Engagement):
Boingo's Hotspot Ad Engagement Metrics

Annual Foot Traffic
2,800,000,000
Hotspots with Ads
12,000
Foot Traffic per Hotspot
233,333
2013 Ad Revenue
Annual Ad Engagements
Revenue per Ad Engagement
$12,350,000
60,000,000
$0.21
Annual Ad Engagements - Non-Airport

Annual Foot Traffic - Non-Airport
Foot Traffic Conversion Rate
26,700,000
2,700,000,000
0.99%
Note: Boingos annual non-airport foot traffic is calculated by subtracting airport foot traffic of 100
million from total foot traffic of 2.8 billion. Both are available in the images above.
Why We Believe Gowexs 2013 Ad/Media Revenue is less than 2 million
Airports, while small in number, drive over 50% of Boingos total ad engagements. According to data
scraped from Gowexs Wi-Fi map, Gowex has 1 airport lounge in Belgium. Boingo has 66. Because
airports (rightfully) generate more ad engagements, they warrant a premium price per engagement.
This means Gowexs price per engagement is lower than Boingos, which means Gowexs ad revenues
are far less than 2 million. But theres far more evidence to suggest Gowex price per engagement is
not only lower than Boingos, it is far lower.
A Closer Look at Ad Engagements per Revenue
One way in which free Wi-Fi providers monetize is via advertising on their (1) landing pages (before the
user is able to surf the web) and (2) mobile apps that they provide.
Advertising can come in various forms:
Display ads,
Sponsored connections, (for example, Free Wi-Fi, provided by Google)
Incentivized app downloads
Videos
As we already demonstrated, advertisers are willing to pay more for audiences in airports. Advertisers
are also willing to pay more for certain formats (such as video). For example, when you see Watch this
video to connect for free or Download this app to unlock free Wi-Fi , these are the more expensive ad
engagements.
Page 31 of 93
The Boingo website seeks to help advertisers understand the variety of ad formats:
Each formats has a different rate. Passive print/banner ads are priced the lowest whereas others
command far higher prices:6
Ad Revenue per Engagement - by Category
App Downloads/Email Collection
$1.5000
Video
$1.2000
Display Ads
$0.4000
Passive Display Ads
$0.0002
Note that the first three shown App Downloads/Email Collection, Video , and Display Ads all
guarantee some form of engagement.
Gowexs Ad Quality is Poor & Ad formats are Unsophisticated
Gowex users access hotspots through either a landing page (Gowexs advertising platform WILOC.com)
or via Gowexs mobile app. Here is a screenshot of the landing page. We never saw a single ad7:
Page 32 of 93
We only see Ads, once we scrolled down:
The only ads on the landing page, WILOC.com are at the bottom of the page. Users have to scroll down.
Display ads at the bottom of web pages have only a fraction of the value to advertisers compared to
those found at the top. The display ads are also very simple print ads.
If we look closely at the ads, two of them are in Spanish even though this is from a US hotspot. Ironically,
WILOC stands for Wi-Fi Location and is supposed to be a geolocalized content platform (we were not
in a Hispanic-heavy location).
The other ad is a booking.com ad. It is likely an affiliate deal. Pricing on affiliate deals are even worse.
Gowex only gets paid if a visitor successfully books a hotel. When you click the banner, it takes you to a
booking.com page with affiliate branding on the header:
(http://www.booking.com/index.html?aid=332146;sid=27ffb8111eadd98bb5e5e19dd4886eb4;dcid=1&l
ang=en-gb).
Page 33 of 93
Our Observations Apply Equally to iPads, iPhones, PCs and Android Phones
The ads shown via iPad browser are also of low quality except one display banner at the top:
iPhone browser:
We found that the iPhone browser and PC browser appear identical, with the same ads.
Page 34 of 93
Lets compare Gowexs poor landing page ads with Boingos landing page ads. The Boingo ad captures
the full page & requires users to watch the video ad before obtaining wifi access:
Gowexs landing page ads are passive display ads (which add least value to advertisers, and generate
the lowest possible revenue)
If we attempt to access free wifi through, Gowexs mobile app, Users are greeted with a static H&M
David Beckham ad, at the bottom (we found no geolocalization we have always been greeted with
that same ad):
Page 35 of 93
Once the app loads, we see an ambiguous M&Ms ad (again, no geolocalization. We see the same M&M
cartoons each time):
In fact, even after testing 100s of hotspots, we only saw three ads (repetitively): The H&M ad, the
M&Ms ad, and a Pepsi ad. All were static display ads.
Boingos mobile app, on the other hand, allows its clients to pose app download ads:
Page 36 of 93
Gowexs Web Presence and Reach are Very Low

WILOC.com is so low in the traffic that Alexa does not even have historical data for it. Its global rank is
894,546 and rank in Spain is only 41,2758:
Boingos landing page platform, www.boingohotspot.net, on the other hand is ranked 20X 42,227
globally:
See Appendix F for:
Similarweb.com traffic rankings showing similar results

Finally, total app downloads (iOS + Android combined) since January 2013 for Boingo is around
450,000, whereas its only around 180,000 for Gowex.
Page 37 of 93
Geolocalized Coupons seem Doubtful

On its website, Gowex claims9:
Zoomed in from the Gowex Media section:
We find the above claims untrue, as the coupon button on the mobile app doesnt work:
Page 38 of 93
The Nintendo Success Story

Gowex claims10:
Yet we do not see any mention of Nintendo on the Gowex app. No channels, not even a print ad.
Page 39 of 93

