##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 20-F
 (Mark One)o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934ORx
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2010ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from  toORo
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report
 Commission file number: 0001-33800
 SEARCHMEDIA HOLDINGS LIMITED
 (Exact name of Registrant as specified in its charter)
 Cayman Islands
(Jurisdiction of incorporation or organization)
 
 (Address of principal executive offices)
 
 
 (Name, Telephone, E-mail and/or Facsimile number and Address of the Company Contact Person)
 
  Title of each class
    
    Name of each exchange on which registeredOrdinary Shares, $0.0001 Par Value
    
    NYSE AmexWarrants
    
    NYSE Amex
   (Title of Class)
   (Title of Class)




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##### Table of Contents



20,889,897 Ordinary Shares
  o þ
  o þ
   þ o
  o þ
  Large Accelerated Filer   o
    
    Accelerated Filer   o
    
    Non-Accelerated Filer   þ
  þ
 o
 o
  o
 o
  o þ
 (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS.)
  o o




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##### 



TABLE OF CONTENTS
 PageNOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    
    1PART I
    
    
    
    
    5Item 1
    
    Identity of Directors, Senior Management and Advisers
    
    
    5Item 2
    
    Offer Statistics and Expected Timetable
    
    
    5Item 3
    
    Key Information
    
    
    5Item 4
    
    Information on the Company
    
    
    24Item 4A
    
    Unresolved Staff Comments
    
    
    41Item 5
    
    Operating and Financial Review and Prospects
    
    
    41Item 6
    
    Directors, Senior Management and Employees
    
    
    56Item 7
    
    Major Shareholders and Related Party Transactions
    
    
    62Item 8
    
    Financial Information
    
    
    65Item 9
    
    The Offer and Listing
    
    
    67Item 10
    
    Additional Information
    
    
    69Item 11
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    75Item 12
    
    Description of Securities Other than Equity Securities
    
    
    75PART II
    
    
    
    
    75Item 13
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    75Item 14
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    75Item 15
    
    Controls and Procedures
    
    
    75Item 16A
    
    Audit Committee Financial Expert
    
    
    78Item 16B
    
    Code of Ethics
    
    
    78Item 16C
    
    Principal Accountant Fees and Services
    
    
    78Item 16D
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    79Item 16E
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    79Item 16F
    
    Change in Registrants Certifying Accountant
    
    
    79Item 16G
    
    Corporate Governance
    
    
    79PART III
    
    
    
    
    79Item 17
    
    Financial Statements
    
    
    79Item 18
    
    Financial Statements
    
    
    80Item 19
    
    Exhibits
    
    
    80EX-8.1EX-12.1EX-12.2EX-13.1EX-13.2




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##### Table of Contents



This Annual Report on Form 20-F contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 (PSLRA), Section 27A of the Securities Act
of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934,
as amended, (the Exchange Act), about our expectations, beliefs, or intentions regarding our
business, financial condition, results of operations, strategies, or prospects. You can identify
forward-looking statements by the fact that these statements do not relate strictly to historical
or current matters. Rather, forward-looking statements relate to anticipated or expected events,
activities, trends, or results as of the date they are made. Because forward-looking statements
relate to matters that have not yet occurred, these statements are inherently subject to risks and
uncertainties that could cause our actual results to differ materially from any future results
expressed or implied by the forward-looking statements. Many factors could cause our actual
activities or results to differ materially from the activities and results anticipated in
forward-looking statements. These factors include those contained in Part I, Item 3 Key
Information  D. Risk Factors of this Annual Report on Form 20-F . We do not undertake any
obligation to update forward-looking statements. We intend that all forward-looking statements be
subject to the safe harbor provisions of PSLRA. These forward-looking statements are only
predictions and reflect our views as of the date they are made with respect to future events and
financial performance.
 
    
    There is substantial doubt as to our ability to continue as a going concern, which
could adversely affect our ability to meet our ongoing financing needs as well as to
obtain third party financing.
    
    We may not have sufficient liquidity to pay earn-out payments when they come due,
which could materially and adversely affect our operations.
    
    We have a history of significant operating losses and our future revenue and
operating profitability are uncertain.
    
    We have identified material weaknesses in our internal control over financial
reporting and we have had to restate our historical financial statements.
    
    We are subject to ongoing securities litigation and a government inquiry in the
United States.
    
    Deterioration of economic conditions and a resulting decrease in demand for
advertising services would materially and adversely affect our financial condition and
results of operations and limit our growth prospects.
    
    A business strategy of making acquisitions subjects us to all of the risks inherent
in identifying, acquiring and operating newly acquired businesses.
    
    Failure to manage our growth could strain our management, operational and other
resources, which could materially and adversely affect our business and growth
potential.
    
    Future charges due to possible impairments of acquired assets may have a material
adverse effect on our financial condition and results of operations.
    
    We face significant competition for advertising spending from operators of new and
traditional advertising networks. If we cannot successfully compete, our results of
operations would be materially and adversely affected.
    
    We have a limited operating history which may make it difficult for you to evaluate
our business and prospects.
    
    If we fail to develop and maintain relationships with site owners, managers and
sublessors that provide us access to desirable locations and network platforms, our
growth potential and our business could be harmed.
 1




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
    
    Failures to obtain site owners consents or objections from site owners to the
installations of our media products could lead to termination of our contracts or
installations, which would harm our results of operations.
    
    If we are unable to obtain or retain desirable placement locations for our
advertising poster frames and outdoor billboards on commercially advantageous terms,
our operating margins and earnings could decrease and our results of operations could
be materially and adversely affected.
    
    The shareholders of Jingli Shanghai may have potential conflicts of interest with
us.
    
    Our business depends substantially on the continuing efforts of our senior
executives, and our business may be severely disrupted if we lose their services.
    
    If we are unable to adapt to changing advertising trends of advertisers and
consumers, we will not be able to compete effectively and we will be unable to increase
or maintain our revenues, which may materially and adversely affect our business
prospects and revenues.
    
    Our growth could suffer if we fail to expand our media networks to include new media
offerings, media platforms or enter into new markets.
    
    If site managers or owners shut down our displays for site maintenance or other
reasons, our business could be adversely affected.
    
    Unauthorized use of our intellectual property by third parties, and the expenses
incurred in protecting our intellectual property rights, may adversely affect our
business.
    
    We rely on computer software and hardware systems in managing our operations; any
failure in these systems could adversely affect our business, financial condition and
results of operations.
    
    We have no business liability, disruption or litigation insurance, and we could
incur substantial costs if our business is disrupted due to natural disasters,
litigation or other business interruptions.
    
    Our operating results are difficult to predict and may fluctuate from period to
period.
    
    If the PRC government determines that the contractual arrangements that establish
the structure for operating our China business do not comply with applicable PRC laws
and regulations, we could be subject to severe penalties.
    
    We rely on contractual arrangements with Jingli Shanghai and its shareholders for
our China operations, which may not be as effective in providing operational control as
would be the case through ownership of a controlling equity interest in such operating
entities.
    
    Adverse changes in economic and political policies of the PRC government could have
a material adverse effect on the overall economic growth of China, which could
adversely affect our business.
    
    If advertising registration certificates are not obtained for advertisements on our
outdoor billboard or rapid transit networks, we may be subject to fines.
    
    Our outdoor billboards, light boxes and neon signs are subject to municipal zoning
requirements, governmental approvals and administrative controls. If we are required to
tear down our billboards, light boxes or neon signs as a result of these requirements,
approvals or controls, our operations could be materially and adversely affected.
    
    If we were deemed a resident enterprise by PRC tax authorities, we could be
subject to tax on our global income and our non-PRC shareholders could be subject to
certain PRC taxes.
 2




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
    
    Uncertainties with respect to the PRC legal system could adversely affect us.
    
    We may be subject to, and may expend significant resources in defending against,
government actions and civil suits based on the content and services we provide through
our network.
    
    Governmental control of currency conversion may materially and adversely affect the
value of your investment. Substantial limitations may be imposed on the removal of
funds from the PRC to the Company, or the infusion of funds by us to our subsidiaries
and affiliates located in the PRC.
    
    PRC regulation of loans and direct investment by offshore holding companies to PRC
entities may prevent us from making loans or capital contributions to our PRC operating
subsidiaries and affiliated entities.
    
    Fluctuation in the value of the Renminbi may have a material adverse effect on your
investment.
    
    Any health epidemics and other outbreaks, or war, acts of terrorism and other man
-made or natural disasters could severely disrupt our business operations.
    
    We are a Cayman Islands company and, because the rights of shareholders under Cayman
Islands law differ from those under U.S. law, you may have fewer protections as a
shareholder.
    
    In the future, our Board of Directors may be subject to potential deadlock.
    
    As a foreign private issuer, we will be exempt from certain SEC requirements that
provide stockholders with protections and information that must be made available to
stockholders of U.S. public companies.
    
    Because we do not intend to pay dividends on our ordinary shares for the foreseeable
future, stockholders will benefit from an investment in our ordinary shares only if
those shares appreciate in value.
    
    Voting control by executive officers, directors and other affiliates of the company
may limit your ability to influence the outcome of director elections and other matters
requiring shareholder approval.
    
    The NYSE Amex may delist our securities from quotation on its exchange, which could
limit investors ability to make transactions in our securities and subject us to
additional trading restrictions.
    
    A significant number of shares are eligible for future sale by our stockholders and
the sale of those shares could adversely affect the stock price.
    
    There is a risk that we could be treated as a U.S. domestic corporation for U.S.
federal income tax purposes after the Business Combination, which could result in
significantly greater U.S. federal income tax liability to us.
    
    There is a risk that we will be classified as a passive foreign investment company,
or PFIC, which could result in adverse U.S. federal income tax consequences to U.S.
holders of ordinary shares or warrants of SearchMedia.
    
    If you acquire (directly, indirectly, or constructively) 10% or more of our shares,
you may be subject to taxation under the controlled foreign corporation, or CFC
rules.
    
    We may choose to redeem our outstanding warrants at a time that is disadvantageous
to the warrant holders, preventing such holders from realizing the potential economic
value of their warrants.
 3




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
    
    Our warrant holders may not be able to exercise their warrants, which may
significantly reduce their economic value and create liability for us.
  4




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PART I
 
 Item 1
    
    Identity of Directors, Senior Management and Advisers
  
 Item 2
    
    Offer Statistics and Expected Timetable
  
 Item 3
    
    Key Information
 A.
    
    Selected Financial Data
     5




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For the Years Ended December 312008
    
    
    2009
    
    
    2010(Amounts in thousands, except share data)Selected consolidated statement of operations dataNet revenues
    
    $
    41,685
    
    
    $
    37,741
    
    
    $
    48,967Cost of revenues
    
    
    (30,624
    )
    
    
    (28,059
    )
    
    
    (36,454
    )Gross profit
    
    
    11,061
    
    
    
    9,682
    
    
    
    12,513Operating expenses:Sales and marketing
    
    
    (6,117
    )
    
    
    (3,384
    )
    
    
    (4,462
    )General and administrative
    
    
    (13,135
    )
    
    
    (13,832
    )
    
    
    (12,203
    )Loss from operations
    
    
    (8,191
    )
    
    
    (7,534
    )
    
    
    (4,152
    )Other income/(expense)Interest income
    
    
    131
    
    
    
    11
    
    
    
    24Interest expense
    
    
    (2,717
    )
    
    
    (1,962
    )
    
    
    (45
    )Decrease in fair value of liability warrant
    
    
    
    
    
    
    824
    
    
    
    Gain/(loss) on extinguishment of notes
    
    
    (4,400
    )
    
    
    6,669
    
    
    
    Loss on impairment of goodwill and intangible
assets
    
    
    (13,953
    )
    
    
    (15,749
    )
    
    
    (39,411
    )Loss on abandonment of lease
    
    
    (46
    )
    
    
    (550
    )
    
    
    (1,256
    )Loss on impairment of fixed assets
    
    
    (2,135
    )
    
    
    
    
    
    
    Loss on disposal of fixed assets
    
    
    (2,121
    )
    
    
    (15
    )
    
    
    (4
    )Other income/ (expense), net
    
    
    
    
    
    
    
    
    
    
    (368
    )Foreign currency transaction loss, net
    
    
    (167
    )
    
    
    (24
    )
    
    
    (7
    )Total other expense
    
    
    (25,408
    )
    
    
    (10,796
    )
    
    
    (41,067
    )Loss before income taxes
    
    
    (33,599
    )
    
    
    (18,330
    )
    
    
    (45,219
    )Provision for income taxes
    
    
    (1,481
    )
    
    
    (4,319
    )
    
    
    (1,420
    )Net loss
    
    $
    (35,080
    )
    
    $
    (22,649
    )
    
    $
    (46,639
    )Net loss from operations per share:Basic and diluted
    
    $
    (0.0162
    )
    
    $
    (0.0044
    )
    
    $
    (0.0022
    )Weighted average number of shares outstanding 
Basic and diluted
    
    
    2,169,269
    
    
    
    5,100,465
    
    
    
    20,796,789
 As of December 31,2009
    
    
    2010(In thousands)Selected consolidated balance sheet dataCash and cash equivalents
    
    $
    29,398
    
    
    $
    7,554Accounts receivable, net
    
    
    12,996
    
    
    
    18,065Goodwill
    
    
    45,891
    
    
    
    45,955Total assets
    
    
    99,765
    
    
    
    86,871Acquisition consideration payable
    
    
    16,381
    
    
    
    39,195Total liabilities
    
    
    51,365
    
    
    
    86,408Net assets
    
    
    48,400
    
    
    
    463Total equity
    
    
    48,400
    
    
    
    463
 B.
    
    Capitalization and Indebtedness
  C.
    
    Reasons for the Offer and Use of Proceeds
  D.
    
    Risk Factors
 Risk Related to Our Business and Operations
 There is substantial doubt as to our ability to continue as a going concern, which could adversely
affect our ability to meet our ongoing financing needs as well as to obtain third party financing.
  6




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We may not have sufficient liquidity to pay earn-out payments when they come due, which could
materially and adversely affect our operations.
   We have a history of significant operating losses and our future revenue and operating
profitability are uncertain.
  We have identified material weaknesses in our internal control over financial reporting and we have
had to restate our historical financial statements.
   7




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We are subject to ongoing securities litigation and a government inquiry in the United States.
    Deterioration of economic conditions and a resulting decrease in demand for advertising services
would materially and adversely affect our financial condition and results of operations and limit
our growth prospects.
  8




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A business strategy of making acquisitions subjects us to all of the risks inherent in identifying,
acquiring and operating newly acquired businesses.
  
    
    the potential disruption of our existing businesses, including the diversion of
management attention and the redeployment of resources;
    
    entering new markets or industries in which we have limited prior experience;
    
    failure to identify in due diligence key issues specific to the businesses we seek
to acquire or the industries or other environments in which they operate, or, failure
to protect against contingent liabilities arising from those issues;
    
    unforeseen or hidden liabilities;
    
    difficulties in integrating, aligning and coordinating organizations which will
likely be geographically separated and may involve diverse business operations and
corporate cultures;
    
    difficulties in integrating and retaining key management, sales, research and
development, production and other personnel;
    
    potential loss of key employees, clients or distribution partners of the acquired
businesses;
    
    difficulties in incorporating the acquired business into our organization;
    
    the potential loss of customers, distributors or suppliers;
    
    adverse effects on our existing business relationships with our advertisers;
    
    difficulties in integrating or expanding information technology systems and other
business processes to accommodate the acquired businesses;
    
    risks associated with integrating financial reporting and internal control systems;
    
    the potential for future impairments of goodwill if the acquired business does not
perform as expected;
    
    the inability to obtain necessary government approvals for the acquisition, if any;
and
    
    successfully operating the acquired business.
  9




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Failure to manage our growth could strain our management, operational and other resources, which
could materially and adversely affect our business and growth potential.
  Future charges due to possible impairments of acquired assets may have a material adverse effect on
our financial condition and results of operations.
  We face significant competition for advertising spending from operators of new and traditional
advertising networks. If we cannot successfully compete, our results of operations would be
materially and adversely affected.
    We have a limited operating history which may make it difficult for you to evaluate our business
and prospects.
  10




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##### Table of Contents



If we fail to develop and maintain relationships with site owners, managers and sublessors that
provide us access to desirable locations and network platforms, our growth potential and our
business could be harmed.
  Failures to obtain site owners consents or objections from site owners to the installations of our
media products could lead to termination of our contracts or installations, which would harm our
results of operations.
  If we are unable to obtain or retain desirable placement locations for our advertising poster
frames and outdoor billboards on commercially advantageous terms, our operating margins and
earnings could decrease and our results of operations could be materially and adversely affected.
  The shareholders of Jingli Shanghai may have potential conflicts of interest with us.
  11




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##### Table of Contents



Our business depends substantially on the continuing efforts of our senior executives, and our
business may be severely disrupted if we lose their services.
   If we are unable to adapt to changing advertising trends of advertisers and consumers, we will not
be able to compete effectively and we will be unable to increase or maintain our revenues, which
may materially and adversely affect our business prospects and revenues.
  Our growth could suffer if we fail to expand our media networks to include new media offerings,
media platforms or enter into new markets.
  If site managers or owners shut down our displays for site maintenance or other reasons, our
business could be adversely affected.
  12




