##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
 For the transition period from  to
 Commission file number 001-33800
 Ideation Acquisition Corp.
  Delaware(State or other jurisdiction of 
incorporation or organization)
    
    77-0688094
(I.R.S. Employer Identification No.)1990 South Bundy Boulevard, Suite 620
Los Angeles, California
(Address of principal executive offices)
    
    90025
(Zip code)
 
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  þ o




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TABLE OF CONTENTS
 PagePART 1 FINANCIAL INFORMATION
    
    
    2ITEM 1 FINANCIAL STATEMENTS
    
    
    2UNAUDITED CONDENSED BALANCE SHEETS AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
    
    
    2UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE
30, 2008 AND THE PERIOD FROM JUNE 1, 2007 (DATE OF INCEPTION) THROUGH JUNE 30, 2008
    
    
    3UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2008
AND FOR THE PERIOD FROM JUNE 1, 2007 (DATE OF INCEPTION) THROUGH JUNE 30, 2008
(UNAUDITED)
    
    
    4NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    5ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    
    
    12ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    15ITEM 4. CONTROLS AND PROCEDURES
    
    
    15PART II OTHER INFORMATION
    
    
    16ITEM 1. LEGAL PROCEEDINGS
    
    
    16ITEM 1A. RISK FACTORS
    
    
    16ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    16ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    16ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    16ITEM 5. OTHER INFORMATION
    
    
    16ITEM 6. EXHIBITS
    
    
    16SIGNATURES
    
    
    17EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
  i




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##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 
 Unaudited Condensed Balance Sheets
 June 30, 2008
    
    
    December 31, 2007AssetsCurrent Assets:Cash and cash equivalents
    
    $
    394,241
    
    
    $
    124,139Interest receivable
    
    
    136,275
    
    
    
    291,835Income Taxes Receivable
    
    
    92,690
    
    
    
    Franchise Taxes Receivable
    
    
    30,702
    
    
    
    Other current assets
    
    
    61,640
    
    
    
    49,256Total current assets
    
    
    715,548
    
    
    
    465,230Other asset, cash and cash equivalents held in trust
    
    
    78,815,000
    
    
    
    78,815,000Deferred tax asset
    
    
    135,224
    
    
    
    Total assets
    
    $
    79,665,772
    
    
    $
    79,280,230Liabilities and Stockholders EquityCurrent Liabilities:Accrued expenses
    
    $
    50,757
    
    
    $
    26,721Income taxes payable
    
    
    
    
    
    
    74,244Franchise taxes payable
    
    
    
    
    
    
    68,666Total current liabilities
    
    
    50,757
    
    
    
    169,631Long-term liabilityDeferred underwriters fee
    
    
    2,730,000
    
    
    
    2,730,000Common stock subject to possible redemption
(2,999,999 shares at June 30, 2008 and December 31, 2007
at redemption value of $7.88 per share)
    
    
    23,639,992
    
    
    
    23,639,992Commitments and contingenciesStockholders Equity:Preferred Stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstandingCommon Stock, $0.0001 par value, 50,000,000 shares authorized, 12,500,000 shares
issued and outstanding including 2,999,999 shares subject to possible redemption,
at June 30, 2008 and December 31, 2007
    
    
    1,250
    
    
    
    1,250Additional paid-in capital
    
    
    52,595,237
    
    
    
    52,595,237Income accumulated during the development stage
    
    
    648,536
    
    
    
    144,120Total stockholders equity
    
    
    53,245,023
    
    
    
    52,740,607Total liabilities and stockholders equity
    
    $
    79,665,772
    
    
    $
    79,280,230
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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 
 Unaudited Condensed Statements of Operations
 For the Three
    
    
    Period from June 1
    
    
    For the six
    
    
    Period from June 1,Months Ended
    
    
    2007 (inception) to
    
    
    Months Ended
    
    
    2007 (Inception) toJune 30, 2008
    
    
    June 30, 2007
    
    
    June 30, 2008
    
    
    June 30, 2008Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Formation and operating costs
    
    
    114,306
    
    
    
    5,000
    
    
    
    286,079
    
    
    
    386,956Loss from operations
    
    
    (114,306
    )
    
    
    (5,000
    )
    
    
    (286,079
    )
    
    
    (386,956
    )Interest income
    
    
    438,450
    
    
    
    
    
    
    