The JB analyst estimates that Gowex generated 78 million of Network revenue in 20131:
The JB analysts estimate of 78 million of 2013 Network revenue is consistent with what Gowex has
told other investors (recall, Gowex used to disclose revenues by all these segments up to 2011).
Network revenue is equivalent to Offloading + Roaming, per Gowexs own presentations:
Page 40 of 93
Gotham City Research believes that actual Gowex 2013 Network revenues are at most 10% of what the
company claims for the following reasons:
iPass only managed to generate $2.4mm in 2013 revenue in their Open Mobile Exchange
segment on a network of 2.2 million hotspots, or $1 per hotspot per year.
Even if Gowex were to monetize on a roaming network of 500,000 hotspots, Gowexs revenue
would amount to only ~$500,000 per year, per iPasss results.
Gowex is believed to have 165 Wi-Fi roaming partners, yet there are only 90 companies listed on
the Wireless Broadband Alliance.
Recall, over half of Gowexs hotspots are owned by Towerstream, who earned just $1 million
from their shared wireless segment. Its difficult to believe that Gowex generates 80 revenues
when the property/infrastructure supplier only earns ~1% of that amount.
Industry operators believe Gowexs claimed 2013 Network Revenue amount exceeds the total
financial activity in the world, the total market size. They also believe it is simply not possible for
a Gowex to be monetizing third party networks in this form.2
Various roaming/offloading Success story executives have never heard of, or are mystified by
Gowexs revenue claims. Some of these executives said they are not aware of any contract
between their company and Gowex.3
Boingo does not even list Gowex as a roaming partner, on their website.
According to iPass Metrics, Gowex Roaming + Offloading Revenue <1 million

iPass is a well-established Wi-Fi aggregator with one of the largest Wi-Fi network footprints in the world.
Its Open Mobile Exchange segment is similar to Gowexs roaming segment, and only generated
$2.4mm of revenue in 20134:
iPass Open Mobile Exchange Revenue
2011
$678,000
2012
2013
$786,000 $2,362,000
With 2.2 million hotspots worldwide, this means iPass generated about $1 per hotspot per year. So even
if Gowex was able to monetize on a roaming network of 500,000 hotspots (an estimate the JB analyst
provide), their comparable revenue would amount to less than $500,000 per year:
Gowex Roaming Revenue, as Implied by iPass Metrics

iPass Open Mobile Exchange Revenue $2,362,000
Hotspot network
2,200,000
Revenue per hotspot
$1.07
Gowex roaming hotspot count
500,000
Implied Gowex Roaming Revenue
394,719
Page 41 of 93
90 Operators Listed on the Wireless Broadband Exchange, yet Gowex Claims 165 Roaming Partners
The jb analyst says (his language, if you read carefully, is definitive) Gowex has 165 Wi-fi roaming
partners:5
As of the end of 2013, GOWEXs footprint includes 83 cities connected with Wireless Smart City
services (more than 125m inhabitants), more than 20 transport agencies that carry 3.5bn
passengers per year, 110 countries covered with 165 Wi-Fi roaming partners and 130 telecom
operators that currently are signed to the offloading and Wi-Fi roaming services.
Based on prior precedents namely, that Jenaro Garcia Martin has provided investors, privately, with a
breakdown of wireless revenues that are in-line with the JB analysts wireless segment estimates we
believe all of the information JB analyst provides (that is not in public filings) ultimately originates from
Gowex. Furthermore, the language the JB analyst uses to describe the 165 wi-fi roaming partners lacks
the I believe, we estimate language.
165 wifi roaming partners is difficult to believe, given the Wireless Broadband Exchange only lists 906:
Page 42 of 93
Page 43 of 93
If the # of partners is to be believed, Gowex generates nearly 500,000, per year, in roaming +
offloading revenue, per partner:
Gowex 2013 Roaming + Offloading

Revenue per Partner
Roaming + Offloading Revenues 77,900,000
Partners
165
Revenue per partner
472,121
iPass recently disclosed it had signed up 30 carriers to their Open Mobile Exchange segment7. Given that
iPass has been present in the market for many years we find it difficult to believe Gowex has anywhere
close to 165 companies paying to access its network.
Based on conversations with industry experts, 500,000 per partner is difficult to believe. 500,000 per
partner, at 165 partners, is impossible.
Ironically, if Gowex has fewer than 165 partners, the revenue per partner becomes even more incredible,
and its claimed Roaming and Offloading revenue, even more difficult to believe:
Roaming + Offloading Revenues 77,900,000 77,900,000 77,900,000 77,900,000
Partners
165
125
100
75
Revenue per partner
472,121
623,200
779,000 1,038,667
77,900,000 77,900,000
50
25
1,558,000 3,116,000
Boingo does not even list Gowex as a roaming partner, on their website
Gowex lists Boingo as a roaming success story on their website8:
Page 44 of 93
Boingo does not list Gowex as a roaming and offload partner9:
Possible reasons Boingo does not list Gowex as a roaming/offloading partner:
Boingo is not a Gowex roaming/offloading partner

Boingo is a Gowex roaming/offloading partner, but the wireless usage/activity level is small, and
the revenues so small, its not worth mentioning
In either case, it supports our belief that Gowexs true roaming + offloading revenue is less than 10% of
what the company has claimed it to be.
Page 45 of 93