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##### Table of Contents



Unauthorized use of our intellectual property by third parties, and the expenses incurred in
protecting our intellectual property rights, may adversely affect our business.
    We rely on computer software and hardware systems in managing our operations; any failure in these
systems could adversely affect our business, financial condition and results of operations.
  We have no business liability, disruption or litigation insurance, and we could incur substantial
costs if our business is disrupted due to natural disasters, litigation or other business
interruptions.
  13




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Our operating results are difficult to predict and may fluctuate from period to period.
  
    
    our ability to maintain and increase sales to existing advertising clients, attract
new advertising clients and satisfy our clients demands;
    
    the frequency of our clients advertisements on our network;
    
    remaining competitive with the pricing strategies of our competitors;
    
    effects of strategic alliances, potential acquisitions and other business
combinations, and our ability to successfully and timely integrate alliances or
acquired businesses into our business;
    
    changes in government regulations in relation to the advertising industry;
    
    lower advertising spending immediately following a major holiday season in China;
and
    
    economic and geopolitical conditions in China and elsewhere.
  Risks Relating to Doing Business in the Peoples Republic of China
 If the PRC government determines that the contractual arrangements that establish the structure for
operating our China business do not comply with applicable PRC laws and regulations, we could be
subject to severe penalties.
  14




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
    
    revoking the business and operating licenses of Jingli Shanghai or our PRC
subsidiary and other affiliated entities, if any;
    
    discontinuing or restricting the operations of any transactions among our PRC
subsidiary, Jingli Shanghai and its shareholders;
    
    imposing fines, confiscating the income of Jingli Shanghai or our income, or
imposing other requirements with which we or our PRC subsidiary and affiliated entities
may not be able to comply;
    
    requiring us or our PRC subsidiary and affiliated entities to restructure our
ownership structure or operations; or
    
    restricting or prohibiting our use of the proceeds of the Business Combination to
finance our business and operations in China.
  We rely on contractual arrangements with Jingli Shanghai and its shareholders for our China
operations, which may not be as effective in providing operational control as would be the case
through ownership of a controlling equity interest in such operating entities.
  15




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Adverse changes in economic and political policies of the PRC government could have a material
adverse effect on the overall economic growth of China, which could adversely affect our business.
  If advertising registration certificates are not obtained for advertisements on our outdoor
billboard or rapid transit networks, we may be subject to fines.
   16




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Our outdoor billboards, light boxes and neon signs are subject to municipal zoning requirements,
governmental approvals and administrative controls. If we are required to tear down our billboards,
light boxes or neon signs as a result of these requirements, approvals or controls, our operations
could be materially and adversely affected.
  If we were deemed a resident enterprise by PRC tax authorities, we could be subject to tax on our
global income and our non-PRC shareholders could be subject to certain PRC taxes.
   Uncertainties with respect to the PRC legal system could adversely affect us.
   17




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##### Table of Contents



We may be subject to, and may expend significant resources in defending against, government actions
and civil suits based on the content and services we provide through our network.
     Governmental control of currency conversion may materially and adversely affect the value of your
investment. Substantial limitations may be imposed on the removal of funds from the PRC to the
Company, or the infusion of funds by us to our subsidiaries and affiliates located in the PRC.
   18




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PRC regulation of loans and direct investment by offshore holding companies to PRC entities may
prevent us from making loans or capital contributions to our PRC operating subsidiaries and
affiliated entities.
  
    
    loans by us to our wholly-owned subsidiaries in China, each of which is a
foreign-invested enterprise, to finance the activities cannot exceed statutory limits
and must be registered with SAFE, or its local counterpart; and
 
    
    loans by us to Jingli Shanghai, which is a domestic PRC entity, may require the
approval from the relevant government authorities or registration with SAFE or its
local counterpart.
  19




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Fluctuation in the value of the Renminbi may have a material adverse effect on your investment.
   Any health epidemics and other outbreaks, or war, acts of terrorism and other man -made or natural
disasters could severely disrupt our business operations.
   We are a Cayman Islands company and, because the rights of shareholders under Cayman Islands law
differ from those under U.S. law, you may have fewer protections as a shareholder.
  20




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In the future, our Board of Directors may be subject to potential deadlock.
  As a foreign private issuer, we will be exempt from certain SEC requirements that provide
stockholders with protections and information that must be made available to stockholders of U.S.
public companies.
  
    
    the rules requiring the filing with the SEC of quarterly reports on Form 6-K or
current reports on Form 6-K;
    
    the sections of the Exchange Act regulating the solicitation of proxies, consents or
authorizations with respect to a security registered under the Exchange Act;
    
    provisions of Regulation FD aimed at preventing issuers from making selective
disclosures of material non-public information; and
    
    the sections of the Exchange Act requiring insiders to file public reports of their
stock ownership and trading activities and establishing insider liability for profits
realized from any short swing trading transactions, or a purchase and sale, or a sale
and purchase, of the issuers equity securities within less than six months.
  Because we do not intend to pay dividends on our ordinary shares for the foreseeable future,
stockholders will benefit from an investment in our ordinary shares only if those shares appreciate
in value.
  21




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Voting control by executive officers, directors and other affiliates of the company may limit your
ability to influence the outcome of director elections and other matters requiring shareholder
approval.
  The NYSE Amex may delist our securities from quotation on its exchange, which could limit
investors ability to make transactions in our securities and subject us to additional trading
restrictions.
  
    
    a limited availability of market quotations for our securities;
    
    a reduced liquidity with respect to our securities;
    
    a determination that our common stock is a penny stock which will require brokers
trading in our common stock to adhere to more stringent rules, possibly resulting in a
reduced level of trading activity in the secondary trading market for our common stock;
    
    a limited amount of news and analyst coverage for the company; and
    
    a decreased ability to issue additional securities or obtain additional financing in
the future.
 On April 8, 2011, we received notice of noncompliance with Section 704 of the NYSE Amex Company
Guide, which required us to hold our stockholders annual meeting during 2010 for the fiscal year
ended December 31, 2009. The Exchange notified us on May 5, 2011 that it accepted our plan dated
April 6, 2011 and granted us an extension until October 4, 2011 to regain compliance with continued
listing standards. We will be subject to periodic review by Exchange Staff during its extension
period. This Form 20-F is being filed on June 30, 2011 and we expect to hold our annual general
stockholders meeting before the October 4, 2011 deadline. Following the annual general stockholders
meeting, we anticipate that we will be in compliance with Section 704 of the Company Guide.
 A significant number of shares are eligible for future sale by our stockholders and the sale of
those shares could adversely affect the stock price .
  There is a risk that we could be treated as a U.S. domestic corporation for U.S. federal income tax
purposes after the Business Combination, which could result in significantly greater U.S. federal
income tax liability to us.
  22




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##### Table of Contents



There is a risk that we will be classified as a passive foreign investment company, or PFIC, which
could result in adverse U.S. federal income tax consequences to U.S. holders of ordinary shares or
warrants of SearchMedia.
   If you acquire (directly, indirectly, or constructively) 10% or more of our shares, you may be
subject to taxation under the controlled foreign corporation, or CFC rules.
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Risks Relating to Our Stockholders and Warrant holders
 We may choose to redeem our outstanding warrants at a time that is disadvantageous to the warrant
holders, preventing such holders from realizing the potential economic value of their warrants.
  
    
    exercise the warrants and pay the exercise price for such warrants at a time when it
may be disadvantageous for the holders to do so;
    
    sell the warrants at the then-current market price when they might otherwise wish to
hold the warrants; or
    
    accept the nominal redemption price which, at the time the warrants are called for
redemption, is likely to be substantially less than the market value of the warrants.
 Our warrant holders may not be able to exercise their warrants, which may significantly reduce
their economic value and create liability for us.
  
    
    a current registration statement under the Securities Act
relating to the ordinary shares underlying the warrants is then effective; and
    
    such shares are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of warrants reside.
   
 Item 4
    
    Information on the Company
 A.
    
    History and Development of the Company
 History and Development
 
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##### Table of Contents



B.
    
    Business Overview
 Business Overview
   
    
    Outdoor billboard platform. As of December 31, 2010, we operate a network of about
1,000 high-impact billboards in 15 cities, including Beijing, Hong Kong, Qingdao,
Shanghai, Shenyang, Hangzhou, Shenzhen, Guangzhou, Chongqing and Chengdu. Our
billboards are mostly large format billboards deployed in commercial centers and other
desirable areas with heavy vehicle or foot traffic.
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##### Table of Contents




    
    In-elevator platform. As of December 31, 2010, our network of about 150,000 printed
and digital poster frames delivered targeted advertising messages inside elevators to
captive audiences in
high-rise residential and office buildings in 70 major cities in China. The
in-elevator platform is characterized by its low cost structure and minimal capital
requirements and targets the affluent urban population that is highly desired by
advertisers.
    
    Transit advertising platform. As of December 31, 2010, we act as an agency for a
subway network in addition to a bus advertising network of 5,000 buses in Beijing.
   Our Business
  For the years ended December, 312008
    
    
    2009
    
    
    2010(In thousands)In-elevator networks
    
    
    7,405
    
    
    
    7,025
    
    
    
    9,117Outdoor billboards
    
    
    31,932
    
    
    
    28,854
    
    
    
    35,762Transits
    
    
    2,348
    
    
    
    1,862
    
    
    
    4,088Total net revenue
    
    
    41,685
    
    
    
    37,741
    
    
    
    48,967
  Advertising Network
  Media Products
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##### Table of Contents



Outdoor Billboard Platform
   In-Elevator Platform
   
    
    Printed Poster Frames. We specialize in high impact-printed poster frames which are
made of several materials in various sizes suitable for a wide range of display
messages. Our printed poster frames mainly include paper, and illuminated poster
frames;
 
    
    Paper poster framesare conventional poster frames made of paper with a
visual size of 540mm by 390mm; and
 
    
    Illuminated poster framesare posters encased in thin metal boxes and
illuminated by LED optical fiber. The visual size of such posters is typically
540mm by 390mm.
 
    
    Digital poster frames. These poster frames are LCD screens with memory card slots
that allow the screens to change images at regular intervals. Our digital poster frames
change images in loops, with typically six images within each 60-second loop. The
visual size of the screens is typically 405mm by 305mm.
  Subway Advertising Platform
  Bus Advertising Platform
  27




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Advertising Clients
     Relationships with Site Managers and Owners
    Sales
  28




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Competitive Advantages
  Nationwide coverage and leading market share.
 Extensive advertising network across multiple media platforms
 Scalable revenue model.
 Strong management team.
 Competition
  29




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
    
    Outdoor billboard platform. As the outdoor billboard market in China is largely
fragmented with no clear nationwide leader, we compete primarily with other local or
regional outdoor billboard owners and operators. We also compete with operators of
other forms of outdoor media, including digital outdoor displays and street furniture
advertising.
    
    In-elevator platform. We compete primarily with other nationwide operators of
in-elevator poster frame advertising. We may face competition in individual cities from
local and regional players and new entrants into the local and regional market from
time to time.
    
    Transit platform. We compete with other operators of subway light box and bus-body
advertising.
   Intellectual Property
   Regulatory Matters
   Restrictions on Foreign Ownership in the Advertising Industry
  
    
    The Catalogue for Guiding Foreign Investment in Industry (2007);
    
    The Administrative Regulations on Foreign-invested Advertising Enterprises (2004),
as amended in 2008; and
    
    The Notice Regarding Investment in the Advertising Industry by Foreign Investors
Through Equity Acquisitions (2006).
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Regulation of Advertising Services
  
    
    PRC Advertising Law (1994);
    
    The Advertising Administrative Regulations (1987); and
    
    The Implementing Rules for the Advertising Administrative Regulations (2004).
 Business License for Advertising Companies
  Advertising Content
  31




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Outdoor Advertising
  
    
    utilize traffic safety facilities or traffic signs;
    
    impede the use of public facilities, traffic safety facilities or traffic signs;
    
    obstruct commercial or public activities or create an eyesore in urban areas;
    
    be placed in restrictive areas near government offices, cultural landmarks or
historical or scenic sites; or
    
    be placed in areas prohibited by the local governments from having outdoor
advertisements.
    Regulations on Dividend Distribution
  
    
    The Company Law of the PRC (1993), as amended in 2005;
 32




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
    
    Wholly Foreign-Owned Enterprise Law (1986), as amended in 2000; and
    
    Wholly Foreign-Owned Enterprise Law Implementing Rules (1990), as amended in 2001.
  Regulations on Trademarks
   
    
    use of a trademark that is identical with or similar to a registered trademark in
respect of the same or similar commodities without the authorization of the trademark
registrant;
    
    sale of commodities infringing upon the exclusive right to use the trademark;
    
    counterfeiting or making, without authorization, representations of a registered
trademark of another person, or sale of such representations of a registered trademark;
    
    changing a registered trademark and selling products on which the altered registered
trademark is used without the consent of the trademark registrant; and
    
    otherwise infringing upon the exclusive right of another person to use a registered
trademark.
  Option 1
 Option 2
 
    
    injunctions;
    
    requiring the infringer to take steps to mitigate the damage (i.e., publish notices
in newspapers); and
    
    damages which are measured by either the gains acquired by the infringer from the
infringement, or the losses suffered by the trademark owner, including expenses
incurred by the trademark owner to claim and litigate such infringement. If it is
difficult to determine the gains acquired by
the infringer from the infringement, or the losses suffered by the trademark owner,
the court may elect to award compensation of not more than RMB500,000.
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##### Table of Contents



Option 3
 SAFE Regulations on Offshore Investment by PRC Residents and Employee Stock Options
   
    
    prior to establishing or assuming control of an offshore company for the purpose of
financing that offshore company with assets or equity interests in an onshore
enterprise in the PRC, each PRC resident, whether a natural or legal person, must
complete the overseas investment foreign exchange registration procedures with the
relevant local SAFE branch;
    
    an amendment to the registration with the local SAFE branch is required to be filed
by any PRC resident that directly or indirectly holds interests in that offshore
company upon either (1) the injection of equity interests or assets of an onshore
enterprise to the offshore company, or (2) the completion of any overseas fund raising
by such offshore company; and
    
    an amendment to the registration with the local SAFE branch is also required to be
filed by such PRC resident when there is any material change involving a change in the
capital of the offshore company, such as (1) an increase or decrease in its capital,
(2) a transfer or swap of shares, (3) a merger or division, (4) a long term equity or
debt investment, or (5) the creation of any security interests over the relevant assets
located in China.
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Regulation on Overseas Listing
   C.
    
    Organizational Structure
  35




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refers to equity control
Ad-Icon Company Limited (HK) (17)
Shanghai Botang Advertising Co. Ltd (4)
Shanghai Haiya Advertising Co. Ltd (5)
Tianjin Shengshitongda Advertising Creativity Co. Ltd (12)
Shanghai Jincheng Advertising Co. Ltd (13)
Shaanxi Xinshichuang Advertising Planning Co. Ltd (14)
Qingdao Kaixiang Advertising Co. Ltd.(10)
Wenzhou Rigao Advertising Co. Ltd (11)
Wuxi Ruizhong Advertising Co. Ltd (7)
Beijing Wanshuizhiyuan Advertising Co. Ltd (6)
Offshore
Onshore
Zhejiang Continental Advertising Co. Ltd (9)
Jieli Network Technology Development (Shanghai)Co. Ltd (2)
Shenyang Jingli Advertising Co. Ltd (8)
SearchMedia Holdings Limited (NYSE AMEX: IDI)
Great Talent
Holdings Ltd. (16)
refers to contractual control
Changsha Jingli Advertising Co. Ltd (15)
SearchMedia International Limited
Shanghai Jingli Advertising
Co. Ltd (3)
Ad-Icon Advertising (Shanghai) Co. Ltd (18)
Jieli Investment Management Consulting (Shanghai)Co. Ltd (1) 36




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(1)
    
    Jieli Investment Management Consulting (Shanghai) Co., Ltd., or Jieli Consulting, a Chinese
limited liability company, 100% owned by SearchMedia International.(2)
    
    Jieli Network Technology Development (Shanghai) Co., Ltd, or Jieli Network, a Chinese limited
liability company, 100% owned by SearchMedia International.(3)
    
    Shanghai Jingli Advertising Co., Ltd, or Jingli Shanghai, a Chinese limited liability
company, 60% owned by Ms. Qinying Liu, a Chinese citizen, and 40% owned by Ms. Le Yang, a
Chinese citizen.(4)
    
    Shanghai Botang Advertising Co., Ltd, or Shanghai Botang, a Chinese limited liability
company, 100% owned by Ad-Icon Shanghai.(5)
    
    Shanghai Haiya Advertising Co., Ltd, or Shanghai Haiya, a Chinese limited liability company,
100% owned by Ad-Icon Shanghai.(6)
    
    Beijing Wanshuizhiyuan Advertising Co., Ltd, or Beijing Wanshuizhiyuan , a Chinese limited
liability company, 100% owned by Ad-Icon Shanghai.(7)
    
    Wuxi Ruizhong Advertising Co., Ltd., or Wuxi Ruizhong, a Chinese limited liability company,
100% owned by Ad-Icon Shanghai.(8)
    
    Shenyang Jingli Advertising Co., Ltd., or Shenyang Jingli, a Chinese limited liability
company, 100% owned by Ad-Icon Shanghai.(9)
    