    1,124,459
    
    
    
    1,464,876Income (Loss) before provision for income taxes (benefit)
    
    
    324,144
    
    
    
    (5,000
    )
    
    
    838,380
    
    
    
    1,077,920Provision for income taxes (benefit)Current
    
    
    174,654
    
    
    
    
    
    
    
    469,188
    
    
    
    564,608Deferred
    
    
    (45,533
    )
    
    
    
    
    
    
    (135,224
    )
    
    
    (135,224
    )Total provision for income taxes
    
    
    129,121
    
    
    
    
    
    
    
    333,964
    
    
    
    429,384Net income (Loss)
    
    $
    195,023
    
    
    $
    (5,000
    )
    
    $
    504,416
    
    
    $
    648,536Maximum number of shares subject to possible redemption:Weighted average number of shares, basic and diluted
    
    
    2,999,999
    
    
    
    
    
    
    
    2,999,999
    
    
    
    1,681,233Income (Loss) per share amount, basic and diluted
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Weighted average number of common shares outstanding
(not subject to possible redemption):Basic
    
    
    9,500,001
    
    
    
    1,462,833
    
    
    
    9,500,001
    
    
    
    6,353,536Diluted
    
    
    11,623,758
    
    
    
    1,462,833
    
    
    
    11,559,844
    
    
    
    8,403,601Income per share amount:Basic
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.05
    
    
    $
    0.10Diluted
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.04
    
    
    $
    0.08
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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 
 Unaudited Condensed Statements of Cash Flows
 For the Six
    
    
    Period from June 1
    
    
    Period from June 1,Months Ended
    
    
    2007 (inception) to
    
    
    2007 (Inception) toJune 30, 2008
    
    
    June 30, 2007
    
    
    June 30, 2008Cash flows from operating activities:Net income (loss)
    
    $
    504,416
    
    
    $
    (5,000
    )
    
    $
    648,536Adjustments to reconcile net income to net cash (used in)
provided by operating activities:Deferred tax assets
    
    
    (135,224
    )
    
    
    
    
    
    
    (135,224
    )Changes in operating assets and liabilities:Interest receivable
    
    
    155,560
    
    
    
    
    
    
    
    (136,275
    )Income Taxes Receivable
    
    
    (92,690
    )
    
    
    
    
    
    
    (92,690
    )Franchise Taxes Receivable
    
    
    (30,702
    )
    
    
    
    
    
    
    (30,702
    )Other current assets
    
    
    (12,384
    )
    
    
    (60,380
    )
    
    
    (61,640
    )Accrued expenses
    
    
    24,036
    
    
    
    52,480
    
    
    
    50,757Income taxes payable
    
    
    (74,244
    )
    
    
    
    
    
    
    Franchise taxes payable
    
    
    (68,666
    )
    
    
    
    
    
    
    Net cash (used in) provided by operating activities
    
    
    270,102
    
    
    
    (12,900
    )
    
    
    242,762Net cash used in investing activities:Cash and cash equivalents held in Trust Account
    
    
    
    
    
    
    
    
    
    
    (78,815,000
    )Cash flows from financing activities:Proceeds from notes payable to stockholders
    
    
    
    
    
    
    200,000
    
    
    
    200,000Proceeds from common shares issued to founders
    
    
    
    
    
    
    25,000
    
    
    
    25,000Proceeds from public offering
    
    
    
    
    
    
    
    
    
    
    80,000,000Proceeds from issuance of insider warrants
    
    
    
    
    
    
    
    
    
    
    2,400,000Repayment of notes payable to stockholders
    
    
    
    
    
    
    
    
    
    
    (200,000
    )Payment of underwriters discount and offering
    
    
    
    
    
    
    
    
    
    
    (3,458,521
    )Net cash provided by financing activities
    
    
    
    
    
    
    225,000
    
    
    
    78,966,479Net increase in cash
    
    
    270,102
    
    
    
    212,100
    
    
    
    394,241Cash and cash equivalents, beginning of period
    
    
    124,139
    
    
    
    
    
    
    
    Cash and cash equivalents, end of period
    
    $
    394,241
    
    
    $
    212,100
    
    
    $
    394,241Supplemental disclosures:Non-cash accrued offering costs
    
    $
    
    
    
    $
    30,000
    
    
    $
    Non-cash deferred underwriters fees
    
    $
    
    
    