In this section we discuss the softer qualities that support our belief that Gowex is largely a charade. We
start with the laughable audit fees and Gowexs auditor.
Gowexs Auditor, M&A Auditores S.L.
Lets Gowexs auditor is a company called M&A Auditores, S.L out of Madrid. This company is largely
unknown even within Spain. Gowex seems to be their only publicly-traded audit client. It is exceedingly
rare for a $1-$2 billion market value company to choose an unknown auditor. In 2013, Gowexs audit fee
totaled 68,500. Boingo and iPass paid $1.7mm and $1.1mm respectively.1
We visited M&A Auditores, S.L. office, which was more of an apartment, within an apartment complex
(in an area that did not seem like an affluent area). The auditors office was an 8x10 room. There were
very old looking laptops. We obtained the auditors business card2:
He did not have a business email address (which is very strange), so he wrote his gmail account on the
back of his business card:
Page 46 of 93
Gowexs Audit Fee Implies a Business 5%-10% its Purported Size

Though GOWs 40,000-70,000 audit fee does not pass the smell test (i.e. the absolute amount), it
makes even lesser sense once you compare Gowexs audit fees as a % of its revenues, versus its peers3:
Boingo
iPass
Ruckus
Gogo
towerstream
Average
GOWEX

2009
2010
2011
1.80%
0.67%
0.50%
0.00%
0.89%
0.77%
0.07%
0.07%
0.06%
2012
1.86%
0.84%
0.84%
0.46%
0.70%
0.94%
0.05%
2013
1.57%
0.97%
0.48%
0.44%
n.a.
0.87%
0.04%
Is a 68,500 audit fee sensible for a company with 182,600,000 of revenue (majority of which is reported to
be outside Spain), worldwide operations and dozens of subsidiaries? Of course it is not. The absurdly low
audit fee is supportive of our thesis, that over 90% of Gowexs overall revenues simply do not exist.
Our findings and opinions are consistent with the following accounting industry averages4:
According to CFO.com , Public companies with revenues between $25 million and $99 million
pay an average $419,300 for an audit5
Page 47 of 93
The Head of Investor Relations is CEO Jenaro Garcias Wife, and She Signs off on the Annual Reports
As if matters cannot get murkier, we found that the CEOs wife is the head of Investor Relations6:
We found Florencia Mates signing off on the 2013 annual report (very last page in the English version):
Page 48 of 93
If you dont believe that she is the CEOs wife, take a look at the Offering Circular filing:
Gowex Flagrantly Lied to the European Unions Transparency Register, about its Political Contributions
GOWEX lied about to the EUs Transparency Register, about its political spending . It claimed to have
spent 50 million on political spending7:
Gowexs lie was so egregious, the Transparency Register commented on its behavior8:
Others, like GOWEX, a telecommunications company that reported only one client (a Spanish
municipality), 90 lobbyists and 50 million euros lobby expenditure, simply updated their entries
to more realistic numbers (5000 euros and two lobbyists)
Page 49 of 93
Jenaro Garcia Martins Ownership Does he still own shares?

The CEO controls Cash Devices SL and Biotelgy SA. Through these two vehicles, Garcia controlled more
than 50% of the shares.
It seems Biotelgy SA was dissolved in 20129:
Given that Biotelgy VC S.A. is a Luxembourg entity, and its status is unclear, we wonder if the CEO
actually still owns the shares. Who knows, maybe he found a means of secretly selling his shares.
Listing on the Mercado Alternativo Burstil (MAB)
Lets Gowex was the third company to go public on the MAB, in 2010. MAB was created in 2008, and is
similar to the United States Pink Sheets/OTC or Londons AIM exchanges. These latter exchanges tend
to attract penny stock frauds, and serial white collar fraudsters. The MAB allows smaller companies to
float shares, with a more flexible regulatory system than is applicable to the main market.
Page 50 of 93
Jenaro Garcias Questionable Behavior via Twitter

We believe CEO Garcia will have much bigger problems to worry about, but we wonder about the
legality of saying the following on twitter10:
The CEO boasts about Gowexs New York Office, yet gowexs website doesnt list a New York office11:
Page 51 of 93
Gowexs website doesnt list a New York office (they may share a New York office with Quindell plc)12:
Based on our investigation, Gowex is likely renting office space from a company called Servcorp.
Servcorp provides Virtual Office and Short Term Office Rental solutions.
We think Gowexs usage of Servcorp validates our belief that Gowexs operations are only a tiny fraction
as they report. Given how critical New York is to Gowex, why would the company not establish a more
permanent New York presence? It makes no sense.
Jenaro Garcia Martins Ties to Stock Fraud Advanced Refractive Technologies
On July 26, 2006 Advanced Refractive Technologies Inc. announced the nomination of Jenaro Garcia as a
director13:
SAN CLEMENTE, Calif., July 24, 2006 (PRIMEZONE) -- Advanced Refractive
Technologies Inc. (ART) (Pink Sheets:ARFR) is pleased to announce the nomination of
two new Directors. Jenaro Garcia Martin is founder and CEO of IBER-X (IBER Band
Exchange SA) located in Madrid, Spain. IBER-X manages $130 million dollars and
offers its services in eight countries. Mr. Garcia Martin is also co-founder of Blue
Emerald Investment Bank, S.A., located in Luxembourg. Blue Emerald
concentrates on restructuring and investing in companies in the $10 to $50 million
value level. Mr. Garcia Martin stated, "I am pleased to begin working with ART as an
outside independent director to help position the company to effectively compete in the
market place going forward with its new products and partners."
Shares of Advanced Refractive Technologies Inc. were eventually suspended. It was associated with the
Chinese reverse merger fraud stocks.
Page 52 of 93
The following links provide more information:
http://www.abajournal.com/magazine/article/redflagging_china_regulators_eye_chinese_companies_using_reverse_mergers/
https://www.sec.gov/litigation/admin/2011/34-64567.pdf
http://sharesleuth.com/investigations/2006/10/utek_corp
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=12424610
VisiJet, Inc. Debuts as Advanced Refractive Technologies; New Ticker Symbol http://www.marketwired.com/press-release/visijet-inc-debuts-as-advanced-refractivetechnologies-new-ticker-symbol-662604.htm
Jenaro Garcia Martins Offering Circular Biography Omits Key Work Experiences
There is no mention of his experience as a Miami financial advisor. He also does not disclose his
directorship at Advanced Refractive Technologies, or role at Blue Emerald Investment Bank, S.A., located
in Luxembourg.
The Curious Case of RedSinFronteras.org
Gowex claims that redsinfronteras.org was set up to help the technologically disadvantaged14:
Page 53 of 93
Oddly, redsinfronteras.org appears as a Gowex customer as well:
Gowex owns redsinfronteras.org domain, and set it (as shown in prior page):
If you type in REDSINFRONTERAS.ORG it goes to: http://www.gowex.com/conoce-gowex/wifisolidario/redsinfronteras/
Page 54 of 93
In fact, it seems redsinfronteras.org is gowex/iber-x back in 2007 as well, per the waybackmachine:
https://web.archive.org/web/20070421212416/http://www.redsinfronteras.org/modules/sections/inde
x.php?op=viewarticle&artid=2
True Believers or Paid Promoters?