    Zhejiang Continental Advertising Co, Ltd., or Zhejiang Continental, a Chinese limited
liability company, 100% owned by Ad-Icon Shanghai.(10)
    
    Qingdao Kaixiang Advertising Co., Ltd., or Qingdao Kaixiang, a Chinese limited liability
company, 100% owned by Jingli Shanghai.(11)
    
    Wenzhou Rigao Advertising Co., Ltd., or Wenzhou Rigao, a Chinese limited liability company,
100% owned by Jingli Shanghai.(12)
    
    Tianjin Shengshitongda Advertising Creativity Co., Ltd, or Tianjin Shengshitongda, a Chinese
limited liability company, 100% owned by Jingli Shanghai.(13)
    
    Shanghai Jincheng Advertising Co., Ltd, or Shanghai Jincheng, a Chinese limited liability
company, 100% owned by Jingli Shanghai. [inactive](14)
    
    Shaanxi Xinshichuang Advertising Planning Co., Ltd., or Shaanxi Xinshichuang, a Chinese
limited liability company, 100% owned by Jingli Shanghai. [inactive](15)
    
    Changsha Jingli Advertising Co., Ltd., or Changsha Jingli, a Chinese limited liability
company, 100% owned by Jingli Shanghai. [inactive](16)
    
    Great Talent Holdings Limited, or Great Talent, a company incorporated under the laws of Hong
Kong, 100% owned by SearchMedia International. [inactive](17)
    
    Ad-Icon Company Limited, or Ad-Icon, a company incorporated under the laws of Hong Kong, 100%
owned by SearchMedia International.(18)
    
    Ad-Icon Advertising (Shanghai) Co., Ltd., or Ad-Icon Shanghai, a Chinese limited liability
company, 100% owned by Ad-Icon. 37




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
    
    we are able to exert effective control over our consolidated PRC variable interest
entities;
    
    a substantial portion of the economic benefits of our consolidated PRC variable
interest entities are transferred to us; and
    
    we have an exclusive option to purchase all or part of the equity interests in our
consolidated PRC variable interest entities in each case when, and to the extent,
permitted by PRC law.
 Contractual Arrangements with Jingli Shanghai and its Shareholders
  Agreements That Provide Effective Control over Our Affiliated Entities
 Loan Agreement
 Equity Pledge Agreement
 Exclusive Call Option Agreement
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##### Table of Contents




    
    The shareholders of Jingli Shanghai may not change the articles of association,
bylaws, registered capital or shareholding structure of Jingli Shanghai, without the
prior written consent of Jieli Consulting;
    
    Jingli Shanghai may not acquire or merge with any third parties, or invest in any
third parties, without the prior written consent of Jieli Consulting;
    
    Jingli Shanghai may not generate, delegate, guarantee for, or allow any existing
indebtedness without the prior consent or confirmation of Jieli Consulting, except in
the ordinary courses of business;
    
    Jingli Shanghai may not enter into any material contracts with the contractual price
exceeding RMB1.0 million without the prior written consent of Jieli Consulting, except
in the ordinary courses of business;
    
    Jingli Shanghai may not grant loans or guaranties to any third parties, without the
prior written consent of Jieli Consulting;
    
    Jingli Shanghai may not transfer, pledge, have caused any encumbrances, or otherwise
dispose of any shares of Jingli Shanghai, without the prior written consent of Jieli
Consulting;
    
    Jingli Shanghai may not declare or pay any dividends without the prior written
consent of Jieli Consulting; upon the request of Jieli Consulting, Jingli Shanghai
shall declare and pay all distributable dividends to its shareholders; and
    
    The shareholders of Jingli Shanghai may only appoint the persons nominated by Jieli
Consulting as directors of Jingli Shanghai, upon request of Jieli Consulting.
 Power of Attorney
 Agreements That Transfer Economic Benefits to Jieli Consulting
 Exclusive Technical Consulting and Service Agreement
  39




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
    
    In January 2008, Jingli Shanghai acquired 100% of the equity interest in Shaanxi
Xinshichuang Advertising Planning Co., Ltd., a Chinese company primarily engaged in
elevator advertising business;
    
    In January 2008, Jingli Shanghai acquired 100% of the equity interest in Qingdao
Kaixiang Advertising Co., Ltd., a Chinese company primarily engaged in outdoor
billboard advertising business;
    
    In January 2008, Jingli Shanghai acquired 100% of the equity interest in Shanghai
Jincheng Advertising Co., Ltd., a Chinese company operating advertisings in cafeterias
of office buildings;
    
    In January 2008, Jingli Shanghai acquired 100% of the equity interest in Beijing
Wanshuizhiyuan Advertising Co., Ltd., a Chinese company primarily engaged in outdoor
billboard advertising business;
    
    In January 2008, Jingli Shanghai acquired 100% of the advertising business of
Shenyang Xicheng Advertising Co., Ltd., a Chinese company primarily engaged in outdoor
billboard advertising business. Jingli Shanghai subsequently transferred such business
and related assets into Shenyang Jingli Advertising Co., Ltd., a newly incorporated
Chinese company;
    
    In February 2008, Jingli Shanghai acquired 100% of the equity interest in Shanghai
Haiya Advertising Co., Ltd., a Chinese company operating rapid transit advertising
business;
    
    In April 2008, Jingli Shanghai acquired 100% of the advertising business of Beijing
Youluo Advertising Co., Ltd., a Chinese company primarily engaged in outdoor billboard
advertising business. Jingli Shanghai subsequently transferred such business and
related assets into Shanghai Botang Advertising Co., Ltd., a newly incorporated Chinese
company;
    
    In April 2008, Jingli Shanghai acquired 100% of the equity interest in Tianjin
Shengshitongda Advertising Creativity Co., Ltd., a Chinese company operating elevator
advertising business;
    
    In April 2008, SearchMedia International acquired 100% of the equity interest in
Ad-Icon Company Limited, a Hong Kong company operating outdoor billboard advertising
business;
    
    In July 2008, Jingli Shanghai acquired 100% of the equity interest in Changsha
Jingli Advertising Co., Ltd., a Chinese company operating elevator advertising
business;
    
    In July 2008, Jingli Shanghai acquired 100% of the equity interest in Wenzhou Rigao
Advertising Co., Ltd., a Chinese company operating elevator advertising business;
    
    In July 2008, Jingli Shanghai acquired 100% of the equity interest in Wuxi Ruizhong
Advertising Co., Ltd., a Chinese company operating elevator advertising business; and
    
    In May 2010, Ad-Icon Shanghai acquired 100% of the equity interest in Zhejiang
Continental Advertising Co., Ltd., a Chinese company primarily engaged in the outdoor
billboard advertising business.
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D.
    
    Property, Plant and Equipment
  
 Item 4A
    
    Unresolved Staff Comments
  
 Item 5
    
    Operating and Financial Review and Prospects
 You should read the following discussion in conjunction with our consolidated financial statements
and related notes included in this Annual Report on Form 20-F . This Annual Report on Form 20-F
contains certain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 (PSLRA), Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended, (the
Exchange Act), about our expectations, beliefs, or intentions regarding our business, financial
condition, results of operations, strategies, or prospects. You can identify forward-looking
statements by the fact that these statements do not relate strictly to historical or current
matters. Rather, forward-looking statements relate to anticipated or expected events, activities,
trends, or results as of the date they are made. Because forward-looking statements relate to
matters that have not yet occurred, these statements are inherently subject to risks and
uncertainties that could cause our actual results to differ materially from any future results
expressed or implied by the forward-looking statements. Many factors could cause our actual
activities or results to differ materially from the activities and results anticipated in
forward-looking statements. These factors include those contained in Part I, Item 3.D Key
Information  Risk Factors of this Annual Report on Form 20-F . We do not undertake any obligation
to update forward-looking statements. We intend that all forward-looking statements be subject to
the safe harbor provisions of PSLRA. These forward-looking statements are only predictions and
reflect our views as of the date they are made with respect to future events and financial
performance.
 Overview
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
    
    Outdoor billboard platform. As of December 31, 2010, we operate a network of about
1,000 high-impact billboards with over 600,000 square feet of surface display area in
15 cities, including Beijing, Hong Kong, Qingdao, Shanghai, Shenyang, Shenzhen,
Guangzhou, Hangzhou, Chongqing and Chengdu. Our billboards are mostly deployed in
commercial centers and other desirable areas with heavy vehicle or foot traffic.
    
    In-elevator platform. As of December 31, 2010, our network of about 150,000 printed
and digital poster frames delivered targeted advertising messages inside elevators to
captive audiences in high-rise residential and office buildings in 70 major cities in
China. The in-elevator platform is characterized by its low cost structure and minimal
capital requirements and targets the affluent urban population that is highly desired
by advertisers.
    
    Transit advertising platform. As of December 31, 2010, we are an agency for subway
advertising and a bus advertising network of 5,000 buses in Beijing.
   Industry Trends and Uncertainties
  
    
    Growth of the PRC economy and the advertising industry. The growth of the PRC
economy affects the size and growth rate of the advertising industry in China. As the
advertising industry is typically sensitive to general economic conditions, any
slowdown in the economy, such as the recent worldwide economic downturn, could directly
and adversely affect the overall advertising spending in China by multinational and
domestic advertisers. The amount and timing of collection of advertising fees from
advertisers may also be negatively impacted as a result, which could in turn affect our
liquidity and results of operations.
    
    Advertising spending and budget cycle of advertisers. Advertising spending and
budget cycle of advertisers will affect the amount and timing of demand for our service
offerings. In a contracted economy, the budget size for advertising may be reduced.
Advertisers may have shorter budget cycles, may contract for shorter-term advertising
promotions and may seek a media platform with higher average returns on their
advertising spending.
    
    Advertisers marketing strategy and budget. Our revenues depend on advertising
spending budgeted by our clients for out-of-home advertising, including offerings
through our outdoor billboard, in-elevator displays, street furniture and transit
advertising platforms. The level of acceptance of our platforms by advertisers and the
value of its advertising network relative to its low cost, as perceived by our
advertisers, affect our business growth.
    
    Competition and pricing pressure. The level of competition in the out-of-home
advertising market from existing operators and new market entrants for clients and for
media assets could affect opportunities for growth, influence prices that we could
charge for our advertising services, and affect the leasing cost of advertising space.
We compete for advertising clients generally on the basis of network coverage, service
quality, technology, media offerings, services and brand name.
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
    
    Seasonality and One-Time Events. Although we do not experience significant
seasonality in our business, advertising spending is affected by holidays and one-time
events. Advertising spending
for outdoor media typically decreases during the Chinese New Year, which occurs in
the first calendar quarter of each year, and increases in the last calendar quarter.
    
    Laws regulating advertising in the PRC. A change in PRC law or government practice
regulating the advertising industry in general and our service platforms in particular
could affect our results of operations, in terms of compliance costs and scope of
advertising services offered to clients.
 Company Specific Trends and Uncertainties
  
    
    Ability to maintain market position and expand into new cities. The market for
out-of-home advertising services is relatively new and rapidly evolving, and as a
multi-platform media company with a presence in major cities in China, we compete with
different players across our platforms and cities of operation. For our in-elevator
advertising platform, we compete primarily with other nationwide operators of
in-elevator poster frame advertising. We may face competition in individual cities from
local and regional players and new entrants into the local and regional market from
time to time. For our billboard advertising platform, we compete against mostly local
or regional outdoor billboard owners and operators, as the outdoor billboard market in
China is largely fragmented. For our transit advertising platform, we compete against
other operators of subway light box and bus-body advertising. We also compete for the
advertising budget of advertisers with other operators of out-of-home advertising and
operators of other advertising media including television, radio, newspapers, magazines
and the Internet. Our continued ability to maintain our market position is central to
our ability to attract new clients, expand relationships with site owners and managers
and increase our revenues.
    
    Ability to expand client base and increase the number of advertising contracts and
average revenues per contract. Our ability to expand our client base and increase the
number of advertising contracts and average revenues per contract is a key driver of
our revenue growth. We believe our extensive advertising network across multiple media
platforms allows us to act as a one-stop shop for advertising clients that seek
nationwide distribution of advertising content across multiple advertising channels,
including outdoor billboards, elevators and subway stations.
    
    Ability to sign and extend site leases for lower rentals. Our ability to generate
revenues and increase profitability from advertising sales depends largely on our
ability to provide a large network of our media products across media platforms at
desirable locations on commercially advantageous terms. The effectiveness of our
network also depends on the cooperation of site owners and managers to allow us to
install the desired types of poster frames at the desired spots on their properties
and, for in-elevator advertising to keep the elevators in operation and accessible to
the viewing public. In some cases, we have not maintained good relations and some of
our leases have been terminated or may be terminated in the future.
    
    Ability to integrate acquired companies. We acquired a number of advertising
businesses in 2008 in 2010. We have been in the process of integrating and centralizing
the operational accounting, legal, human resource and administrative functions of the
acquired companies. Due to certain corporate issues and unpaid earnout obligations,
such efforts, to date, have not fully met our expectations which create a substantial
risk that we may not be able to fully realize the anticipated benefits of these
acquisitions. The extent to which we are able to successfully integrate the acquired
companies into our business, in terms of sales and marketing, client service, growth
strategy and corporate culture, will impact our results of operations.
    
    Ability to shorten accounts receivable collection period. As is consistent with the
payment terms and collection practice of the advertising industry in China, the
collection period of our accounts receivable is relatively long, which generally range
from three months to six months or longer from the invoicing date. Relative to direct
advertising clients, the collection period is longer for
accounts receivable from advertising agency clients. We expect such practice to
continue in the foreseeable future. The onset and deepening of the recent global
financial and economic crises could negatively impact the cash flows of our
multinational and local clients and, in turn, the amount and timing of the
collection of accounts receivable from them.
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
    
    Ability to cross-sell. Our ability to increase revenues by effectively leveraging
our multi-platform advertising network will be determined by our ability to integrate
our sales efforts and successfully implementing cross-selling sales initiatives. To
further implement cross-selling initiatives, we plan to employ an integrated sales
approach under which we will coordinate the sales and maintenance teams across
platforms and geographic regions and provide them with the proper incentive structure
to encourage more cohesive and consistent services to our clients and a heightened
awareness of opportunities to cross-sell our media offerings while optimizing
advertising solutions for our clients.
    
    Ability to retain key employees and sales people. Recruiting and retaining a team of
senior executives, key employees and sales team with industry knowledge and experience
is essential to our continued success.
 Critical Accounting Policies and Estimates
   Revenue recognition
    44




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Accounts receivable and allowance for doubtful accounts
    Goodwill and Intangible Assets
   a.
    
    The aggregate of the following:
 1.
    
    The consideration transferred measured in accordance ASC 805, which generally
requires acquisition-date fair value.2.
    
    The fair value of any non-controlling interest in the acquiree.3.
    
    In a business combination achieved in stages, the acquisition-date fair value
of the acquirers previously held equity interest in the acquiree.
 b.
    
    The net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed measured in accordance with ASC 805.
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Impairment of long-lived assets
 a) Impairment of goodwill
  
    
    a significant adverse change in the business climate or legal factors;
    
    an adverse action or assessment by a regulator;
    
    unanticipated competition;
    
    loss of key personnel;
    
    the likelihood that a reporting unit or a significant portion of a reporting unit
will be sold or disposed of; and
    
    a change in reportable segments; and/or results of testing for recoverability of a
significant asset group within a reporting unit.
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b) Impairment of long-lived assets other than goodwill
      Fair Value of Financial Instruments
   
    
    Level 1  defined as observable inputs such as quoted prices in active markets;
    
    Level 2  defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and
    
    Level 3  defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.
 47




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Share-based payments
   Options granted to employee:
    
    2009
    
    2010Risk-free rate of return
    
    
    3.43
    %
    
    
    2.744%-4.142
    %Weighted average expected option life
    
    10 years
    
    10 yearsExpected volatility rate
    
    
    40.30
    %
    
    
    64.00
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
   Recently issued accounting standards
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##### Table of Contents



A.
    