    $
    
    
    
    $
    2,730,000Cash paid for income taxes
    
    $
    685,000
    
    
    $
    
    
    
    $
    685,000
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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 Note 1  Organization and Nature of Business Operations
      5




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
     Note 2 Summary of Significant Accounting Policies
 Basis of presentation
  Concentration of Credit Risk
  Cash and cash equivalents
  6




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
 Preferred Stock
  Net Income per Common Share
   New Accounting Pronouncements
   Redeemable common stock
  7




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
 Note 3  Initial Public Offering
   Note 4  Related Party Transactions
      8




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
  Note 5  Income taxes
    For the Three
    
    
    For the Six
    
    
    Period from June 1,Months Ended
    
    
    Months Ended
    
    
    2007 (Inception) toJune 30, 2008
    
    
    June 30, 2008
    
    
    June 30, 2008Current Tax ProvisionFederal
    
    $
    135,895
    
    
    $
    365,066
    
    
    $
    439,310State
    
    
    38,759
    
    
    
    104,122
    
    
    
    125,298Total Current
    
    
    174,654
    
    
    
    469,188
    
    
    
    564,608Deferred Tax Provision:Federal
    
    
    (35,428
    )
    
    
    (105,215
    )
    
    
    (105,215
    )State
    
    
    (10,105
    )
    
    
    (30,009
    )
    
    
    (30,009
    )Total Deferred
    
    $
    (45,533
    )
    
    $
    (135,224
    )
    
    $
    (135,224
    )
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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
  For the Three
    
    
    For the Six
    
    
    Period from June 1,Months Ended
    
    
    Months Ended
    
    
    2007 (Inception) toJune 30, 2008
    
    
    June 30, 2008
    
    
    March 31, 2008Provision at statutory rate
    
    $
    100,467
    
    
    $
    259,851
    
    
    $
    334,096State taxes, net of federal benefit
    
    
    28,654
    
    
    
    74,113
    
    
    
    95,288Provision for income taxes
    
    $
    129,121
    
    
    $
    333,964
    
    
    $
    429,384
 Note 6  Fair Value Measurements
 Fair Value Measurement Effective Date of FASB Statement No. 157,
   SignificantQuoted Prices in
    
    
    Significant Other
    
    
    UnobservableActive Markets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    June 30, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Cash and cash equivalents held in trust
    
    $
    78.8
    
    
    $
    78.8
    
    
    $
    
    
    
    $
    Total
    
    $
    78.8
    
    
    $
    78.8
    
    
    $
    
    
    
    $
    
  10




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
 Note 7 Commitments and contingencies
      
 11




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Special Note About Forward-Looking Statements
  Overview
      12




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Results of Operation
    Liquidity and Capital Resources
      Recent Accounting Pronouncements
  13




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Redeemable common stock
  Critical Accounting Policies
 Basis of presentation
  Concentration of Credit Risk
  Cash and cash equivalents
  Preferred Stock
  Net Income per Common Share
   14




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
    Limitations on the Effectiveness of Controls
  15




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IDEATION ACQUISITION CORP.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 3.1
    
    Certificate of Incorporation*3.2
    
    Bylaws*3.3
    
    Form of Amended and Restated Certificate of Incorporation*4.1
    
    Specimen Unit Certificate*4.2
    
    Specimen Common Stock Certificate*4.3
    
    Form of Warrant Certificate*4.4
    
    Form of Warrant Agreement between the Registrant and Continental Stock Transfer & Trust Company*31.1
    
    Certification of Chief Executive Officer Pursuant to SEC Rule 13a-14(a)/15d-14(a)**31.2
    
    Certification of Chief Financial Officer Pursuant to SEC Rule 13a-14(a)/15d-14(a)**32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350**32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350**
 
 *
    
    Incorporated by reference to exhibits of the same number filed with the Registrants Registration
Statement on Form S-1 or amendments thereto (File No. 333-144218)**
    
    Filed herewith 16




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SIGNATURES
  IDEATION ACQUISITION CORP.Date: August 6, 2008/s/ Robert N. FriedRobert N. FriedPresident, Chief Executive Officer and Director
(Principal Executive Officer)Date: August 6, 2008/s/ Rao UppaluriRao UppaluriTreasurer and Director
(Principal Financial Officer) 17