Ann: Quarterly Activities and Cashflow Report, page-27

"the cost of services expenses related to revenue sharing with mobile carriers, content providers, and ad agencies for services delivered by the Syntonic’s Revenue Generation Platform" is more like cost of sale expense, with more sale/revenue this will typically increase inline with revenue increase. And Syntonic have no feasible way to reduce that part of expense if they want to have continue revenue increases. However the other part of expenses which is the operating expense they quoted, for examples research expenses and wages, they can control to a certain level. To control these expenses are important to reach cash flow netural/positive as these are the controllable part of cost throughout the company's operations.