    Operating Results
 Results of Operations
 For the Year ended December 31, 2010 compared to the Years ended December 31, 2009 and December 31,
2008
  For the Years Ended December 31,
    
    
    Increase/
    
    
    Increase/(Amount in thousands)
    
    2008
    
    
    2009
    
    
    2010
    
    
    (Decrease)%
    
    
    (Decrease) %2009 vs 2008
    
    
    2010 vs 2009Revenues
    
    $
    41,685
    
    
    $
    37,741
    
    
    $
    48,967
    
    
    
    (9
    %)
    
    
    30
    %Cost of revenues
    
    
    (30,624
    )
    
    
    (28,059
    )
    
    
    (36,454
    )
    
    
    (8
    %)
    
    
    30
    %Gross profit
    
    
    11,061
    
    
    
    9,682
    
    
    
    12,513
    
    
    
    (12
    %)
    
    
    29
    %Operating expensesSales and marketing expenses
    
    
    (6,117
    )
    
    
    (3,384
    )
    
    
    (4,462
    )
    
    
    (45
    %)
    
    
    32
    %General and administrative expenses
    
    
    (13,135
    )
    
    
    (13,832
    )
    
    
    (12,203
    )
    
    
    5
    %
    
    
    (12
    %)Total operating expenses
    
    
    (19,252
    )
    
    
    (17,216
    )
    
    
    (16,665
    )
    
    
    (10
    %)
    
    
    (3
    %)Loss from operations
    
    
    (8,191
    )
    
    
    (7,534
    )
    
    
    (4,152
    )
    
    
    (8
    %)
    
    
    (45
    %)Other income/(expense)Interest income
    
    
    131
    
    
    
    11
    
    
    
    24
    
    
    
    (92
    %)
    
    
    118
    %Interest expense
    
    
    (2,717
    )
    
    
    (1,962
    )
    
    
    (45
    )
    
    
    (28
    %)
    
    
    (98
    %)Increase in fair value of liability warrant
    
    
    
    
    
    
    824
    
    
    
    
    
    
    
    
    
    
    
    (100
    %)(Loss)/Gain on extinguishment of the notes
    
    
    (4,400
    )
    
    
    6,669
    
    
    
    
    
    
    
    252
    %
    
    
    (100
    %)Loss on impairment of goodwill and
intangible assets
    
    
    (13,953
    )
    
    
    (15,749
    )
    
    
    (39,411
    )
    
    
    13
    %
    
    
    150
    %Loss on abandonment of lease
    
    
    (46
    )
    
    
    (550
    )
    
    
    (1,256
    )
    
    
    1096
    %
    
    
    128
    %Loss on impairment of fixed assets
    
    
    (2,135
    )
    
    
    
    
    
    
    
    
    
    
    (100
    %)
    
    
    Loss on disposals of fixed assets
    
    
    (2,121
    )
    
    
    (15
    )
    
    
    (4
    )
    
    
    (99
    %)
    
    
    (73
    %)Other income/ (expense), net
    
    
    
    
    
    
    
    
    
    
    (368
    )
    
    
    
    
    
    
    Foreign currency transaction loss, net
    
    
    (167
    )
    
    
    (24
    )
    
    
    (7
    )
    
    
    (86
    %)
    
    
    (71
    %)Total other expense
    
    
    (25,408
    )
    
    
    (10,796
    )
    
    
    (41,067
    )
    
    
    (58
    %)
    
    
    280
    %Loss before income taxes
    
    
    (33,599
    )
    
    
    (18,330
    )
    
    
    (45,219
    )
    
    
    (45
    %)
    
    
    147
    %Provision for income taxes
    
    
    (1,481
    )
    
    
    (4,319
    )
    
    
    (1,420
    )
    
    
    192
    %
    
    
    (67
    %)Net loss
    
    $
    (35,080
    )
    
    $
    (22,649
    )
    
    $
    (46,639
    )
    
    
    (35
    %)
    
    
    106
    %
 Revenue. We generate our revenues from providing advertising services over our network which
consists primarily of the following platforms:
 
    
    Outdoor billboard platform. We typically sign advertising contracts with terms
ranging from 6 to 24 months for billboard advertisements. Each contract will typically
specify the billboard location, measurement and the price. The contract price varies
substantially from contract to contract, based on the location and measurement of the
billboard. Deposits or progress payments are typically required at various stages of
the contract performance, such as signing of contract, confirmation of content and
completion of service period.
    
    In-elevator platform. We typically sign advertising contracts with terms ranging
from 1 to 6 months for in-elevator advertisements. Typically, we negotiate for a
contract price for covering a set of cities or districts within cities. We may
sometimes help certain clients design a detailed plan, based on the contract price and
targeted demographics, with particular buildings where the advertisements will be
displayed within the cities or districts specified under the contract. Progress
payments are typically required at various stages of the contract performance.
 50




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##### Table of Contents




    
    Transit advertising platform. We typically sign advertising contracts with terms
ranging from one to three months for subway and bus advertisements. The price typically
consists of advertising
fees and production fees for subway and bus advertisements. Typically, the contracts
specify a certain combination of subway stations and bus lines and we have the
discretion to assign specific subway light boxes and bus lines for each contract.
Service payments are typically required at pre-specified dates prior to the
completion of the contract.
     Cost of revenues
  Gross profit
 Operating expenses
 51




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##### Table of Contents




    
    Sales and marketing expenses. Sales and marketing expenses was $4.5 million for the
year ended December 2010 compared to $3.4 million for the year ended December 31, 2009
and $6.1 million for the year ended December 31, 2008, primarily due to the changes in
sales commissions in line with the net revenues and increase in marketing expenses for
expansion of business.
 
    
    General and administrative expenses. General and administrative expenses were $12.2
million for 2010 compared to $13.8 million for 2009 and $13.1 million for 2008.
  For the Years Ended December 31(Amounts in thousands)
    
    2008
    
    
    2009
    
    
    2010Bad debt expense
    
    $
    703
    
    
    $
    1,611
    
    
    $
    2,197Professional fee
    
    
    3,321
    
    
    
    4,759
    
    
    
    2,435Salary expense
    
    
    5,466
    
    
    
    2,785
    
    
    
    3,066Rental expense
    
    
    1,854
    
    
    
    1,643
    
    
    
    524Share-based compensation
    
    
    308
    
    
    
    403
    
    
    
    2,107Other G&A expense
    
    
    1,483
    
    
    
    2,631
    
    
    
    1,874$
    13,135
    
    
    $
    13,832
    
    
    $
    12,203
 Other expenses
 
    
    Interest expense. Interest expense costs in 2009 and 2008 consist predominately of
non-cash financial charges related to investments in SearchMedia International prior to
the completion of the Business Combination. The 2008 amount primarily relates to the
amortization of convertible promissory notes discount of $0.9 million, interest of $0.7
million on the convertible promissory notes and $0.6 million interest on New Note,
First Interim Notes and short-term loan from a third party lender. The 2009 amount
primarily consists of $1.0 million of interest expense on the convertible promissory
note. The Business Combination was closed in October 2009 and no related interest was
incurred in 2010.
 
    
    Gain/Loss on extinguishment of the notes. On September 17, 2008, certain notes
issued by SearchMedia International in March 2008 were cancelled by the holder. The
notes, with a principal sum of $10 million plus accrued interest of $0.6 million and
all the related conversion rights, were cancelled in exchange for a new note with a
principal sum of $15 million, which bears interest at 12% per annum and has no
conversion right. As a result of the cancellation of the notes in exchange for the
promissory note, a loss on extinguishment of the notes of $4.4 million was recognized
in the statement of income for the year ended December 31, 2008, which represented the
difference between the carrying value of the new note of $15.0 million and the sum of
the carrying value of the convertible promissory notes of $10.0 million, plus related
accrued interest of $0.6 million. The 2009 amount represents fair value gain on
extinguishment of the Promissory Note at the closure of reverse acquisition in October,
2009.
 52




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##### Table of Contents




    
    Loss on impairment of goodwill and intangible assets. As a result of the reduction
of the estimated value of the reporting units as part of annual impairment tests,
goodwill was reduced by $14.0 million in 2008, $15.7 million in 2009 and $39.4 million in 2010,
respectively.
 
    
    Loss on disposal and impairment of fixed assets. In
the fourth quarter of 2008, we
determined that a substantial portion of equipment for billboard displays related to
the Shanghai Bund project may not be effectively utilized in the future due to the
decision to halt marketing plans due to the unfavorable economic environment and
concession site reconstruction. As a result, we recorded a $2.1 million impairment
loss. We also disposed of approximately $2.1 million of digital and poster frame in the
year ended December 31, 2008. Loss on disposal of fixed assets were immaterial in 2009
and 2010.
 
    
    Provision for income taxes. Income tax expense was $1.5 million in 2008, $4.3
million in 2009 and $1.4 million in 2010. Although we had consolidated net loss, the
PRC statutory tax rate was 25% for our subsidiaries with net income.
 Net loss
 Effect of Inflation
  Foreign Currency
    53




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##### Table of Contents



Cash Flow Analysis
  For the Years Ended December 31,(Amounts in thousands)
    
    2008
    
    
    2009
    
    
    2010Net cash provided by/ (used in) operating activities
    
    $
    (1,451
    )
    
    $
    (8,775
    )
    
    $
    1,670Net cash used in investing activities
    
    
    (24,704
    )
    
    
    (40,593
    )
    
    
    (20,152
    )Net cash provided by/ (used in) financing activities
    
    
    24,676
    
    
    
    73,665
    
    
    
    (3,465
    )Foreign currency translation adjustment
    
    
    242
    
    
    
    5
    
    
    
    103Net increase/(decrease) in cash and cash equivalents
    
    
    (1,237
    )
    
    
    24,302
    
    
    
    (21,844
    )Cash and cash equivalents at beginning of year
    
    
    6,333
    
    
    
    5,096
    
    
    
    29,398Cash and cash equivalents at end of year
    
    $
    5,096
    
    
    $
    29,398
    
    
    $
    7,554
 Cash Flows from Operating Activities
 Cash Flows from Investing Activities
  
    
    a $19.4 million increase in cash paid for acquisitions in 2009 compared to 2008 and
a $20.4 million decrease in cash paid for acquisitions in 2010 compared to 2009; and
    
    a $3.3 million decrease in capital expenditures in 2009 compared to 2008.
 Cash Flows from Financing Activities
 Cash and Cash Equivalents
  B.
    
    Liquidity and Capital Resources
   54




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##### Table of Contents



C.
    
    Research and Development, Patents and Licenses, etc.
  D.
    
    Trend Information
  55




---



##### Table of Contents



E.
    
    Off-Balance Sheet Arrangements
  F. Tabular Disclosure of Contractual Obligations
  Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    Morethan 1
    
    
    1-3
    
    
    
    
    
    
    than 5Contractual Obligations ($000)
    
    Total
    
    
    year
    
    
    years
    
    
    3-5 years
    
    
    yearsOperating Lease Obligations
    
    $
    21,108
    
    
    $
    15,898
    
    
    $
    4,979
    
    
    $
    231
    
    
    $
    Other Long-Term Liabilities
Reflected on the Companys
Balance Sheet (1)
    
    
    39,195
    
    
    
    29,033
    
    
    
    10,162
    
    
    
    
    
    
    
    Total
    
    $
    60,303
    
    
    $
    44,931
    
    
    $
    15,141
    
    
    $
    231
    
    
    $
    
 
 (1)
    
    Represents consideration payable in connection to our acquisitions of a number
of advertising businesses. 
 Item 6
    
    Directors, Senior Management and Employees
 A.
    
    Directors and Senior Management
 Directors
  Name
    
    AgeRobert Fried
    
    
    51Qinying Liu
    
    
    48Steven D. Rubin
    
    
    50Glenn Halpryn
    
    
    50Chi-Chuan Chen
    
    
    52
  Mr. Robert Fried
 56




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##### Table of Contents



Ms. Qinying Liu
  Mr. Steven D. Rubin
  Mr. Glenn L. Halpryn
  57




---



##### Table of Contents



Mr. Chi-Chuan (Frank) Chen
  Executive Officers
  Name
    
    Age
    
    PositionPaul Conway
    
    
    41
    
    
    Chief Executive OfficerWilfred Chow
    
    
    45
    
    
    Chief Financial OfficerGarbo Lee
    
    
    53
    
    
    PresidentXiaotu Hu
    
    
    40
    
    
    Executive Vice President
   Mr. Paul Conway
 Mr. Wilfred Chow
 Ms. Garbo Lee
 Mr. Xiaotu Hu
  58




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##### Table of Contents



B.
    
    Compensation
   Share Incentives
   CommonSharesUnderlyingGrantedOptions/ or
    
    
    ExerciseRestricted
    
    
    Price
    
    
    
    
    
    
    ExpirationShares
    
    
    ($/share)
    
    
    Grant Date
    
    
    DateName:Paul Conway
    
    
    250,000
    
    
    
    6.05
    
    
    February 1, 2010
    
    January 31, 2020100,000
    
    
    
    
    
    
    February 1, 2010
    
    
    (1)Wilfred Chow
    
    
    225,000
    
    
    
    2.62
    
    
    January 4, 2010
    
    August 20, 2020Garbo Lee
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Robert Fried
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Glenn Halpryn
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Steve Rubin
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Chi-Chuan Chen
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Larry Lu
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Jianzhong Qu
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Earl Yen
    
    
    *
    
    
    
    7.14
    
    
    January 11, 2010
    
    January 10, 2020Other individuals as a group
    
    
    937,576
    
    
    
    (2
    )
    
    
    (2)
    
    
    
    (3)Total
    
    
    1,757,576
 
 *
    
    Less than one percent of the outstanding ordinary shares. (1)
    
    Vest on the three-year anniversary of the date of grant.(2)
    
    Options/restricted shares were granted to other individuals on various exercise price and various
dates(3)
    
    Other individuals options expire on various dates. 59




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##### Table of Contents



Plan Administration
 Types of Awards
 
    
    options to purchase SearchMedia Holdings ordinary shares;
    
    restricted shares, which represent non-transferable ordinary shares, that may be
subject to forfeiture, restrictions on transferability and other restrictions; and
    
    restricted share units, which represent the right to receive SearchMedia Holdingss
ordinary shares at a specified date in the future, which may be subject to forfeiture.
 Award Document
 Eligibility
 Acceleration of Awards upon Change of Control and Corporate Transactions
 Term of the Awards
 Vesting Schedule
 Transfer Restrictions
 60




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##### Table of Contents



Termination and Amendment of the Plan
 C.
    
    Board Practices
   Board Committees
  Audit Committee Members and Financial Expert
  Compensation Committee Members
  Corporate Governance and Nominating Committee Members
  Code of Ethics
 www.searchmediaholdings.com
 61




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##### Table of Contents



Compensation of Directors
  D. Employees
   E.
    
    Share Ownership
  
 Item 7
    
    Major Shareholders and Related Party Transactions
 A.
    
    Major Shareholders
  Percentage of Class ofOrdinary Shares
    
    
    Ordinary SharesBeneficial Owner
    
    Beneficially Owned (1)
    
    
    Beneficially Owned (%)Officers and Directors
Qinying Liu (2)
    
    
    989,085
    
    
    
    4.7
    %Robert N. Fried(3)
    
    
    1,307,465
    
    
    
    6.3
    %Steven D. Rubin(4)
    
    
    363,870
    
    
    
    1.7
    %Glenn Halpryn (5)
    
    
    40,860
    
    
    
    *Chi-Chuan Chen (6)
    
    
    25,000
    
    
    
    *Garbo Lee (7)
    
    
    57,056
    
    
    
    *Paul Conway (8)
    
    
    86,333
    
    
    
    *Wilfred Chow (9)
    
    
    77,000
    
    
    
    *Xiaotu Hu
    
    
    
    
    
    
    All directors and executive officers as a group (9 persons)
    
    
    2,946,669
    
    
    
    13.9
    %5% HoldersDr. Phillip Frost, M.D. (10)
    
    
    5,273,169
    
    
    
    22.5
    %Deutsche Bank AG, HK Branch(11)
    
    
    2,399,995
    
    
    
    11.4
    %China Seed Ventures, L.P.(12)
    
    
    2,445,083
    
    
    
    11.2
    %Linden Ventures II(13)
    
    
    1,982,820
    
    
    
    9.2
    %Heartland Advisors Inc. (14)
    
    
    1,600,000
    
    
    
    7.7
    %Luxor Capital Group, LP (15)
    
    
    1,323,954
    
    
    
    6.4
    %
 
 *
    
    The person beneficially owns less than 1% of SearchMedia Holdings outstanding common shares. 62




---



##### Table of Contents



(1)
    
    Based on 20,858,661 shares outstanding as of June 20, 2011.(2)
    
    Excludes 600,000 ordinary shares issuable to Mrs. Lius husband converted at the exchange
ratio (0.0675374) and 40,522 ordinary shares beneficially owned by Mrs. Lius husband.
Includes 25,000 shares of common stock underlying options that are currently exercisable or
exercisable within 60 days after June 20, 2011.(3)
    
    Includes exercisable warrants to purchase 593,793 ordinary shares and includes 50,000 shares
of common stock underlying options that are currently exercisable or exercisable within 60
days after June 20, 2011.(4)
    
    Includes exercisable warrants to purchase 153,000 ordinary shares and includes 50,000 shares
of common stock underlying options that are currently exercisable or exercisable within 60
days after June 20, 2011.(5)
    
    Includes ordinary shares and exercisable warrants to purchase 3,172 ordinary shares
beneficially owned by Halpryn Capital Partners LLC and includes 25,000 shares of common stock
underlying options that are currently exercisable or exercisable within 60 days after June 20,
2011.(6)
    
    Includes 25,000 shares of common stock underlying options that are currently exercisable or
exercisable within 60 days after June 20, 2011.(7)
    
    Includes 57,056 shares of common stock underlying options that are currently exercisable or
exercisable within 60 days after June 20, 2011.(8)
    
    Includes 83,333 shares of common stock underlying options that are currently exercisable or
exercisable within 60 days after June 20, 2011.(9)
    
    Includes 75,000 shares of common stock underlying options that are currently exercisable or
exercisable within 60 days after June 20, 2011.(10)
    
    Includes exercisable warrants to purchase 2,626,434 ordinary shares. Ownership is as reported
in the Schedule 13D/A filed by Dr. Phillip Frost, M.D. on December 24, 2009. The business
address of Dr. Frost, M.D. is 4400 Biscayne Blvd., Suite 1500, Miami, Florida 33137.(11)
    
    Includes exercisable warrants to purchase 255,427 ordinary shares. Ownership is as reported
in the Schedule 13G filed by Deutsche Bank AG, HK Branch on November 10, 2009. The business
address of Deutsche Bank AG, HK Branch is Theodor-Heuss-Allee 70, 60468 Frankfurt am Main,
Federal Republic of Germany.(12)
    
    Includes exercisable warrants to purchase 903,318 ordinary shares. Ownership is as reported
in the Schedule 13D filed by China Seed Ventures, L.P. on January 21, 2010. The business
address of China Seed Ventures, L.P. is Room 104 Building 18, No. 800 Huashan Road, Shanghai,
China.(13)
    
    Includes exercisable warrants to purchase 714,025 ordinary shares. Ownership is as reported
in the Schedule 13G filed by Linden Ventures II on November 6, 2009. The business address of
Linden Ventures
II is C/O Appleby, 56 Admin Drive, Wickhams Cay 1, PO Box 3190, Road Town, Tortola, British
Virgin Islands.(14)
    
    Ownership is as reported in the Schedule 13G/A filed by Heartland Advisors Inc. on February
10, 2011. The business address of Heartland Advisor Inc is 789 North Water Street, Milwaukee,
Wisconsin 53202.(15)
    
    Ownership is as reported in the Schedule 13G/A filed by Luxor Capital Group, LP on February
14, 2011. The business address of Luxor Capital Group, LP is 1114 Avenue of the Americas,
29th Floor, New York, New York 10036. 63




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##### Table of Contents



Equity Compensation Plan Information
  Number of securitiesremaining availablefor future issuanceunder equityNumber of securities to
    
    
    Weighted average
    
    
    compensation plansbe issued upon exercise
    
    
    exercise price of
    
    
    (excludingPlan category
    
    of outstanding options
    
    
    outstanding options
    
    
    outstanding options)Equity compensation plans approved by security holders
    
    
    1,326,890
    
    
    $
    3.97
    
    
    
    351,693Equity compensation plans not approved by security
holders (1)
    
    
    
    
    
    
    
    
    
    
    1,203,508Total
    
    
    1,326,890
    
    
    $
    3.97
    
    
    
    1,555,201
 
 (1)
    
    In August 2010, the Board of Directors approved an increase in the number of shares reserved
for issuance under the plan to 3,000,000 and such increase will be presented for shareholder
approval. B.
    