This French kid, Benjamin Sacchet, is all over twitter. He provides a link to a video showing gowex stock
on his linkedin profile:
Page 55 of 93
Its unclear if Ben is a true believer of the Gowex story or a paid stock promoter.
Page 56 of 93

Gotham City Research believes GOW and ALGOW are worth 0.00 per share for the following reasons:
GOWs total actual revenues, as we calculate, are no more than 10 million. There is no value in
the business as a going concern.
Gotham Estimate of GOW 2013 Revenue

Gotham Reported
Telecom
2.4
25.4
Wireless
5.75 157.2
Total Revenue
8.2 182.6
The companys debts outweight its cash. The liquidation of the company is a non-positive
number. We dont even calculate possible legal costs and liability for its misrepresentations.
Because the reported revenues are materially inaccurate (over 90% inaccurate), this means the
companys historical profits are inaccurate, and its entire financial statements are false.
The dividend is meaningless because it is such a small amount compared against how much
capital Gowex has raised.
Those who doubt our findings, should assign a value to the shares no greater than 1.00 per share
Arqiva snapped up UK public WiFi hotspot operator Spectrum for 23 million1. Arqiva had 15,500 access
points at time of transaction. This works out to value per hotspot of 1,657 euros. Based on this per
hotspot valuation, GOW is worth between 0.13 and 0.81 per share:
GOWEX Valuation per Arqiva Acquisition

Value per hotspot
1,657
hotspot count from map
5,530
hotspots (analyst estimate)
35,000
Shares outstanding
71,850,000
GOW's Value per share - Low
0.13
GOW's Value per share - High
0.81
Even if you were to believe Gowex had 100,000 hotspots, shares would be worth 2.31 per share.
Page 57 of 93
Appendix A: CFO Martinez Undisclosed Related Party

The CFO of Gowex, Francisco Martinez, is secretly tied to 2 of Gowex Telecoms Largest Customers
Gowexs offering circular mentions a Line Informatica as one of its largest customers:

SeaSunTel S.L.
Total %
2007
54.7%
16.5%
14.1%
1.5%
86.7%
2008
47.4%
18.5%
12.7%
0.0%
78.6%
In fact Line Informatica is the wrong entity, as it has been defunct since the 1990s:
Its business is described as line paint, glass, and wallpaper

Its website doesnt appear to work www.lineinformatica.com
Source: http://www.axesor.es/Informes-Empresas/480799/LINE_INFORMATICA_SL.html
Page 58 of 93
The correct entity is Line Informatica Profesional

The CFO of Gowex, Francisco Martinez, has been a representative of Line Informatica profesional since
2001
Page 59 of 93
Gowex CFO was also manager of Panel Consulting, Gowex Telecoms 2nd largest customer, in 2005 and
2006.
Sources: Axesor.es Francisco Manuel Martinez Marugan, Line Informatica Profesional SL, Panel
Consulting Y Solutions SL
Page 60 of 93
Panel Consulting and Line Informatica Profesional also share a common employee / manager.
Line Informatica Profesional sl website does not work, seems out of business: http://www.line-pro.es/
Page 61 of 93
Screenshots of Line informatica Profesional website from the past shows a very simple website:
http://web.archive.org/web/20110408153243/http://www.line-pro.es/
The above screenshot is saved in 2011. We find that a screenshot of the website saved in 2006 looks
identical (we wonder how genuine of a business it was):
Source: https://web.archive.org/web/20060110041708/http://www.line-pro.es/
http://telecos.cnmc.es:8080/c/document_library/get_file?uuid=83818136-37d3-47cb-acb619bbf4296bb6&groupId=10138
Page 62 of 93
CFO Francisco Martinez has a very shady past

Linkedin no history (beyond Gowex) provided:
https://www.linkedin.com/pub/francisco-martinez/14/a05/529
gowex website provides no biography for the CFO, instead it links to his linkedin:
Source: http://www.gowex.com/en/about-gowex/team/
Page 63 of 93
Gowexs offering circular provides some additional information, but does not mention his ties to Line
Informatica Profesional nor Panel Consulting:
C. I. NETCOM TIC BROKER GROUP SL and AS TIC BROKER SL Appear Fake

