Ann: Freeway Overpass Market Update, page-15

@Martin Gifford

There obviously making that point so investors don't get there expectations up regarding the amount of revenue in the short term.

Just think of it as a new cable TV company entering the market for the first time.

There are costs of doing so, finding customers, purchasing the hardware, installing it all etc etc. Each new customer costs you money at the front end, over time the gross profit each month from there subscriptions slowly turns that customer from a negative cash-flow one into a positive cash-flow producer.

In Syntonic's case the upfront outlay is much less and they are not guaranteed subscriptions each month, but if they've priced the product correctly, then each purchase made by the user will reduce those negative cash-flow numbers and in time turn them into positive ones.

As an Example

If it costs $1.50 to acquire a user and on average they make $0.20 on each day purchase they make, then it's not until purchase number 8 that the user turns from cash-flow negative to cash flow positive. For each purchase they make after that, that cash-flow help cover the cost of a new user joining the service.

That how a new business rolls out its service and grows, it needs to feed any revenue generated back into the loop to help keep the total outlay down.

LOTM