    Related Party Transactions
 Certain Relationships and Related Transactions
  Transactions with SearchMedia Internationals Shareholders, Senior Management Personnel and
Affiliated Entities of Companies Acquired by Shanghai Jingli
  64




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##### Table of Contents



Director Independence
  C.
    
    Interests of Experts and Counsel
  
 Item 8
    
    Financial Information
 A.
    
    Consolidated Statements and Other Financial Information
  Legal or Arbitration Proceedings
 Shareholder Lawsuits in the United States
 Sid Murdeshwar, Individually and on Behalf of
All Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition
Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E.
Beier, David H. Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer
Huang, Defendants
 Hymie Akst, Individually and on Behalf of All
Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition
Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E.
Beier, David H. Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer
Huang, Defendants
 65




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##### Table of Contents



Murdeshwar Akst Murdeshwar
   Securities and Exchange Commission Investigation
  Lawsuits in China
     SearchMedia Arbitration Claim Against Prior Shareholders
  66




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##### Table of Contents



Dividend Policy
  B.
    
    Significant Changes
  
 Item 9
    
    The Offer and Listing
 A.
    
    Offer and Listing Details
   Annual High and Low Market Prices for the Five MostRecent Full Financial YearsUnits (1)
    
    
    Common Stock
    
    
    WarrantsHigh
    
    
    Low
    
    
    High
    
    
    Low
    
    
    High
    
    
    LowFull Financial Year2006
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2007(2)
    
    $
    8.01
    
    
    $
    7.85
    
    
    $
    7.20
    
    
    $
    7.20
    
    
    $
    0.70
    
    
    $
    0.702008
    
    $
    8.10
    
    
    $
    6.85
    
    
    $
    8.10
    
    
    $
    6.75
    
    
    $
    0.71
    
    
    $
    0.032009
    
    $
    9.82
    
    
    $
    7.17
    
    
    $
    9.20
    
    
    $
    7.09
    
    
    $
    3.14
    
    
    $
    0.032010
    
    $
    
    
    
    $
    
    
    
    $
    7.55
    
    
    $
    1.62
    
    
    $
    2.25
    
    
    $
    0.19
 
 (1)
    
    During the fourth quarter of 2009, trading in the units was suspended.(2)
    
    This table sets forth the range of high and low sales prices for the units, common stock and
warrants for the applicable portion of the year ended December 31, 2007. The units commenced
public trading on November 20, 2007, and the common stock and warrants commenced public
trading separately on December 26, 2007. The table also includes price information for
Ideation Acquisition Corp. securities before the Business Combination. 67




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##### Table of Contents



High and Low Market Prices for each Full FinancialQuarter for the Two Most Recent Yearsand the Subsequent QuartersUnits (1)
    
    
    Common Stock
    
    
    WarrantsHigh
    
    
    Low
    
    
    High
    
    
    Low
    
    
    High
    
    
    Low2009First Quarter
    
    $
    7.70
    
    
    $
    7.17
    
    
    $
    7.55
    
    
    $
    7.18
    
    
    $
    0.15
    
    
    $
    0.03Second Quarter
    
    $
    8.72
    
    
    $
    7.41
    
    
    $
    7.86
    
    
    $
    7.50
    
    
    $
    0.69
    
    
    $
    0.11Third Quarter
    
    $
    9.82
    
    
    $
    8.15
    
    
    $
    7.99
    
    
    $
    7.69
    
    
    $
    1.69
    
    
    $
    0.48Fourth Quarter (1)
    
    $
    
    
    
    $
    
    
    
    $
    9.20
    
    
    $
    7.09
    
    
    $
    3.14
    
    
    $
    1.412010First Quarter
    
    $
    
    
    
    $
    
    
    
    $
    7.55
    
    
    $
    4.51
    
    
    $
    2.25
    
    
    $
    0.80Second Quarter
    
    $
    
    
    
    $
    
    
    
    $
    6.14
    
    
    $
    3.01
    
    
    $
    1.20
    
    
    $
    0.40Third Quarter
    
    $
    
    
    
    $
    
    
    
    $
    3.63
    
    
    $
    1.62
    
    
    $
    0.58
    
    
    $
    0.22Fourth Quarter
    
    $
    
    
    
    $
    
    
    
    $
    3.65
    
    
    $
    1.68
    
    
    $
    0.50
    
    
    $
    0.192011First Quarter
    
    $
    
    
    
    $
    
    
    
    $
    3.50
    
    
    $
    1.71
    
    
    $
    0.35
    
    
    $
    0.12Second Quarter
    
    $
    
    
    
    $
    
    
    
    $
    2.72
    
    
    $
    1.42
    
    
    $
    0.35
    
    
    $
    0.13(through June 24, 2011)
 
 (1)
    
    During the fourth quarter of 2009, trading in the units was suspended. High and Low Market Prices for each of the Most Recent Six MonthsUnits (1)
    
    Common Stock
    
    WarrantsHigh
    
    Low
    
    High
    
    Low
    
    High
    
    Low2011January
    
    $
    
    $
    
    $
    3.50
    
    
    $
    2.81
    
    
    $
    0.35
    
    
    $
    0.23February
    
    $
    
    $
    
    $
    3.28
    
    
    $
    2.34
    
    
    $
    0.35
    
    
    $
    0.20March
    
    $
    
    $
    
    $
    2.67
    
    
    $
    1.71
    
    
    $
    0.20
    
    
    $
    0.12April
    
    $
    
    $
    
    $
    2.72
    
    
    $
    1.42
    
    
    $
    0.35
    
    
    $
    0.13May
    
    $
    
    $
    
    $
    2.17
    
    
    $
    1.99
    
    
    $
    0.30
    
    
    $
    0.20June (through June 24, 2011)
    
    $
    
    $
    
    $
    2.10
    
    
    $
    1.81
    
    
    $
    0.22
    
    
    $
    0.13
 
 (1)
    
    During the fourth quarter of 2009, trading in the units was suspended.   B.
    
    Plan of Distribution
  C.
    
    Markets
  D.
    
    Selling Shareholders
  68




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##### Table of Contents



E.
    
    Dilution
  F.
    
    Expenses of the Issue
  
 Item 10
    
    Additional Information
 A.
    
    Share Capital
  B.
    
    Memorandum and Articles of Association
  C.
    
    Material Contracts
  D.
    
    Exchange Controls
  E.
    
    Taxation
  Cayman Islands Taxation
  United States Federal Income Taxation
  69




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
    
    banks and other financial institutions;
    
    insurance companies;
    
    regulated investment companies;
    
    real estate investment trusts;
    
    broker-dealers;
    
    traders that elect to use a mark-to-market method of accounting;
    
    U.S. expatriates;
    
    tax-exempt entities;
    
    persons liable for alternative minimum tax;
    
    persons holding a common share as part of a straddle, hedging, conversion or
integrated transaction;
    
    persons that actually or constructively own 10% or more of the total combined voting
power of all classes of our voting stock;
    
    persons who acquired common shares pursuant to the exercise of any employee share
option or otherwise as compensation; or
    
    partnerships or other pass-through entities, or persons holding common shares
through such entities.
 INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX
RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON SHARES.
  
    
    an individual who is a citizen or resident of the United States;
    
    a corporation (or other entity treated as a corporation for U.S. federal income tax
purposes) created or organized in the United States or under the laws of the United
States, any State thereof or the District of Columbia;
    
    an estate, the income of which is subject to U.S. federal income taxation regardless
of its source; or
    
    a trust that (i) is subject to the primary supervision of a court within the United
States and the control of one or more U.S. persons for all substantial decisions or
(ii) has a valid election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.
 70




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Taxation of dividends and other distributions on the common shares
     71




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Taxation of disposition of common shares
  Passive foreign investment company
  
    
    at least 75% of its gross income for such year is passive income; or
    
    at least 50% of the value of its assets (based on an average of the quarterly values
of the assets) during such year is attributable to assets that produce passive income
or are held for the production of passive income.
    72




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
    
    the excess distribution or recognized gain will be allocated ratably over your
holding period for the common shares;
    
    the amount allocated to the current taxable year, and any taxable years in your
holding period prior to the first taxable year in which we were a PFIC, will be treated
as ordinary income; and
    
    the amount allocated to each other taxable year will be subject to the highest tax
rate in effect for individuals or corporations, as applicable, for each such year and
the interest charge generally applicable to underpayments of tax will be imposed on the
resulting tax attributable to each such year.
     73




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##### Table of Contents



pro rata
  You are strongly urged to consult your tax advisor regarding the application of the PFIC rules to
your investment in common shares.
 Information reporting and backup withholding
   F.
    
    Dividends and Paying Agents
  G.
    
    Statement by Experts
  H.
    
    Documents on Display
    74




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I.
    
    Subsidiary Information
  
 Item 11
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 12 Description of Securities Other than Equity Securities
  
 PART II
 
 Item 13
    
    Defaults, Dividend Arrearages and Delinquencies
  
 Item 14
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15
    
    Controls and Procedures
 Disclosure Controls and Procedures
   75




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Managements Annual Report on Internal Control Over Financial Reporting
     
    
    Revenue recognition and accounts receivable issues;
    
    Disclosure, approval, and documentation of related entity transactions;
    
    Recording of various erroneous transactions by certain employees;
    
    Recording of certain assets and other accounting irregularities related to
acquisitions;
    
    Diligence and approval of questionable transactions; and
    
    Confirmation of payments related to acquisitions.
   
    
    The Company has hired more qualified accountants at its corporate offices and
subsidiary locations.
 76




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##### Table of Contents




    
    The Company identified key control points for continuous monitoring of and design
effective controls for each business cycle, particularly with regard to
revenues/accounts receivable and expenses/accounts payable.
    
    The Company updated an accounting manual and provided training to all relevant
employees.
    
    The Company worked with legal counsel and external consultants and developed a
complete set of written compliance policies and provided regular tailored training to
relevant senior management on following issues:
 -
    
    Fiduciary duties of officers and directors;-
    
    Foreign Corrupt Practices Act risks;-
    
    Insider trading;-
    
    Code of Business Ethics and Conduct;-
    
    Sarbanes Oxley and importance of accurate financial statements
with focus on China-related accounting risks;-
    
    Third party whistleblower.
 
    
    The Company improved diligence and approval of transactions, repository of
documentation to support supplier and client contracts and undertake the following:
 -
    
    Strengthened contracts review and authorization processes;-
    
    Revised internal contracts review and authorization policy;-
    
    Implemented checklists of documentation that must be provided
and filed for each material contract;-
    
    Strengthened advertising monitoring reports system and obtain clients feedback;-
    
    Continue regular updating of business intelligence on counterparties.
  
    
    Revenue recognition and accounts receivable recoverability review;
 
    
    Disclosure, approval, and documentation of transactions among entities related to
prior owners of acquired subsidiaries (which we refer to as related entity
transactions);
   
    
    Revise accounts receivable credit policy and conduct more regular bad debt reviews
and evaluation of provisions;
    
    Ensure effective implementation of aging analysis and update collection reports more
frequently;
    
    Commissioning selective periodic independent confirmations to confirm that
advertisements have been placed in accordance with agreements, particularly in
connection with high value sales where the client is not an 4As (defined as American
Association of Advertising Agencies) company.
    
    Clarify and mitigate related-party issues, identify and implement control points for
each process, including requiring divestment of shareholders personal interests where
appropriate;
 77




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
    
    Improve transparency of financial reporting procedures; and
    
    Increase internal controls, in particular regarding subsidiaries cash.
 
 Item 16A
    
    Audit Committee Financial Expert
  
 Item 16B
    
    Code of Ethics
 www.searchmediaholdings.com
 
 Item 16C
    
    Principal Accountant Fees and Services
  Fiscal
    
    
    Fiscal2010
    
    
    2009(1)(2)Audit fees
    
    $
    350,000
    
    
    $
    450,000Audit related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    $
    350,000
    
    
    $
    450,000
 
 (1)
    
    Does not include fees of KPMG. KPMG served as the auditor for SearchMedia International
during Fiscal 2009. KPMGs fees during Fiscal 2009 consisted of $1,038,078 of audit fees and
$30,900 of all other fees. On May 7, 2010, KPMG resigned as our auditor.(2)
    
    Does not include fees of Rothstein, Kass & Company (Rothstein), Ideations independent
registered public accountant for Fiscal 2009, through completion of the Business Combination.
Rothsteins fees during Fiscal 2009 consisted of $40,260.  78




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Item 16D
    
    Exemptions from the Listing Standards for Audit Committees
  
 Item 16E
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  ISSUER PURCHASES OF EQUITY SECURITIES
 (d) MaximumNumber (or(c) Total Number of
    
    
    Approximate DollarWarrants Purchased
    
    
    Value) of Warrantsas Part of Publicly
    
    
    that May Yet Be(a) Total Number of
    
    
    (b) Average Price
    
    
    Announced Plans or
    
    
    Purchased Under thePeriod
    
    
    Warrants Purchased
    
    
    Paid per Warrant
    
    
    Programs
    
    
    Plans or ProgramsJanuary 1, 2010 -
January 31, 2010
    
    
    
    1,738,500
    
    
    
    $
    2.19
    
    
    
    
    1,738,500
    
    
    
    $
    1,190,562
 
 Item 16F
    
    Change in Registrants Certifying Accountant
   
 Item 16G
    
    Corporate Governance
 Section 110 of the NYSE AMEX LLC Company Guide permits foreign private issuers like us to follow
home country practice with respect to certain corporate governance matters. We are not aware of
any significant ways in which our corporate governance practices differ from those followed by U.S.
domestic companies under the NYSE AMEX LLC Company Guide.
 