After SeaSuntel, Line Informatica Profesional, and Panel Consulting, the next 2 largest customers in 2008,
were AS TIC BROKER SL and C. I. NETCOM TIC BROKER GROUP SL:
C. I. NETCOM TIC BROKER GROUP SL was incorporated in 2008 and is a real estate company. As a result,
we doubt these revenues are real:
http://www.expansion.com/directorio-empresas/c-i-netcom-tic-broker-group-sl_5445684_L65_46.html
Page 64 of 93
AS TIC BROKER SL Seems Fake as well

Just like C. I. NETCOM TIC BROKER GROUP SL, AS TIC BROKER SL is a real estate company, incorporated
in 2008:
Source: http://www.expansion.com/directorio-empresas/as-tic-broker-sl_5465981_L65_08.html
Gowex Telecoms Revenue Do Not Add up to their Sum of the Parts
The offering circular below shows consolidated totals:
Page 65 of 93
The 20.99 million nor the 24.912 million in revenue (boxed in red, in prior page) do not equal 26.26
million total telecom revenue shown below (in red box):
Page 66 of 93
Appendix B: Evidence SeaSuntel is Gowex

Is SeaSunTel effectively = Gowex?
Given theres precedent whereby Gowex recognized sales to itself (e.g. REDSINFRONTERAS.ORG), we
wondered if SeaSunTel is effectively a part of Gowex for the following reasons:
Seasuntel and Gowex seem tied to IP Addresses '83.150.193.0 - 83.150.193.255'
http://www.tcpiputils.com/browse/ip-address/83.150.193.0
Gowex and SeaSuntel share the same Abuse contact for IP addresses '83.150.193.0 83.150.193.255'. Abuse contact = '[email protected]'
Page 67 of 93
Domains on 213.190.0.0/19 Seem to belong to Gowex
Source: http://www.tcpiputils.com/browse/ip-address/213.190.0.0-213.190.31.255
Source: http://myip.ms/view/ip_owners/172670/Let_S_Gowex_S_A.html
Page 68 of 93
Seasuntel.com ipaddress = 213.190.7.50 according to https://www.site24x7.com/find-ipaddress-of-web-site.html
Page 69 of 93
Appendix C: Gowexs Past China Foray Failed

Gowex Failed in China in the Past, and other China-related Findings
According to the Telecompaper (and found elsewhere), Iber-X buys ACE for Euro3 mil in cash, shares :
Asia Capacity Exchange (ACE) (Hong Kong) has been acquired by Iber-X (Spain), both telecoms
capacity exchanges, for Euro3 mil in cash and shares. The move marks Iber-X's first foray into
Asia. The company is especially attracted to the Chinese market, which is due to be liberalised in
2006, according to Iber-X CEO Jenaro Garcia. Iber-X is considering forming a JV with China
Telecom and the Chinese govt. The company made a large profit on a Euro42 mil turnover in
2002, said Garcia. It has over 300 customer in the Iberian peninsula and Latin America who
conducted Euro300 mil of business through its platform in 2002. Wednesday 19 March 2003 |
Source: http://www.telecompaper.com/news/iberx-buys-ace-for-euro3-mil-in-cash-shares-380374#.U5U6EPldUz4
The below circled in red (found in the offering circular), proves Gowex/Iber-xs past foray into China (via
their ACE Hong Kong acquisition) failed miserably. Gowex does not even mention, in the offering circular,
that it was in China in the past, via asia-x.com , nor does it even mention Gowex acquired Ace Asia:
Page 70 of 93
It gets stranger: Gowex actually names Ace-Asia as a competitor, in its offering circular (with no mention
of the fact Gowex owns/owned Ace-Asia), with no mention of past ties:
If you visit the link provided, http://www.ace-asia.com , It redirects to http://www.itquotes.com/

In fact, according to wayback machines archives, http://www.ace-asia.com did not exist in 2010 (the
time of the offering circular):
Page 71 of 93
The archives redirect to http://www.itquotes.com instead:

https://web.archive.org/web/20110101134339/http://www.itquotes.com/
Archives of Asia-x.com (yes, named just like iber-x.com ) shows it too disappeared, and went in-active
around the same time iber-x.co did (circa 2003):
Asia-X is a subsidiary of Iber-X to expand the business Iber-X has in Europe and Latinamerican
markets, and is based in Hong Kong.
https://web.archive.org/web/20031229053739/http://www.asia-x.com/
all the archived versions of asia-x.com look abandoned after 2003 (the website looks as if it no
longer was updated).
Page 72 of 93
Appendix D: Poor Reviews and De Minimis Customer Service

Comments from other mediums (e.g. media articles, blogs, etc):
I can see it listed as a possible wifi but the app crashes my HTC a lot. Took about 5-10 min to
show all the hot spots http://www.slashgear.com/gowex-free-wifi-hits-nyc-yes-its-real05272622/
Gowex free WiFi in Paris metro stations irritates users http://www.muniwireless.com/2012/07/04/gowex-free-wifi-in-paris-metro-stations-irritatesusers/
Free Wi-Fi in the subway in Paris: it was tested and it is disappointing French
http://www.01net.com/editorial/569083/wi-fi-gratuit-dans-le-metro-a-paris-on-l-a-teste-etc-est-decevant/
Users Complain About Non-existent Customer Service

