PAO Group Inc (PAOG): Sylvrewynde, with your Expenses comparis...

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Re: Sylvrewynde post# 4234

Monday, 03/10/2008 6:34:59 PM

Monday, March 10, 2008 6:34:59 PM

Sylvrewynde, with your Expenses comparison...

I respect your thoughts and I really do appreciate them. Heck, and I also loved the comparison of WMG at $5.25 per share trading on the NYSE to ADCS at .001 per share trading on the pinks.

We might have to agree to disagree on how you compare WMG’s Expenses though to my “speculative” amount I used for ADCS’s Expenses. Take a look at the Expenses filed from WMG’s last 10K and ask your self if you really think that ADCS will encounter such Expenses.

Now before you read them, know that I don’t know enough about WMG and their Expenses to debate them. My point was that to me it’s not realistic to think that ADCS will encounter some of the Expenses that exist below when you mentioned WMG show Expenses of over 95%. Please observe them below in the last WMG 10K with the link to verify the WMG Expenses:

http://knobias.10kwizard.com/filing.php?repo=tenk&ipage=5309930&doc=1&total=&back=2&g=&attach=on
WMG Expense ** $29 million in compensation expense, consisting of a $10 million one-time bonus to employees related to the Company’s initial public offering and $19 million of one-time payments to holders of the Company’s restricted stock and stock options, primarily to compensate them for certain amounts related to stock awards issued at prices that were below fair value at the grant date…

WMG Expense ** $24 million of expense related to the departure of the co-chairman of The Atlantic Records Group and the expensing of certain amounts paid in connection with the acquisition of Lava Records…

WMG Expense ** $6 million of management fees incurred related to the terminated Management Agreement described below. …

WMG Expense ** Excluding these items, general and administrative costs decreased by $29 million, which includes a decrease in depreciation expense of $9 million.

WMG Expense ** A severance payment of $8 million related to the departure of the chairman of WMG in February 2006 and an increase in bad debt expense of $10 million related to the bankruptcies of large music retailers in the current year.

WMG Expense ** The remaining $38 million decrease was due in part to the Lava Records restructuring in the prior year, which resulted in decreased headcount, along with a continued focus on cost management and cost reduction, a decrease in professional fees and a decrease in stock-based compensation of $9 million.

WMG Expense ** Excluding the impact of foreign currency exchange rates and excluding $4 million of selling and marketing costs related to our sheet music business,WMG, sold in May 2005, for the twelve months ended September 30, 2005, selling and marketing costs increased by $33 million due to increased marketing for a larger number of releases selling in excess of one million units and timing of our release schedule.

v/r
Sterling

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