 PART III
 
 Item 17
    
    Financial Statements
  79




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Item 18
    
    Financial Statements
  
 Item 19
    
    Exhibits
 ExhibitNumber
    
    Description of Exhibits1.1
    
    Memorandum and Articles of Association of SearchMedia Holdings Limited upon
completion of redomestication. (incorporated by reference to Exhibit 3.3 of the
Registrants current report on Form 8-K dated November 5, 2009 (File No.
333-158336)).2.1
    
    Form of Warrant of SearchMedia Holdings Limited (incorporated by reference to
Exhibit 4.5 of the Registrants Registration Statement on Form S-4 (File No.
333-158336)).3.1
    
    Form of Voting Agreement between SearchMedia International Limited, Qinying Liu,
Le Yang, China Seed Ventures, L.P., Gentfull Investment Limited, Gavast Estates
Limited, Linden Ventures II (BVI), Limited, Frost Gamma Investments Trust, Robert
N. Fried, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao (incorporated by
reference to Exhibit 10.4 of the Registrants Registration Statement on Form S-4
(File No. 333-158336)).4.1
    
    Agreement and Plan of Merger, Conversion and Share Exchange by and among Ideation
Acquisition Corp., the registrant, SearchMedia International Limited, the
subsidiaries of SearchMedia International Limited, the subsidiaries of SearchMedia
International Limited, Shanghai Jingli Advertising Co., Ltd. and certain
shareholders and warrant holders of SearchMedia International Limited
(incorporated by reference to Exhibit 2.1 of the Registrants Registration
Statement on Form S-4 (File No. 333-158336)).4.2
    
    First Amendment to Agreement and Plan of Merger, Conversion and Share Exchange,
dated as of May 27, 2009, by and among the registrant, Earl Yen, Tommy Cheung and
Stephen Lau and Qinying Liu (incorporated by reference to Exhibit 2.2 of the
Registrants Registration Statement on Form S-4 (File No. 333-158336)).4.3
    
    Second Amendment to Agreement and Plan of Merger, Conversion and Share Exchange,
dated as of September 8, 2009, by and among the registrant, Earl Yen, Tommy
Cheung, Stephen Lau, Qinying Liu, Linden Ventures, Inc., Vervain Equity Investment
Limited, Sun Hing Associates Limited and The Frost Group, LLC (incorporated by
reference to Exhibit 2.3 of the Registrants Registration Statement on Form S-4
(File No. 333-158336)).4.4
    
    Third Amendment to Agreement and Plan of Merger, Conversion and Share Exchange,
dated as of September 22, 2009, by and among the registrant, Ideation Acquisition
Corp., Earl Yen, Tommy Cheung, Terrance Hogan, Qinying Liu, and Linden Ventures II
(BVI), Ltd. (incorporated by reference to Exhibit 2.4 of the Registrants
Registration Statement on Form S-4 (File No. 333-158336)).4.5
    
    Fourth Amendment to Agreement and Plan of Merger, Conversion and Share Exchange,
dated as of October 30, 2009, by and among the registrant, Ideation Acquisition
Corp., Earl Yen, Tommy Cheung, Stephen Lau and Qinying Liu. (incorporated by
reference to Exhibit 2.5 of the Registrants current report on Form 8-K dated
November 5, 2009 (File No. 333-158336)).4.6
    
    Form of Registration Rights Agreement among SearchMedia International Limited,
Deutsche Bank AG, Hong Kong Branch, Gentfull Investment Limited, Gavast Estates
Limited, China Seed Ventures, L.P. and Linden Ventures II (BVI) (incorporated by
reference to Exhibit 10.1 of the Registrants Registration Statement on Form S-4
(File No. 333-158336)).4.7
    
    Form of Lock-Up between SearchMedia Holdings Limited and SearchMedia International
Limited shareholders and warrant holders (incorporated by reference to Exhibit
10.2 of the Registrants Registration Statement on Form S-4 (File No.
333-158336)).4.8
    
    Form of Management Lock-Up between SearchMedia Holdings Limited and SearchMedia
International Limited shareholders and warrant holders (incorporated by reference
to Exhibit 10.3 of the Registrants Registration Statement on Form S-4 (File No.
333-158336)).*
 80




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibits4.9
    
    Form of Employment Agreement with the SearchMedia International Limited executive
officers (incorporated by reference to Exhibit 10.5 of the Registrants
Registration Statement on Form S-4 (File No. 333-158336)).*4.10
    
    English Translation of Exclusive Technology Consulting and Service Agreement
between Jieli Consulting and Jingli Shanghai, dated as of September 10, 2007
(incorporated by reference to Exhibit 10.6 of the Registrants Registration
Statement on Form S-4 (File No. 333-158336)).4.11
    
    English Translation of Exclusive Call Option Agreement among Jingli Shanghai, its
shareholders and Jieli Consulting, dated as of September 10, 2007 (incorporated by
reference to Exhibit 10.7 of the Registrants Registration Statement on Form S-4
(File No. 333-158336)).4.12
    
    English Translation of Equity Pledge Agreement among Jingli Shanghai, its
shareholders and Jieli Consulting, dated as of September 10, 2007 (incorporated by
reference to Exhibit 10.8 of the Registrants Registration Statement on Form S-4
(File No. 333-158336)).4.13
    
    English Translation of Power of Attorney by the shareholders of Jieli Consulting
dated as of September 10, 2007 (incorporated by reference to Exhibit 10.9 of the
Registrants Registration Statement on Form S-4 (File No. 333-158336)).4.14
    
    English Translation of Loan Agreement between the shareholders of Jingli Shanghai
and Jieli Consulting, dated as of September 10, 2007 (incorporated by reference to
Exhibit 10.10 of the Registrants Registration Statement on Form S-4 (File No.
333-158336)).4.15
    
    Letter Agreement, dated as of September 8, 2009, by and among Ideation Acquisition
Corp. and certain investors of Ideation Acquisition Corp. and SearchMedia
International Limited (incorporated by reference to Exhibit 10.13 of the
Registrants Registration Statement on Form S-4 (File No. 333-158336)).4.16
    
    SearchMedia Holdings Limited Amended and Restated 2008 Share Incentive Plan*
(incorporated by reference to Exhibit 10.13 of the Registrants current report on
Form 8-K dated November 5, 2009 (File No. 333-158336)).4.17
    
    Executive Employment Agreement between SearchMedia Holdings Limited and Wilfred
Chow dated December 30, 2009 (incorporated by reference to Exhibit 10.1 of the
Registrants current report on Form 8-K dated January 6, 2010 (File No.
333-158336)).*4.18
    
    Executive Employment Agreement between SearchMedia Holdings Limited and Paul
Conway dated January 29, 2010 (incorporated by reference to Exhibit 10.1 of the
Registrants current report on Form 8-K dated February 3, 2010 (File No.
333-158336)).*8.1
    
    Subsidiaries of SearchMedia Holdings Limited **12.1
    
    Certification of Chief Executive Officer filed pursuant to 17 CFR 240.13a-14(a). **12.2
    
    Certification of Chief Financial Officer filed pursuant to 17 CFR 240.13a-14(a). **13.1
    
    Certification of Chief Executive Officer furnished pursuant to 17 CFR
240.13a-14(b) and 18 U.S.C. Section 1350.***13.2
    
    Certification of Chief Financial Officer furnished pursuant to 17 CFR
240.13a-14(b) and 18 U.S.C. Section 1350.***
 
 *
    
    Management contract or compensatory plan or arrangement**
    
    Filed herewith***
    
    Furnished herewith 81




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SIGNATURES
  (Registrant)By:

/s/
Wilfred ChowName:
    Wilfred ChowTitle:
    Chief Financial Officer  82




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SEARCHMEDIA HOLDINGS LIMITED
  PageReport of independent registered public accounting firm
    
    F-2Consolidated balance sheets as of December 31, 2009 and 2010
    
    F-4Consolidated statements of operations for the years ended December 31, 2008, 2009 and 2010
    
    F-6Consolidated
statements of changes in shareholders equity and comprehensive
(loss)/income for the
     years ended December 31, 2008, 2009 and 2010
    
    F-7Consolidated statements of cash flows for the years ended December 31, 2008, 2009 and 2010
    
    F-8Notes to consolidated financial statements
    
    F-9
 F-1




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F-2




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F-3




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SEARCHMEDIA HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
 As of December 31,2009
    
    
    2010ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    29,398
    
    
    $
    7,554Restricted cash
    
    
    270
    
    
    
    11Accounts receivable, net
    
    
    12,996
    
    
    
    18,065Amounts due from related parties
    
    
    2,840
    
    
    
    966Prepaid expenses and other current assets
    
    
    4,656
    
    
    
    8,340Deferred tax assets
    
    
    480
    
    
    
    891Total current assets
    
    
    50,640
    
    
    
    35,827NON-CURRENT ASSETSProperty and equipment, net
    
    
    1,405
    
    
    
    1,133Deposits for property and equipment
    
    
    553
    
    
    
    2Intangible assets, net
    
    
    1,276
    
    
    
    3,954Goodwill
    
    
    45,891
    
    
    
    45,955Total assets
    
    $
    99,765
    
    
    $
    86,871LIABILITIES & SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    9,013
    
    
    $
    13,894Accrued expenses and other payables
    
    
    15,898
    
    
    
    17,931Short-term borrowings
    
    
    654
    
    
    
    729Acquisition consideration payable
    
    
    16,381
    
    
    
    29,033Amounts due to related parties
    
    
    346
    
    
    
    1,958Deferred revenue
    
    
    1,902
    
    
    
    2,481Income taxes payable
    
    
    6,855
    
    
    
    9,228Total current liabilities
    
    
    51,049
    
    
    
    75,254NON-CURRENT LIABILITIESLong-term acquisition consideration payable
    
    
    
    
    
    
    10,162Long-term payables
    
    
    
    
    
    
    3Deferred tax liabilities
    
    
    316
    
    
    
    989Total liabilities
    
    
    51,365
    
    
    
    86,408Commitments and contingency (Note 18)SHAREHOLDERS EQUITYCommon Shares  $0.0001 par value, 1,000,000,000
shares authorized, 20,758,368 and 20,858,661
shares issued and outstanding on December 31,
2009 and 2010, respectively
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    122,922
    
    
    
    121,521Accumulated other comprehensive income
    
    
    1,050
    
    
    
    1,153Accumulated deficit
    
    
    (75,574
    )
    
    
    (122,213
    )Total shareholders equity
    
    
    48,400
    
    
    
    463Total liabilities and shareholders equity
    
    $
    99,765
    
    
    $
    86,871
 F-4




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As of December 31,2009
    
    
    2010ASSETSCash and cash equivalents
    
    $
    5,167
    
    
    $
    1,942Accounts receivable, net
    
    
    12,564
    
    
    
    3,586Property and equipment, net
    
    
    562
    
    
    
    359LIABILITIESAccounts payable
    
    $
    8,863
    
    
    $
    5,072Accrued expenses and other payables
    
    
    12,925
    
    
    
    8,098Short-term borrowings
    
    
    654
    
    
    
    Deferred revenue
    
    
    1,674
    
    
    
    171
  F-5




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SEARCHMEDIA HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
 For the Years Ended December 31,2008
    
    
    2009
    
    
    2010Advertising services revenues
    
    $
    41,685
    
    
    $
    37,741
    
    
    $
    48,967Cost of revenues
    
    
    (30,624
    )
    
    
    (28,059
    )
    
    
    (36,454
    )Gross profit
    
    
    11,061
    
    
    
    9,682
    
    
    
    12,513Operating expensesSales and marketing expenses
    
    
    (6,117
    )
    
    
    (3,384
    )
    
    
    (4,462
    )General and administrative expenses
    
    
    (13,135
    )
    
    
    (13,832
    )
    
    
    (12,203
    )Loss from operations
    
    
    (8,191
    )
    
    
    (7,534
    )
    
    
    (4,152
    )Other income/(expense)Interest income
    
    
    131
    
    
    
    11
    
    
    
    24Interest expense
    
    
    (2,717
    )
    
    
    (1,962
    )
    
    
    (45
    )Decrease in fair value of liability
warrant
    
    
    
    
    
    
    824
    
    
    
    Gain/(loss) on extinguishment of notes
    
    
    (4,400
    )
    
    
    6,669
    
    
    
    Loss on impairment of goodwill and
intangible assets
    
    
    (13,953
    )
    
    
    (15,749
    )
    
    
    (39,411
    )Loss on abandonment of lease
    
    
    (46
    )
    
    
    (550
    )
    
    
    (1,256
    )Loss on impairment of fixed assets
    
    
    (2,135
    )
    
    
    
    
    
    
    Loss on disposal of fixed assets
    
    
    (2,121
    )
    
    
    (15
    )
    
    
    (4
    )Other income/(expense), net
    
    
    
    
    
    
    
    
    
    
    (368
    )Foreign currency transaction loss, net
    
    
    (167
    )
    
    
    (24
    )
    
    
    (7
    )Total other expense
    
    
    (25,408
    )
    
    
    (10,796
    )
    
    
    (41,067
    )Loss before income taxes
    
    
    (33,599
    )
    
    
    (18,330
    )
    
    
    (45,219
    )Provision for income taxes
    
    
    (1,481
    )
    
    
    (4,319
    )
    
    
    (1,420
    )Net loss
    
    $
    (35,080
    )
    
    $
    (22,649
    )
    
    $
    (46,639
    )Loss per shareBasic and diluted
    
    $
    (0.0162
    )
    
    $
    (0.0044
    )
    
    $
    (0.0022
    )Weighted average number of shares
outstanding Basic and diluted
    
    
    2,169,269
    
    
    
    5,100,465
    
    
    
    20,796,789
  For the Years Ended December 31,2008
    
    
    2009
    
    
    2010Advertising services revenues
    
    $
    39,837
    
    
    $
    36,289
    
    
    $
    20,709Gross profit
    
    
    10,897
    
    
    
    9,924
    
    
    
    5,556Net loss
    
    
    (22,874
    )
    
    
    (23,589
    )
    
    
    (19,194
    )
  F-6




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##### Table of Contents



SEARCHMEDIA HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
AND COMPREHENSIVE (LOSS)/INCOME
(Amounts in thousands, except share data)
 Series A convertibleCommon Stock
    
    
    preferred sharesNumber
    
    
    
    
    
    
    Number
    
    
    
    
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    Totalof
    
    
    Amount
    
    
    of
    
    
    Amounts
    
    
    paid-in
    
    
    comprehensive
    
    
    Accumulated
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    US$
    
    
    shares
    
    
    US$
    
    
    capital
    
    
    income
    
    
    deficit
    
    
    (deficit)/equity
    
    
    Loss AmountBeginning as of January 1, 2008
    
    
    2,169,269
    
    
    $
    
    
    
    
    675,374
    
    
    $
    722
    
    
    $
    389
    
    
    $
    201
    
    
    $
    (4,937
    )
    
    $
    (3,625
    )
    
    $
    (9,426
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,080
    )
    
    
    (35,080
    )
    
    
    (35,080
    )Foreign currency exchange
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    898
    
    
    
    
    
    
    
    898
    
    
    
    898Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (34,182
    )Convertible note beneficial
conversion feature
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Extinguishment of the notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accretion to Series B
redeemable convertible
preferred shares redemption
value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (414
    )
    
    
    
    
    
    
    (4,758
    )
    
    
    (5,172
    )Accretion to Series C
redeemable convertible
preferred shares redemption
value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,949
    )
    
    
    (1,949
    )Note warrant transferred to
equity warrant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    997
    
    
    
    
    
    
    
    
    
    
    
    997Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    311
    
    
    
    
    
    
    
    
    
    
    
    311Statutory reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    (102
    )
    
    
    Cumulative effective of
reclassification of warrants
under EITF 07-5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    520
    
    
    
    520Note warrant transferred from
equity to liability under EITF
07-5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (997
    )
    
    
    
    
    
    
    
    
    
    
    (997
    )Warrant B transferred from
equity to liability under
EITF 07-5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (388
    )
    
    
    
    
    
    
    
    
    
    
    (388
    )Balance as of December 31, 2008
    
    
    2,169,269
    
    
    
    
    
    
    
    675,374
    
    
    
    722
    
    
    
    
    
    
    
    1,099
    
    
    
    (46,306
    )
    
    
    (44,485
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,649
    )
    
    
    (22,649
    )
    
    $
    (22,649
    )Foreign currency exchange
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )
    
    
    (49
    )Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (22,698
    )Returned of shares to the
company by certain
shareholders
    
    
    (100,338
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase from shareholders
    
    
    (79,579
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    (628
    )
    
    
    
    
    
    
    
    
    
    
    (628
    )Extinguishment of the notes
Accretion to Series B
redeemable convertible
preferred shares redemption
value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,525
    )
    
    
    (3,525
    )Accretion to Series C
redeemable convertible
preferred shares redemption
value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,058
    )
    
    
    (3,058
    )Statuary reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    (36
    )
    
    
    Conversion of Series A to
common shares
    
    
    675,374
    
    
    
    
    
    
    
    (675,374
    )
    
    
    (722
    )
    
    
    722
    
    
    
    
    
    
    
    
    
    
    
    Conversion of Series B to
common shares
    
    
    2,205,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,931
    
    
    
    
    
    
    
    
    
    
    
    26,931Conversion of Series C to
common shares
    
    
    1,712,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,790
    
    
    
    
    
    
    
    
    
    
    
    17,790Conversion of convertible note
to common shares
    
    
    1,712,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,830
    
    
    
    
    
    
    
    
    
    
    
    6,830Reverse acquisition of Ideation
    
    
    12,462,345
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    69,253
    
    
    
    
    
    
    
    
    
    
    
    69,255IDI warrant transferred to
APIC under EITF 07-5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,577
    
    
    
    
    
    
    
    
    
    
    
    1,577Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    411
    
    
    
    
    
    
    
    
    
    
    
    411Balance as of December 31, 2009
    
    
    20,758,368
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    122,922
    
    
    
    1,050
    
    
    
    (75,574
    )
    
    
    48,400Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46,639
    )
    
    
    (46,639
    )
    
    $
    (46,639
    )Foreign currency exchange
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    103Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (46,536
    )Repurchase of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,809
    )
    
    
    
    
    
    
    
    
    
    
    (3,809
    )Exercise of warrants
    
    
    1,460
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9Share issued
    
    
    6,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common shares for
share incentive plan
    
    
    92,583
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    1Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,398
    
    
    
    
    
    
    
    
    
    
    
    2,398Balance as of December 31 2010
    
    
    20,858,661
    
    
    $
    2
    
    
    
    
    
    
    $
    
    
    