A rather comical (but telling) twitter exchange between a Gowex app user and CEO Jenaro Garcia:
Page 73 of 93
Complaints Source https://twitter.com/alanhp/with_replies
The following user also complained about even poorer service. Unfortunately, unlike Alan Peres, he
didnt hear back:
Page 74 of 93
Page 75 of 93
https://twitter.com/robertomm772US/with_replies
Appannie shows poor ratings and not much recognition:
Page 76 of 93
We think the actual ratings are actually poorer. We suspect that many of the 5 star ratings are from the
company. For example:
Nearly all the 5 star ratings are vague. Doesnt sound like a user, but gowex employee:
Page 77 of 93
Page 78 of 93
Some actually read like a 1 star rating, but shows as a 5 star:
More reviews, Google Play app store:
Page 79 of 93
Page 80 of 93
Page 81 of 93
Poor reviews on iPhone as well:
Source: https://itunes.apple.com/us/app/free-wifi-gowex/id454964689?mt=8
Website map doesnt show hotspots in its default state, not user friendly
Page 82 of 93
Appendix E: Engineering Revenue Derivation

Contract
A Coruna
Ajaccio
Ajaccio - bus
Alcala de Guadaira
Alcolea de Calatrava
Aviles
Aviles kiosk
Barcares
Barcelona
Barcelona kiosk
Belgium
Beziers
Bilbao Bus
Bilbao kiosk
Bordeaux
Buenos Aires
Buenos Aires - bus
Burger King
Burgos
Burjassot
Caf&tapas
Caf&te
Calpe
Carrieres
Ceuta
Chiringuito
City Sightseeing
Conil de la Frontera
Deblas
Delinas
Dubai
Dublin
Eibar
ETS***
Gijon
Gijon kiosk
Girona
Godoy Cruz
Granada kiosk
Langreo
Lanzarote
Liege
Llaollao
Los Angeles
Madrid
Madrid - California
Madrid bus
Madrid kiosk
Madrid restaurant
Malaga
Malaga kiosk
Mallorca
Meco
Menorca
Mieres
Murcia
Napoli
New York****
Nice
Orense*****
Oviedo kiosk
Pans&co
Parla
Perpignan
Pointe-Noire
Pollo Campero
Puerto de Santa Maria
Puerto del Rosario
RATP
RDT 13
San Francisco
Santiago
Saudi Arabia
Segovia
Seraing
Sevilla kiosk
Sharjah
SNCF
Sodexo
Valladolid
VilleFranche-Sur-Mer******
Hotspot
Total
# of
Location
contract
Country Hotspots type*
Value**
Spain
2 franchise
France
45 City
95,334
France
2 Transport
89,800
Spain
39 City
120,000
Spain
3 City
Spain
73 City
171,528
Spain
5 City
France
51 City
177,000
Spain
2 City
Spain
16 City
Belgium
1 Transport
France
6 City
130,716
Spain
10 Transport
Spain
34 City
France
24 City
193,000
Argentina
60 City
Argentina
21 Transport
Spain
8 franchise
Spain
217 City
306,028
Spain
140 City
18,000
Spain
16 franchise
Spain
179 franchise
Spain
39 City
France
33 City
Spain
4 City
Spain
17 franchise
Spain
75 Transport
Spain
15 City
Spain
19 Transport
Spain
14 franchise
UAE
10 Transport
0
Ireland
48 City
0
Spain
25 City
5,044
Spain
26 City
41,000
Spain
141 City
50,000
Spain
22 City
Spain
166 City
165,000
Argentina
48 City
Spain
40 City
Spain
21 City
1,271
Spain
1 Transport
Belgium
10 City
Spain
12 franchise
U.S
1 City
Spain
53 City
32,700
Spain
4 franchise
Spain
10 Transport 279,560
Spain
213 City
Spain
3 franchise
Spain
2 City
Spain
52 City
Spain
9 City
Spain
5 City
Spain
4 City
Spain
22 City
40,000
Spain
24 City
Italy
22 City
U.S
2297 City
200,000
France
31 City
88,000
Spain
69 City
27,962
Spain
14 City
Spain
89 franchise
Spain
10 City
France
28 City
60,304
Congo
11 City
Spain
13 franchise
Spain
39 City
Spain
21 City
France
66 Transport
France
127 Transport 123,630
U.S
402 City
0
Chile
10 City
UAE
4 Transport
Spain
12 Transport
Belgium
4 Roaming
Spain
31 City
UAE
2 Transport
France
25 Transport
Spain
13 franchise
Spain
21 City
301,695
France
27 City
120,379
5,530
2,837,951
Contract Payment per

length
Year
unknown
unknown
unknown
95,334
89,800
120,000
42,882
unknown
177,000
unknown
130,716
48,250
unknown
1
306,028
18,000
unknown
unknown
unknown
3
1
0
0
5,044
4,000
50,000
55,000
1,271
32,700
93,187
40,000
n.a
1
1
200,000
88,000
27,962
unknown
60,304
unknown
n.a
123,630
0
unknown
3
301,695
40,126
2,150,929
Estimate of Gowex's True Engineering Revenue

Total annual value of all contracts found
2,150,929
Total Addressable hotspots
4,121
Average revenue per hotspot
522
Total Gowex hotspots per WiFi map
5,530
Implied total annual revenue
2,886,347
Reported Engineering revenue
40,500,000
Actual Revenue as % of Reported
7%
Page 83 of 93
Assumptions and notes:

a.
b.
c.
d.
e.
f.
g.
Source: Respective municipal sources & Gowex hotspot map as of April 2, 2014. Gowex has added hotspots since April
(specifically Chicago and Miami), however, these are Towerstream owned hotspots that Gowex rents. Therefore, as
discussed in the report, the monetization potential for these hotspots is non-existent to low (especially from an
engineering revenue perspective).
For some of the contracts displayed in the prior page, contract duration is unknown. Most contracts are 1 to 4 years
in duration. This number is adjusted to assume that unknown contract terms have a period of three years. For
example a $300,000 contract becomes a $100,000 contract on a yearly basis.
In the estimate of gowexs true engineering revenue in the bottom right hand corner, the Total annual value of all
contracts found is the sum of the values in the column titled Payment per year found in the larger table.
Total addressable hotspots are the hotspots where we were able to locate a contract.
Average revenue per hotspot = Total annual value of all contracts found divided by Total addressable hotspots
Total Gowex hotspots per WiFi map is the sum of all hotspots.
Implied total annual revenue is the product of Average revenue per hotspot and Total Gowex hotspots
Table specific assumptions:

*Based on our best estimate
**When info not available we always assumed the value of the contract excluded VAT
***Contract Terms include 29,000 upfront payment, and 4,000 per year in maintenance payments
****New York estimated based on $900,000 split between 5 entities.
*****We understand the prior Orense contract was worth 60,000 per year
******Understand that this contract was actually awarded to Atlanteam
We tried to match hotspots with specific contracts, however we cannot be 100% certain that specific contracts correspond to
specific hotspots as many contracts are missing salient information. Also we cannot be 100% certain that we are not missing
incremental information for hotspots we have already correlated with specific contracts.
As an illustrative example, see the following contract on the next page:
Page 84 of 93
Sample Contract city of Aviles
Source: https://sede.asturias.es/bopa/2012/05/10/2012-07756.pdf
Page 85 of 93
Appendix F: Additional Advertising Findings

Boingo ad engagements nonairport ad engagement
Page 86 of 93
Page 87 of 93
WILOC.com web rankings:
Page 88 of 93
Boingohotspot.net:
Source: Similarweb
Page 89 of 93
End Notes
Introduction
1. GOW filings, Boingo, iPass, and Towerstream filings.
2. According to the Founder of Muniwireless: There is no viable STAND ALONE free Wi-Fi business
unless you get millions of users.
3. Arqiva snaps up UK public WiFi hotspot operator Spectrum for 23m
http://thenextweb.com/uk/2012/07/02/arqiva-snaps-up-uk-public-wifi-hotspot-operatorspectrum-for-23m/
Actual Revenue are 90% Less than Reported
1. GOW, Boingo, iPass GOOG, MSFT, FB filings.
2. GOW filings, Gotham City Research calculations.
3. Boingo, iPass, Ruckus, Gogo, Towerstream, and GOW filings.

1. Iber-X Of Spain Prepares To Enter Markets In Americas September 26th, 2000 , WSJ Europe
2. Iber-x and Grupo Banesto Produce Online Financial-Settlement System, November 2nd 2000, WSJ
by Keith Johnson http://www2.iber-x.com/index.php?action=go&section=77
3. Iber-X buys ACE for Euro3 mil in cash, shares http://www.telecompaper.com/news/iberx-buysace-for-euro3-mil-in-cash-shares--380374
4. Conversation with Gowex Management
5. http://tsm.iber-x.com/
6. http://archive.org/web/ for iber-x.com
7. GOW Offering Circular
8.
9. Axesor.ex for PJ Gris Inversiones
10. Seasuntel SL, http://telecos.cnmc.es:8080/c/document_library/get_file?uuid=8381813637d3-47cb-acb6-19bbf4296bb6&groupId=10138
12. Seasuntel archived website
a. https://web.archive.org/web/20110130112751/http://seasuntel.com/seasuntel/
b. https://web.archive.org/web/20090221173541/http://www.seasuntel.com/seasuntel/1
565.html
14. GOW Offering circular, and annual reports
15. Conversation with Gowex Management
16. Gotham City Research investigation
17. Gowex Offering Circular
Page 90 of 93
GOW says 100K, Analyst says 35K, We say 5K

1. Conversation with GOW Management
2. Hotspots on the Gowex.com map and the Gowex free wifi mobile app, as of April 2014. JB
Capital Initiation Report, February 2014. Gotham City Research investigation.
3. Conversation with GOW Management
5. JBCapitalMarkets GOW Initiation Report, February 2014.
6. Towerstream filings, and conversation with management.
7. Muniwireless Founder: I tried to talk to them many times when they came to silicon valley last
year. Tried to setup meeting. Nothing came of it.
8. Gowex Hotspots on the Gowex.com map and the Gowex free wifi mobile app, as of April 2014.
9. JB Capital Initiation Report, February 2014.
10. Gowex Hotspots on the Gowex.com map and the Gowex free wifi mobile app, as of April 2014.
11. Google Play Store
12. iOS Apple APP store
13. Gowex Mall Plaza Press Release June 5th 2014 http://www.gowex.com/en/gowex-and-mallplaza-lead-the-largest-free-wifi-project-in-latin-america-retailers-sector2/#sthash.JGJ57mZH.dpuf
14. Worldbank
15. http://www.bjreview.com.cn/business/txt/2013-09/26/content_569067_2.htm
16. http://archive.org/web/ for china.gowex.com and http://china.gowex.com/
17. http://newsroom.cisco.com/release/1437076/GOWEX-and-Cisco-Announce-Global-StrategicRelationship-to-Boost-Smart-Wi-Fi-Connectivity-Solutions-for-Cities?utm_medium=rss
Cisco past headline Source: http://www2.iber-x.com/index.php?action=go&section=83
1.
2.
3.
4.
5.
6.
7.
8.
9.
Conversation with Esme Vos

From recent PDF presentation, included with the (last week) teach-in with Gowex CEO
Our conversation with GOW management, and GCR investigation
http://www.nycedc.com/press-release/mayor-bloomberg-announces-new-initiatives-expandwireless-and-broadband-connectivity and GCR investigation
Our conversation with GOW management
Our conversation with Towerstream
GCR investigation
Various Gowex press releases, filings, and statements. Engineering revenue estimates from
JBCapital, but are consistent with GOW has told others.
http://www.gowex.com/en/wifi-cities/gowex-wifi-municipal/
Page 91 of 93

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Conversation with Esme Vos founder of MuniWireless

Boingo filings, and website. GOW hotspot map, articles, alexa, appannie, etc.
JBCapitalMarkets GOW Initiation report February 2014
Boingo.com for advertisers (publicly available)
Source: http://www.gowex.com/en/wifi-cities/gowex-media/
GCR Investigation findings
Wiloc.com
Alexa.com
Gowex website, the media section. Gowex App.