    
    121,521
    
    
    $
    1,153
    
    
    $
    (122,213
    )
    
    $
    463
  F-7




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##### Table of Contents



SEARCHMEDIA HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share data)
 For the Years Ended December 31,2008
    
    
    2009
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (35,080
    )
    
    $
    (22,649
    )
    
    $
    (46,639
    )Adjustments to reconcile net income to net cash used in
operating activities:Depreciation and amortization of property and equipment
    
    
    1,268
    
    
    
    399
    
    
    
    404Amortization of intangible assets
    
    
    3,022
    
    
    
    2,015
    
    
    
    1,737Share-based compensation
    
    
    311
    
    
    
    411
    
    
    
    2,398Amortization on discount on convertible notes
    
    
    997
    
    
    
    
    
    
    
    Deferred tax expenses / (benefit)
    
    
    (2,140
    )
    
    
    825
    
    
    
    (817
    )Increase in fair value of note warrant liability
    
    
    
    
    
    
    (824
    )
    
    
    Loss / (gain) on extinguishment of the notes
    
    
    4,400
    
    
    
    (6,669
    )
    
    
    Loss on impairment of goodwill and intangible assets
    
    
    13,953
    
    
    
    15,749
    
    
    
    39,411Loss on impairment of fixed assets
    
    
    2,135
    
    
    
    
    
    
    
    Loss on disposals of fixed assets
    
    
    2,121
    
    
    
    15
    
    
    
    4Bad debt provision on prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    1,006Bad debt provision on accounts receivables
    
    
    703
    
    
    
    1,611
    
    
    
    1,139Changes in operating assets and liabilities, net of
effect of acquisitions for 2008 and 2010 respectively:(Increase) / decrease in assets:Accounts receivable
    
    
    (9,613
    )
    
    
    (4,434
    )
    
    
    (6,004
    )Prepaid expenses and other current assets
    
    
    (4,588
    )
    
    
    1,737
    
    
    
    (4,331
    )Amounts due to/from related parties
    
    
    (2,175
    )
    
    
    417
    
    
    
    1,882Increase / (decrease) in liabilities:Accounts payable
    
    
    6,310
    
    
    
    1,603
    
    
    
    4,882Accrued expenses and other payables
    
    
    11,226
    
    
    
    (1,462
    )
    
    
    2,034Amounts due to/from related parties
    
    
    597
    
    
    
    (252
    )
    
    
    1,612Deferred revenue
    
    
    1,959
    
    
    
    (293
    )
    
    
    579Income taxes payable
    
    
    3,143
    
    
    
    3,026
    
    
    
    2,373Net cash provided by/ (used in) operating activities
    
    
    (1,451
    )
    
    
    (8,775
    )
    
    
    1,670CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (3,460
    )
    
    
    (150
    )
    
    
    (140
    )Proceeds from disposals of property and equipment
    
    
    
    
    
    
    244
    
    
    
    3Cash acquired upon the consideration of a subsidiary
    
    
    
    
    
    
    
    
    
    
    312Cash paid for acquisitions, net of cash acquired
    
    
    (21,244
    )
    
    
    (40,687
    )
    
    
    (20,015
    )Net cash used in investing activities
    
    
    (24,704
    )
    
    
    (40,593
    )
    
    
    (20,152
    )CASH FLOWS FROM FINANCING ACTIVITIESDecrease in restricted bank deposit
    
    
    3,643
    
    
    
    87
    
    
    
    259Proceeds from short-term borrowings
    
    
    1,856
    
    
    
    688
    
    
    
    768Repayment of short-term borrowings
    
    
    (2,084
    )
    
    
    (1,855
    )
    
    
    (693
    )Proceeds from issuance of Series C redeemable
convertible preferred shares and warrants, net of
issuance costs
    
    
    9,261
    
    
    
    
    
    
    
    Proceeds from issuance of convertible promissory notes
and warrants
    
    
    12,000
    
    
    
    3,672
    
    
    
    Proceeds from exercise of options
    
    
    
    
    
    
    
    
    
    
    9Issue of options
    
    
    
    
    
    
    
    
    
    
    1Repayment of promissory note
    
    
    
    
    
    
    (5,000
    )
    
    
    Repurchase of warrants
    
    
    
    
    
    
    
    
    
    
    (3,809
    )Cash from Ideation upon business combination
    
    
    
    
    
    
    76,073
    
    
    
    Net cash provided by/ (used in) financing activities
    
    
    24,676
    
    
    
    73,665
    
    
    
    (3,465
    )Foreign currency translation adjustment
    
    
    242
    
    
    
    5
    
    
    
    103Net increase / (decrease) in cash and cash equivalents
    
    
    (1,237
    )
    
    
    24,302
    
    
    
    (21,844
    )Cash and cash equivalents at beginning of year
    
    
    6,333
    
    
    
    5,096
    
    
    
    29,398Cash and cash equivalents at end of year
    
    $
    5,096
    
    
    $
    29,398
    
    
    $
    7,554SUPPLEMENTAL DISCLOSURE INFORMATIONCash paid for interest
    
    $
    33
    
    
    $
    2,477
    
    
    $
    45Cash paid for income taxes
    
    $
    251
    
    
    $
    381
    
    
    $
    465Non-cash investing transactions:Acquisition consideration payable
    
    $
    12,885
    
    
    $
    16,381
    
    
    $
    39,195Payable in connection with purchase of property and
equipment
    
    $
    414
    
    
    $
    
    
    
    $
    3Non-cash financing transactions:Issuance costs payable in respect of Series C
redeemable convertible preferred shares
    
    $
    98
    
    
    $
    
    
    
    $
    
  F-8




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##### Table of Contents



SEARCHMEDIA HOLDINGS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share data)
 1. Principal activities, organization and basis of presentation
 (a) Principal activities
  VIEs arrangements
       (b) 2009 reorganization and accounting treatment
   F-9




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##### Table of Contents



Business Combinations)
 Business Combinations
 (c) Organization and basis of presentation
  Consolidation
   Name of entity
    
    Place of incorporationShanghai Jincheng Advertising Co., Ltd. (Jincheng)
    
    PRCShaanxi Xinshichuang Advertising Planning Co., Ltd. (Xinshichuang)
    
    PRCBeijing Wanshuizhiyuan Advertising Co., Ltd. (Wanshuizhiyuan)
    
    PRCShenyang Jingli Advertising Co., Ltd. (Shenyang Jingli)
    
    PRCQingdao Kaixiang Advertising Co., Ltd. (Kaixiang)
    
    PRCShanghai Haiya Advertising Co., Ltd. (Haiya)
    
    PRCTianjin Shengshitongda Advertising Creativity Co., Ltd. (Shengshitongda)
    
    PRCShanghai Botang Advertising Co., Ltd. (Botang)
    
    PRCAd-Icon Company Limited (HK Ad-Icon)
    
    HKSARChangsha Jingli Advertising Co., Ltd. (Changsha Jingli)
    
    PRCWenzhou Rigao Advertising Co., Ltd. (Wenzhou Rigao)
    
    PRCWuxi Ruizhong Advertising Co., Ltd. (Wuxi Ruizhong)
    
    PRCZhejiang Continental Advertising Co., Ltd. (Zhejiang Continental)
    
    PRC
 F-10




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##### Table of Contents



(d) Reclassification
  2. Summary of significant accounting policies
 (a) Basis of preparation
  Principles of consolidation
  Going concern
    1)
    
    Negotiation with subsidiaries ex-owners to extend earn-out
payment period by one or more than one year for required cash and
stock payment;
 2)
    
    The Company is seeking additional financing from existing shareholders and external
investors;
  F-11




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##### Table of Contents



(b) Use of estimates
  (c) Foreign currency transactions and translation
    (d) Cash and cash equivalents
    (e) Restricted cash
  F-12




---



##### Table of Contents



(f) Accounts receivable
  (g) Property and equipment
  Leasehold improvements
    
    1 to 3 yearsAdvertisement display equipment
    
    5 yearsFurniture, fixtures and office equipment
    
    5 yearsMotor vehicles
    
    5 years
  (h) Intangible assets
  (i) Goodwill
 Intangibles  Goodwill and Other
  a.
    
    The aggregate of the following:
 1.
    
    The consideration transferred measured in accordance ASC 805, which generally requires
acquisition-date fair value.2.
    
    The fair value of any noncontrolling interest in the acquiree.3.
    
    In a business combination achieved in stages, the acquisition-date fair value of the
acquirers previously held equity interest in the acquiree.
 b.
    
    The net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed measured in accordance with ASC 805.
  F-13




---



##### Table of Contents



(j) Impairment of long-lived assets
  
    
    a significant adverse change in the business climate or legal factors;
    
    an adverse action or assessment by a regulator;
    
    unanticipated competition;
    
    loss of key personnel;
    
    the likelihood that a reporting unit or a significant portion of a reporting unit will
be sold or disposed of;
    
    a change in reportable segments; and/or results of testing for recoverability of a
significant asset group within a reporting unit.
    Impairment or Disposal of Long-Lived Assets
    F-14




---



##### Table of Contents



(k) Fair Value of Financial Instruments
   
    
    Level 1  defined as observable inputs such as quoted prices in active markets;
    
    Level 2  defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and
    
    Level 3  defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.
  (l) Revenue recognition
    (m) Cost of revenues
  (n) Operating leases
  (o) Advertising and promotion costs
  (p) Retirement and other post-retirement benefits
   F-15




---



##### Table of Contents



(q) Share-based payments
 CompensationStock
Compensation
 (r) Income taxes
  Income Taxes
 (s) Earnings/(loss) per share
   (t) Segment reporting
 Segment Reporting
 (u) Significant concentrations and risks
  F-16




---



##### Table of Contents



(v) Recently issued accounting standards
        F-17




---



##### Table of Contents



3. Loss per share
  2008
    
    
    2009
    
    
    2010Numerator:Net Loss
    
    $
    (35,080
    )
    
    $
    (22,649
    )
    
    $
    (46,639
    )Denominator:Weighted average shares
outstanding  Basic and diluted
    
    
    2,169,269
    
    
    
    5,100,465
    
    
    
    20,796,789Loss per share  Basic and diluted
    
    $
    (0.0162
    )
    
    $
    (0.0044
    )
    
    $
    (0.0022
    )
  4. Acquisitions
 I. 2010 acquisition
   Assets acquired:Cash
    
    $
    302Accounts receivable
    
    
    1,706Prepaid expenses and other current assets
    
    
    453Property and equipment
    
    
    21Intangible assets
    
    $
    4,282Total
    
    $
    6,764Liabilities assumed:Accounts payable
    
    
    (143
    )Accrued expenses and other payables
    
    
    (823
    )Amounts due to related parties
    
    
    (2,412
    )Income taxes payable
    
    
    (423
    )Deferred tax liability
    
    
    (1,070
    )Total
    
    $
    (4,871
    )Goodwill
    
    $
    17,805Total consideration
    
    $
    19,698
 F-18




---



##### Table of Contents



AmortizationPeriod(Years)Intangible assets comprised of:Customer relationship
    
    $
    1,067
    
    
    
    3.4Lease agreements
    
    
    2,749
    
    
    
    4.4Non-compete agreement
    
    
    462
    
    
    
    3.4Assembled workforce
    
    
    4
    
    
    
    N/ATotal
    
    $
    4,282
    II. 2008 acquisitions
     F-19




---



##### Table of Contents



Acquired Intangible
    
    
    
    
    
    
    Goodwill recognizedConsideration paid up
    
    
    Fair value
    
    
    Assets
    
    
    Deferred
    
    
    during the year endedto December 31,
    
    
    of net asset
    
    
    Customer
    
    
    Lease
    
    
    Non-compete
    
    
    tax liability
    
    
    December 31,Acquired Entity
    
    Date Acquired
    
    Business
    
    2009
    
    
    2010
    
    
    acquired
    
    
    relationship
    
    
    agreements
    
    
    agreements
    
    
    recognized
    
    
    2009
    
    
    2010Xinshichuang
    
    January 1, 2008
    
    Poster frame
    
    $
    952
    
    
    $
    981
    
    
    $
    10
    
    
    $
    7
    
    
    $
    157
    
    
    $
    
    
    
    $
    41
    
    
    $
    
    
    
    $
    Jincheng
    
    January 1, 2008
    
    Poster frame
    
    
    923
    
    
    
    997
    
    
    
    (117
    )
    
    
    2
    
    
    
    94
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    Kaixiang
    
    January 1, 2008
    
    Billboard
    
    
    6,760
    
    
    
    7,423
    
    
    
    88
    
    
    
    134
    
    
    
    264
    
    
    
    
    
    
    
    99
    
    
    
    6,628
    
    
    
    2,309Wanshuizhiyuan
    
    January 1, 2008
    
    Billboard
    
    
    8,725
    
    
    
    8,996
    
    
    
    70
    
    
    
    199
    
    
    
    220
    
    
    
    
    
    
    
    105
    
    
    
    2,207
    
    
    
    225Shenyang Jingli
    
    January 1, 2008
    
    Billboard
    
    
    13,322
    
    
    
    15,853
    
    
    
    229
    
    
    
    686
    
    
    
    812
    
    
    
    
    
    
    
    374
    
    
    
    2,482
    
    
    
    3,205Haiya
    
    February 1, 2008
    
    Transit
    
    
    5,345
    
    
    
    5,662
    
    
    
    (186
    )
    
    
    29
    
    
    
    1,037
    
    
    
    
    
    
    
    267
    
    
    
    5,988
    
    
    
    1,755Botang
    
    April 1, 2008
    
    Billboard
    
    
    20,851
    
    
    
    32,302
    
    
    
    145
    
    
    
    1,070
    
    
    
    1,968
    
    
    
    
    
    
    
    759
    
    
    
    23,699
    
    
    
    6,442HK Ad-icon
    
    April 1, 2008
    
    Billboard
    
    
    1,557
    
    
    
    1,545
    
    
    
    9
    
    
    
    148
    
    
    
    105
    
    
    
    
    
    
    
    42
    
    
    
    1,294
    
    
    
    897Shengshitongda
    
    April 1, 2008
    
    Poster frame
    
    
    117
    
    
    
    121
    
    
    
    7
    
    
    
    2
    
    
    
    18
    
    
    
    
    
    
    
    5
    
    
    
    116
    
    
    
    (21
    )Wenzhou Rigao
    
    July 1, 2008
    
    Poster frame
    
    
    3,219
    
    
    
    4,527
    
    
    
    (95
    )
    
    
    102
    
    
    
    149
    
    
    
    
    
    
    
    63
    
    
    
    4,904
    
    
    
    2,806Wuxi Ruizhong
    
    July 1, 2008
    
    Poster frame
    
    
    1,087
    
    
    
    2,593
    
    
    
    33
    
    
    
    32
    
    
    
    173
    
    
    
    
    
    
    
    51
    
    
    
    1,354
    
    
    
    2,958Zhejiang Continental
    
    June 1, 2010
    
    Billboard
    
    
    
    
    
    
    2,340
    
    
    
    1,319
    
    
    
    1,100
    
    
    
    2,834
    
    
    
    480
    
    
    
    1,104
    
    
    
    
    
    
    
    18,358Total
    
    
    
    
    
    $
    62,858
    
    
    $
    83,340
    
    
    $
    1,512
    
    
    $
    3,511
    
    
    $
    7,831
    
    
    $
    480
    
    
    $
    2,934
    
    
    $
    48,672
    
    
    $
    38,934
  F-20




---



##### Table of Contents



Unaudited pro forma financial information
  Year ended December 31, 2008
    
    Year ended December 31, 2010Advertising service revenues
    
    $
    47,794
    
    
    $
    51,388Income/(loss) from operations
    
    
    14,275
    
    
    
    (3,344
    )Net loss
    
    $
    (39,729
    )
    
    $
    (45,232
    )
 5. Accounts receivable, net
  As of December 31,2009
    
    
    2010Accounts receivable
    
    $
    15,321
    
    
    $
    21,259Less allowance for doubtful accounts
    
    
    (2,325
    )
    
    
    (3,194
    )Accounts receivable, net
    
    $
    12,996
    
    
    $
    18,065
   As of December 31,2009
    
    
    2010Beginning allowance for doubtful accounts
    
    $
    712
    
    
    $
    2,325Effect of foreign currency translation
    
    
    2
    
    
    
    89Additions charged to bad debt expense
    
    
    1,611
    
    
    
    1,171Write-back of bad debt expense
    
    
    
    
    
    
    (391
    )Ending allowance for doubtful accounts
    
    $
    2,325
    
    
    $
    3,194
 6. Prepaid expenses and other current assets
  As of December 31,2009
    
    
    2010Prepaid rent
    
    $
    1,939
    
    
    $
    5,651Other prepaid expenses
    
    
    1,060
    
    
    
    82Rental deposits and other receivables
    
    
    1,657
    
    
    
    2,607Total prepaid expenses and other current assets
    
    $
    4,656
    
    
    $
    8,340
  7. Property and equipment, net
  As of December 31,2009
    
    
    2010Leasehold improvements
    
    $
    94
    
    
    $
    114Advertising display equipment
    
    
    1,410
    
    
    
    1,378Furniture, fixtures and office equipment
    
    
    597
    
    
    
    793Motor vehicles
    
    
    54
    
    
    
    30Total cost of property and equipment
    
    
    2,155
    
    
    
    2,315Less: accumulated depreciation and amortization
    
    
    (750
    )
    
    
    (1,182
    )Property and equipment, net
    
    $
    1,405
    
    
    $
    1,133
 F-21




---



##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010Cost of revenues
    
    $
    950
    
    
    $
    233
    
    
    $
    232Selling and marketing expenses
    
    
    
    
    
    
    
    
    
    
    33General and administrative expenses
    
    
    318
    
    
    
    166
    
    
    
    139Total depreciation and amortization
    
    $
    1,268
    
    
    $
    399
    
    
    $
    404
 8. Goodwill and other intangible assets
  Xinshi
    
    
    
    
    
    
    Wanshui
    
    
    Shenyang
    
    
    
    
    
    
    Shengshi
    
    
    
    
    
    
    Wenzhou
    
    
    Wuxi
    
    
    HK
    
    
    ZhejiangSige(1)
    
    
    Jincheng
    
    
    chuang
    
    
    Kaixiang
    
    
    zhiyuan
    
    
    Jingli
    
    
    Haiya
    
    
    tongda
    
    
    Botang
    
    
    Rigao
    
    
    Ruizhong
    
    
    Ad-Icon
    
    
    Continental
    
    
    TotalBalance as of January 1, 2009
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,682
    
    
    $
    5,803
    
    
    $
    1,470
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    12,955Goodwill acquired during the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,628
    
    
    
    2,207
    
    
    
    2,482
    
    
    
    5,988
    
    
    
    116
    
    
    
    23,699
    
    
    
    4,904
    
    
    
    1,354
    
    
    
    1,294
    
    
    
    
    
    
    
    48,672Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,397
    )
    
    
    (1,640
    )
    
    
    (2,130
    )
    
    
    
    
    
    
    (9,582
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,749
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13Balance as of December 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,316
    
    
    
    5,619
    
    
    
    2,313
    
    
    
    3,858
    
    
    
    116
    
    
    
    14,117
    
    
    
    4,904
    
    
    
    1,354
    
    
    
    1,294
    
    
    
    
    
    
    
    45,891Goodwill acquired during the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,358
    
    
    
    18,358Goodwill recorded as a result of
contingent consideration
resolved under ASC Topic 805-20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,309
    
    
    
    225
    
    
    
    3,205
    
    
    
    1,755
    
    
    
    (21
    )
    
    
    6,442
    
    
    
    2,806
    
    
    
    2,958
    
    
    
    897
    
    
    
    
    
    
    
    20,576Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,230
    )
    
    
    (2,674
    )
    
    
    (3,832
    )
    
    
    (5,608
    )
    
    
    (97
    )
    
    
    (8,864
    )
    
    
    (5,169
    )
    
    
    (1,286
    )
    
    
    (1,651
    )
    
    
    
    
    
    
    (39,411
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    114
    
    
    
    (14
    )
    
    
    (5
    )
    
    
    2
    
    
    
    241
    
    
    
    38
    
    
    
    14
    
    
    
    (3
    )
    
    
    
    
    
    
    541Balance as of December 31, 2010
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,549
    
    
    $
    3,284
    
    
    $
    1,672
    
    
    $
    
    
    
    $
    
    
    
    $
    11,936
    
    
    $
    2,579
    
    
    $
    3,040
    
    
    $
    537
    
    
    $
    18,358
    
    
    $
    45,955
 
 (1)
    
    Shanghai Sige Advertising and Media Company Limited  Xinshi
    
    
    
    
    
    
    Wanshui
    
    
    Shenyang
    
    
    
    
    
    
    Shengshi
    
    
    
    
    
    
    Wenzhou
    
    
    Wuxi
    
    
    HK
    
    
    ZhejiangSige
    
    
    Jincheng
    
    
    chuang
    
    
    Kaixiang
    
    
    zhiyuan
    
    
    Jingli
    
    
    Haiya
    
    
    tongda
    
    
    Botang
    
    
    Rigao
    
    
    Ruizhong
    
    
    Ad-Icon
    
    
    Continental
    
    
    TotalGoodwill, gross
    
    $
    1,117
    
    
    $
    1,072
    
    
    $
    969
    
    
    $
    12,316
    
    
    $
    9,644
    
    
    $
    12,276
    
    
    $
    5,988
    
    
    $
    116
    
    
    $
    23,699
    
    
    $
    4,904
    
    
    $
    1,354
    
    
    $
    1,294
    
    
    $
    
    
    
    $
    74,749Accumulated impairment losses
    
    
    (1,117
    )
    
    
    (1,072
    )
    
    
    (969
    )
    
    
    
    
    
    
    (4,025
    )
    
    
    (9,963
    )
    
    
    (2,130
    )
    
    
    
    
    
    
    (9,582
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,858
    )Balance as of December 31, 2009
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    12,316
    
    
    $
    5,619
    
    
    $
    2,313
    
    
    $
    3,858
    
    
    $
    116
    
    
    $
    14,117
    
    
    $
    4,904
    
    
    $
    1,354
    
    
    $
    1,294
    
    
    $
    
    
    
    $
    45,891Goodwill, gross
    
    $
    1,151
    
    
    $
    1,106
    
    
    $
    999
    
    
    $
    15,007
    
    
    $
    10,168
    
    
    $
    15,862
    
    
    $
    7,929
    
    
    $
    99
    
    
    $
    30,877
    
    
    $
    7,862
    
    
    $
    4,354
    
    
    $
    2,187
    
    
    $
    18,358
    
    
    $
    115,959Accumulated impairment losses
    
    
    (1,151
    )
    
    
    (1,106
    )
    
    
    (999
    )
    
    
    (10,458
    )
    
    
    (6,884
    )
    
    
    (14,190
    )
    
    
    (7,929
    )
    
    
    (99
    )
    
    
    (18,941
    )
    
    
    (5,283
    )
    
    
    (1,314
    )
    
    
    (1,650
    )
    
    
    
    
    
    
    (70,004
    )Balance as of December 31, 2010
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,549
    
    
    $
    3,284
    
    
    $
    1,672
    
    
    $
    
    
    
    $
    
    
    
    $
    11,936
    
    
    $
    2,579
    
    
    $
    3,040
    
    
    $
    537
    
    
    $
    18,358
    
    
    $
    45,955
  F-22




---



##### Table of Contents



Goodwill impairment in 2009
  Goodwill impairment in 2010
   Intangible assets other than goodwill consist of the following:
 Weighted average
    
    As of December 31,amortization period
    
    2009
    
    
    2010Gross amountCustomer relationship
    
    0.5-3.4 years
    
    $
    2,343
    
    
    $
    3,511Lease agreements
    
    1-4.4 years
    
    
    4,849
    
    
    
    7,831Non-compete agreements
    
    3.4 years
    
    
    
    
    
    
    4807,192
    
    
    
    11,822Accumulated amortizationCustomer relationship
    
    
    
    
    (2,135
    )
    
    
    (2,584
    )Lease agreements
    
    
    
    
    (2,854
    )
    
    
    (4,242
    )Non-compete agreements
    
    
    
    
    
    
    
    
    (86
    )(4,989
    )
    
    
    (6,912
    )Accumulated impairmentCustomer relationship
    
    
    
    
    (15
    )
    
    
    (16
    )Lease agreements
    
    
    
    
    (912
    )
    
    
    (940
    )Non-compete agreements
    
    
    
    
    
    
    
    
    (927
    )
    
    
    (956
    )Net intangible assetsCustomer relationship
    
    
    
    
    193
    
    
    
    911Lease agreements
    
    
    
    
    1,083
    
    
    
    2,649Non-compete agreements
    
    
    
    
    
    
    
    
    394$
    1,276
    
    
    $
    3,954
  F-23




---



##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010Cost of revenues
    
    $
    1,542
    
    
    $
    1,379
    
    
    $
    1,273Sales and marketing expenses
    
    
    1,480
    
    
    
    636
    
    
    
    462Total amortization expenses
    
    $
    3,022
    
    
    $
    2,015
    
    
    $
    1,735
  2011
    
    $
    1,2972012
    
    
    1,1082013
    
    
    1,0232014
    
    
    526Thereafter
    
    
    Total
    
    $
    3,954
 9. Accrued expenses and other payables
  As of December 31,2009
    
    
    2010Accrued payroll and staff benefits
    
    $
    2,559
    
    
    $
    1,926Accrued professional fee
    
    
    2,852
    
    
    
    1,044Business tax and surcharges payable
    
    
    7,074
    
    
    
    9,076Contingent liabilities (Note 18(c))
    
    
    844
    
    
    
    2,602Accrued liabilities for abandonment of lease
    
    
    597
    
    
    
    1,900Other accrued liabilities
    
    
    1,972
    
    
    
    1,383Total accrued expenses and other payables
    
    $
    15,898
    
    
    $
    17,931
 10. Short-term borrowings
 Balances as of December 31, 2009
  Balances as of December 31, 2010
  F-24




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11. Common shares and warrants
 Common shares
  Warrants
     12. Share-based payments
   F-25




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##### Table of Contents



(a) Share options
  Weighted
    
    
    Weightedaverage
    
    
    averageexercise
    
    
    remainingNumber of
    
    
    price per
    
    
    contractual
    
    Aggregateoptions
    
    
    share
    
    
    term
    
    fair valueBalance as of January 1, 2009
    
    
    8,840,000
    
    
    $
    0.79
    
    
    
    
    $
    432Granted
    
    
    1,650,000
    
    
    
    0.53
    
    
    
    
    
    33Forfeited
    
    
    (4,215,000
    )
    
    
    0.69
    
    
    
    
    
    (149
    )Balance as of October 30, 2009
    
    
    6,275,000Converted into IDI options
    
    
    423,797
    
    
    
    3.19
    
    
    
    
    
    1,253Balance as of December 31, 2009
    
    
    423,797
    
    
    
    3.19Granted
    
    
    770,000
    
    
    
    5.47
    
    
    
    
    
    1,924Exercised
    
    
    (86,673
    )
    
    
    0.01
    
    
    
    
    
    (345
    )Forfeited
    
    
    (102,263
    )
    
    
    2.69
    
    
    
    
    
    (316
    )Balance as of December 31, 2010
    
    
    1,004,861
    
    
    
    2.13
    
    
    8.6 yearsOptions exercisable at December 31, 2010
    
    
    191,497
    
    
    
    3.91
    
    
    8.8 years
  Options granted to employee:
    
    2009
    
    
    2010Risk-free rate of return
    
    
    3.43
    %
    
    
    2.744%-4.142
    %Weighted average expected option life
    
    10 years
    
    10 yearsExpected volatility rate
    
    
    40.30
    %
    
    
    64.00
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
  CompensationStock Compensation
 CompensationStock
Compensation
  F-26




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##### Table of Contents



(b) Restricted share units
  WeightedaverageNumber of
    
    
    
    
    
    
    remainingrestricted share
    
    
    Grant-date
    
    
    contractualunits granted
    
    
    fair value
    
    
    termBalance as of January 1, 2009
    
    
    3,867,000Granted
    
    
    3,000,000
    
    
    
    297Forfeitures
    
    
    Balance as of October 30, 2009
    
    
    6,867,000Converted into IDI restricted shares
    
    
    463,779
    
    
    
    1,572Balance as of December 31, 2009
    
    
    463,779Granted
    
    
    100,000
    
    
    
    605Exercised
    
    
    (5,910
    )Forfeitures
    
    
    (204,604
    )Balance as of December 31, 2010
    
    
    353,265
    
    
    
    
    
    
    8.6 yearsUnits vested as of December 31, 2010
    
    
    81,045
    
    
    
    
    
    
    7.5 years
   F-27




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##### Table of Contents



13. Statutory reserve
  14. Related party transactions and balances
 (a) Related party transactions
  Years Ended December 31,Note
    
    2008
    
    
    2009
    
    
    2010Revenue from provision of advertising services
    
    (i)
    
    $
    3,242
    
    
    $
    2,910
    
    
    $
    55Expenses for leases of advertising space
    
    (ii)
    
    $
    540
    
    
    $
    1,515
    
    
    $
    643
    F-28




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##### Table of Contents



(b) Amounts due from / to related parties are analyzed as follows:
 As of December 31,Note
    
    2009
    
    
    2010Customer payments collected on behalf of the Group
    
    (i)
    
    $
    2,018
    
    
    $
    Receivables for provision of advertising services
    
    (ii)
    
    
    453
    
    
    
    Advances to ex-owners of acquired companies
    
    (iii)
    
    
    369
    
    
    
    966Due from related parties
    
    
    
    $
    2,840
    
    
    $
    966Operating expenses paid on behalf of the Group
    
    (iv)
    
    $
    195
    
    
    $
    1,905Payables for the lease of advertising space
    
    (v)
    
    
    151
    
    
    
    53Due to related parties
    
    
    
    $
    346
    
    
    $
    1,958
       F-29




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##### Table of Contents



15. Interest expense
 Years Ended December 31,2008
    
    
    2009
    
    
    2010Bank loan interest
    
    $
    34
    
    
    $
    27
    
    
    $
    45Convertible promissory notes interest
    
    
    720
    
    
    
    962
    
    
    
    Interest on New Note, First Interim Notes and short-term
loan from a third party lender
    
    
    617
    
    
    
    973
    
    
    
    Amortization of convertible promissory notes issuance costs
    
    
    349
    
    
    
    
    
    
    
    Amortization of convertible promissory notes discount
    
    
    997
    
    
    
    
    
    
    
    Total interest expense
    
    $
    2,717
    
    
    $
    1,962
    
    
    $
    45
 16. Income taxes
 Cayman Islands
  Peoples Republic of China
   Hong Kong
  F-30




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##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010Current tax- PRC
    
    $
    3,549
    
    
    $
    3,460
    
    
    $
    2,212- HK
    
    
    72
    
    
    
    34
    
    
    
    25Deferred tax- PRC
    
    
    (2,123
    )
    
    
    808
    
    
    
    (813
    )- HK
    
    
    (17
    )
    
    
    17
    
    
    
    (4
    )Total income tax expense
    
    $
    1,481
    
    
    $
    4,319
    
    
    $
    1,420
  Years Ended December 31,2008
    
    
    2009
    
    
    2010Computed expected tax expense
    
    $
    (8,399
    )
    
    $
    (4,582
    )
    
    $
    (11,305
    )Effect of differential tax rate on
income of Ad-Icon
    
    
    (29
    )
    
    
    (26
    )
    
    
    (13
    )Effect of non-PRC entities not
subject to income tax
    
    
    2,616
    
    
    
    1,748
    
    
    
    1,279Non-deductible expenses
    
    
    4,429
    
    
    
    5,267
    
    
    
    9,778Tax loss which no deferred tax
asset was recognized
    
    
    2,864
    
    
    
    3,278
    
    
    
    1,369Tax loss that is expired
    
    
    
    
    
    
    509
    
    
    
    Income not subject to tax
    
    
    
    
    
    
    (1,875
    )
    
    
    (40
    )Change in valuation allowance
    
    
    
    
    
    
    
    
    
    
    352Actual income tax expense
    
    $
    1,481
    
    
    $
    4,319
    
    
    $
    1,420
   Years Ended December 31,2008
    
    
    2009
    
    
    2010Deferred tax assets-current:- Property and equipment
    
    $
    1,069
    
    
    $
    
    
    
    $
    - Tax loss carried forwards of a subsidiary
    
    
    46
    
    
    
    23
    
    
    
    89- Allowance for doubtful accounts
    
    
    157
    
    
    
    430
    
    
    
    802- Accrued expenses
    
    
    16
    
    
    
    27
    
    
    
    1,288
    
    
    
    480
    
    
    
    891Deferred tax liabilities  non-current:Intangible assets
    
    
    (808
    )
    
    
    (316
    )
    
    
    (989
    )Net deferred tax assets
    
    $
    480
    
    
    $
    164
    
    
    $
    (98
    )
 F-31




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17. Employee benefit plans
    18. Commitments and contingencies
 (a) Operating lease commitments
  F-32




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##### Table of Contents



Years Ended December 31,2009
    
    
    2010Cost of revenues
    
    $
    24,386
    
    
    $
    33,301Selling and marketing expenses
    
    
    
    
    
    
    8General and administrative expenses
    
    
    1,595
    
    
    
    484Total rental expenses
    
    $
    25,981
    
    
    $
    33,793
  Year2011
    
    $
    15,8982012
    
    
    3,9472013
    
    
    1,0322014
    
    
    2192015
    
    
    12Thereafter
    
    
    $
    21,108
 (b) Capital commitment
  (c) Contingency
  19. Subsequent events
        Sid Murdeshwar, Individually and on Behalf of
All Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition
Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E.
Beier, David H. Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer
Huang, Defendants
 Hymie Akst, Individually and on Behalf of All
Others Similarly Situated, Plaintiff v. SearchMedia Holdings Limited f/k/a Ideation Acquisition
Corp., Robert N. Fried, Phillip Frost, Rao Uppaluri, Steven D. Rubin, Glenn Halpryn, Thomas E.
Beier, David H.  Moskowitz, Shawn Gold, Garbo Lee, Paul Conway, Qinying Liu, Earl Yen, and Jennifer Huang,
Defendants
 Murdeshwar Akst Murdeshwar
 
  F-33