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

GCR investigation findings
iPass filings
http://www.wballiance.com/membership/membership-profiles/
iPass February 12, 2014 investor presentation
http://www.gowex.com/en/wifi-cities/gowex-roaming/
http://www.boingo.com/business-services/#s3980
http://www.boingo.com/business-services/roaming-carrier-offload/

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
GOW, Boingo, and iPass filings

GCR Investigation
GOW, Boingo, GOGO, Towerstream, and iPass filings
http://www.financialexecutives.org/ferf/download/2012%20Final/2012-016.pdf
http://ww2.cfo.com/accounting-tax/2011/06/little-change-in-audit-fees/
GOW investor website
http://www.alter-eu.org/sites/default/files/documents/Dodgy-data.pdf
http://www.altereu.org/sites/default/files/documents/Transparency%20Register%20remains%20opaque%20and
%20poorly%20scrutinised_FULL%20ARTICLE.pdf
https://opencorporates.com/companies/lu/B90934
http://twitter.com/jero_net/status/463903528021274624
http://twitter.com/jero_net/status/478848147939426304
No listed New York office http://www.gowex.com/en/about-gowex/headquarters/
Page 92 of 93
13. Advanced refractive PR http://globenewswire.com/newsrelease/2006/07/24/346094/102605/en/Advanced-Refractive-Technologies-AnnouncesNomination-of-Two-Directors.html#sthash.uQPrV92c.dpuf

14. Gowex Offering Circular
1. Arqiva snaps up UK public WiFi hotspot operator Spectrum for 23m
http://thenextweb.com/uk/2012/07/02/arqiva-snaps-up-uk-public-wifi-hotspot-operatorspectrum-for-23m/
Page 93 of 93

Let's Gowex: La Charada Pescanova (A Pescanovan Charade)

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GOTHAM CITY RESEARCH LLC

GOTHAM CITY RESEARCH LLC

Price Target: 0.00 per share

The company [Iberx/Gowex] made a large

In 2003, the Company

Does this make

GOTHAM CITY RESEARCH LLC

Gowex shares are worth 0.00 per share.

Gowexs actual Wireless revenues are at most 10% of what

Company: Lets Gowex

Over 90% of Gowexs Reported Revenues are Suspect

Audit Fee as a % of Revenues

Gowex Telecom & a History of Material Misrepresentations

In fact, http://iber-x.net/ , http://iber-x.com/ , http://www.iber-x.es/ do not work at all. According to

Related Party Customers

Gowexs largest customer

Javier Gonzalez Martin is tied to PJ Gris Inversiones9:

Further Reason to Doubt the Economic Substance of Gowexs Seasuntel Revenues

Related Party Customers

Please see the Appendix A for more information. In it we:

Gowex Revenue by Reported Segments

Telefonica is not paying Gowex.

Hotspots: GOW says 100K, Analyst says 35K, We say 5K

How many hotspots did Gowex have in 2013?

Gowex Hotspots the True Count

JB Capital Analyst Estimates 35,000 hotspots, 7x Actual hotspot count

Gowex Hotspots by Location Type

42% of the 5,526 Gowex hotspots are in New York alone.

Reviews for the Gowex App and Hotspots are Poor

One of the three 5-star rated reviews appears to be fake

June 24, 2014 - http://china.gowex.com/

Is China Gowex Fake? China.Gowex.cn domain is for sale

Gowexs Recent Cisco Announcement

2013 Engineering Revenue < 3 million

In this section, we specifically delve deeply into the Engineering sub-segment2:

Implied Average Revenue Engineering Revenue per Contract Too High

Actual Contract-based Derivations Show Gowexs Engineering Revenues <3mm

Engineering Contracts for "Success Story" Cities

2013 Advertising Revenue no more than 2 million

Using Boingos operating metrics, we calculate Gowexs advertising revenue in 2013 to be no

Gowexs Advertising Revenues No More than 2 million Based on Boingo Metrics

Boingo generates 33 million+ ad engagements at airports per year:

Boingo generates ~60 million ad engagements, in total, per year:

Boingo's Ad Engagements / Year

Boingo's Hotspot Ad Engagement Metrics

Annual Ad Engagements - Non-Airport

We only see Ads, once we scrolled down:

Gowexs Web Presence and Reach are Very Low

See Appendix F for:

Similarweb.com traffic rankings showing similar results

Geolocalized Coupons seem Doubtful

Zoomed in from the Gowex Media section:

The Nintendo Success Story

2013 Roaming and Offloading Revenue < 1 million

According to iPass Metrics, Gowex Roaming + Offloading Revenue <1 million

iPass Open Mobile Exchange Revenue

Gowex Roaming Revenue, as Implied by iPass Metrics

Gowex 2013 Roaming + Offloading

Boingo does not list Gowex as a roaming and offload partner9: