##### 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 September 30, 2008ORo
    
    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
  o o þ o
  þ o




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TABLE OF CONTENTS
 PagePART 1
    
    FINANCIAL INFORMATION
    
    
    2ITEM 1
    
    FINANCIAL STATEMENTS
    
    
    2UNAUDITED CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
    
    
    2UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2008, THE THREE MONTHS ENDED SEPTEMBER 30, 2007, AND THE PERIOD FROM JUNE 1, 2007
(DATE OF INCEPTION) THROUGH SEPTEMBER 30, 2008
    
    
    3UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY FOR THE NINE MONTHS ENDED
SEPTEMBER 30,2008 AND THE PERIOD FROM JUNE 1, 2007 (DATE OF INCEPTION) THROUGH DECEMBER
31, 2007
    
    
    4UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2008 AND FOR THE PERIOD FROM JUNE 1, 2007 (DATE OF INCEPTION) THROUGH
SEPTEMBER 30, 2008
    
    
    5NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    6ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    13ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    16ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    16PART II
    
    OTHER INFORMATION
    
    
    17ITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    17ITEM 1A.
    
    RISK FACTORS
    
    
    17ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    17ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    17ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    17ITEM 5.
    
    OTHER INFORMATION
    
    
    17ITEM 6.
    
    EXHIBITS
    
    
    18SIGNATURES
    
    
    19EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1.
    
    Financial Statements
 
 IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 Condensed Balance Sheets
 September
30, 2008
    
    

December
31, 2007(Unaudited)AssetsCurrent Assets:Cash and cash equivalents
    
    $
    483,355
    
    
    $
    124,139Interest receivable
    
    
    114,303
    
    
    
    291,835Income taxes receivable
    
    
    61,410
    
    
    
    Franchise taxes receivable
    
    
    156,000
    
    
    
    Other current assets
    
    
    68,160
    
    
    
    49,256Total current assets
    
    
    883,228
    
    
    
    465,230Other asset, cash and cash equivalents held in trust
    
    
    78,815,000
    
    
    
    78,815,000Deferred tax asset
    
    
    227,913
    
    
    
    Total assets
    
    $
    79,926,141
    
    
    $
    79,280,230Liabilities and Stockholders EquityCurrent Liabilities:Accrued expenses
    
    $
    224,583
    
    
    $
    26,721Income taxes payable
    
    
    
    
    
    
    74,244Franchise taxes payable
    
    
    
    
    
    
    68,666Total current liabilities
    
    
    224,583
    
    
    
    169,631Long-term liabilityDeferred underwriters fee
    
    
    2,730,000
    
    
    
    2,730,000Common stock subject to possible redemption
(2,999,999 shares at September 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 September 30, 2008 and December 31, 2007
    
    
    1,250
    
    
    
    1,250Additional paid-in capital
    
    
    52,595,237
    
    
    
    52,595,237Income accumulated during the development stage
    
    
    735,079
    
    
    
    144,120Total stockholders equity
    
    
    53,331,566
    
    
    
    52,740,607Total liabilities and stockholders equity
    
    $
    79,926,141
    
    
    $
    79,280,230
  2




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 Condensed Statements of Operations
(unaudited)
 For the Three
    
    
    For the Three
    
    
    For the nine
    
    
    Period from June 1,Months Ended
    
    
    Months Ended
    
    
    Months Ended
    
    
    2007 (Inception) toSeptember 30, 2008
    
    
    September 30, 2007
    
    
    September 30, 2008
    
    
    September 30, 2008Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Formation and operating costs
    
    
    360,216
    
    
    
    90
    
    
    
    646,295
    
    
    
    747,172Loss from operations
    
    
    (360,216
    )
    
    
    (90
    )
    
    
    (646,295
    )
    
    
    (747,172
    )Interest income
    
    
    396,052
    
    
    
    
    
    
    
    1,520,512
    
    
    
    1,860,929Income (loss) before provision for income taxes (benefit)
    
    
    35,836
    
    
    
    (90
    )
    
    
    874,217
    
    
    
    1,113,757Provision for income taxes (benefit)Current
    
    
    41,983
    
    
    
    
    
    
    
    511,171
    
    
    
    606,591Deferred
    
    
    (92,689
    )
    
    
    
    
    
    
    (227,913
    )
    
    
    (227,913
    )Total provision (benefit) for income taxes
    
    
    (50,706
    )
    
    
    
    
    
    
    283,258
    
    
    
    378,678Net income (loss)
    
    $
    86,542
    
    
    $
    (90
    )
    
    $
    590,959
    
    
    $
    735,079Maximum number of shares subject to possible redemption:Weighted average number of shares, basic and diluted
    
    
    2,999,999
    
    
    
    
    
    
    
    2,999,999
    
    
    
    1,933,471Income (loss) per share amount, basic and diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Weighted average number of common shares outstanding
(not subject to possible redemption):Basic
    
    
    9,500,001
    
    
    
    1,462,833
    
    
    
    9,500,001
    
    
    
    6,946,722Diluted
    
    
    11,745,777
    
    
    
    1,462,833
    
    
    
    11,623,259
    
    
    
    9,056,611Income per share amount:Basic
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.11Diluted
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.05
    
    
    $
    0.08
  3




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 Condensed Statements of Changes in Stockholders Equity
 IncomeAccumulatedAdditional
    
    
    During the
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    Development
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    EquityCommon shares issued to founders
    
    
    2,500,000
    
    
    $
    250
    
    
    $
    24,750
    
    
    $
    0
    
    
    $
    25,000Sale of 2,400,000 warrants at $1 per warrant to
initial stockholders
    
    
    
    
    
    
    
    
    
    
    2,400,000
    
    
    
    
    
    
    
    2,400,000Sale of 10,000,000 units through public offering,
net of underwriters discount and offering
expenses, at $8 per unit (including 2,999,999
shares subject to possible redemption)
    
    
    10,000,000
    
    
    
    1,000
    
    
    
    73,810,479
    
    
    
    
    
    
    
    73,811,479Proceeds subject to possible redemption,
2,999,999 shares
    
    
    
    
    
    
    
    
    
    
    (23,639,992
    )
    
    
    
    
    
    
    (23,639,992
    )Net Income for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144,120
    
    
    
    144,120Balances at December 31, 2007
    
    
    12,500,000
    
    
    $
    1,250
    
    
    $
    52,595,237
    
    
    $
    144,120
    
    
    $
    52,740,607Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    590,959
    
    
    
    590,959Balances at September 30, 2008 (unaudited)
    
    
    12,500,000
    
    
    $
    1,250
    
    
    $
    52.595.237
    
    
    $
    735,079
    
    
    $
    53,331,566
  4




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 Condensed Statements of Cash Flows
(unaudited)
 For the Nine
    
    
    Period from June 1
    
    
    Period from June 1,Months Ended
    
    
    2007 (inception) to
    
    
    2007 (Inception) toSeptember 30, 2008
    
    
    September 30, 2007
    
    
    September 30, 2008Cash flows from operating activities:Net income (loss)
    
    $
    590,959
    
    
    $
    (5,090
    )
    
    $
    735,079Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:Deferred tax assets
    
    
    (227,913
    )
    
    
    
    
    
    
    (227,913
    )Changes in operating assets and liabilities:Interest receivable
    
    
    177,530
    
    
    
    
    
    
    
    (114,303
    )Income taxes receivable
    
    
    (61,410
    )
    
    
    
    
    
    
    (61,410
    )Franchise taxes receivable
    
    
    (156,000
    )
    
    
    
    
    
    
    (156,000
    )Other current assets
    
    
    (18,902
    )
    
    
    (295,455
    )
    
    
    (68,160
    )Accrued expenses
    
    
    197,862
    
    
    
    257,365
    
    
    
    224,583Income taxes payable
    
    
    (74,244
    )
    
    
    
    
    
    
    Franchise taxes payable
    
    
    (68,666
    )
    
    
    
    
    
    
    Net cash (used in) provided by operating activities
    
    
    359,216
    
    
    
    (43,180
    )
    
    
    331,876Net 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 costs
    
    
    
    
    
    
    
    
    
    
    (3,458,521
    )Net cash provided by financing activities
    
    
    
    
    
    
    225,000
    
    
    
    78,966,479Net increase in cash and cash equivalents
    
    
    359,216
    
    
    
    181,820
    
    
    
    483,355Cash and cash equivalents, beginning of period
    
    
    124,139
    
    
    
    
    
    
    
    Cash and cash equivalents, end of period
    
    $
    483,355
    
    
    $
    181,820
    
    
    $
    483,355Supplemental disclosures:Deferred offering costs
    
    $
    
    
    
    $
    250,000
    
    
    $
    2,730,000Cash paid for income taxes
    
    $
    824,000
    
    
    $
    
    
    
    $
    824,000
  5




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
 Note 1  Organization and Nature of Business Operations
       6




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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
  Preferred Stock
  Net Income per Common Share
   7




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
 New Accounting Pronouncements
   Share-Based Payment
 Disclosures about Derivative Instruments and
Hedging Activities  An Amendment to FASB Statement No. 133
 Redeemable common stock
  8




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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
      9




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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 Nine
    
    
    Period from June 1,Months Ended
    
    
    Months Ended
    
    
    2007 (Inception) toSeptember 30, 2008
    
    
    September 30, 2008
    
    
    September 30, 2008Current Tax ProvisionFederal
    
    $
    167,280
    
    
    $
    532,346
    
    
    $
    606,591State
    
    
    (125,297
    )
    
    
    (21,175
    )
    
    
    Total Current
    
    
    41,983
    
    
    
    511,171
    
    
    
    606,591Deferred Tax Provision:Federal
    
    
    (122,698
    )
    
    
    (227,913
    )
    
    
    (227,913
    )State
    
    
    30,009
    
    
    
    
    
    
    
    Total Deferred
    
    $
    (92,689
    )
    
    $
    (227,913
    )
    
    $
    (227,913
    )
 10




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
  For the Three
    
    
    For the Nine
    
    
    Period from June 1,Months Ended
    
    
    Months Ended
    
    
    2007 (Inception) toSeptember 30, 2008
    
    
    September 30, 2008
    
    
    September 30, 2008Provision at statutory rate
    
    $
    12,185
    
    
    $
    297,233
    
    
    $
    378,678State tax refund and other
    
    
    (62,891
    )
    
    
    (13,975
    )
    
    
    Provision for income taxes
    
    $
    (50,706
    )
    
    $
    283.258
    
    
    $
    378,678
 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
    
    September 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
    
    
    $
    
    
    
    $
    
  11




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IDEATION ACQUISITION CORP.
(a corporation in the development stage)
 NOTES TO CONDENSED FINANCIAL STATEMENTS  (Continued)
 Note 7 Commitments and contingencies
      12




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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
      13




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Results of Operation
    Liquidity and Capital Resources
      Recent Accounting Pronouncements
  14




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Share-Based Payment
 Disclosures about Derivative Instruments and
Hedging Activities  An Amendment to FASB Statement No. 133
 Redeemable common stock
  Critical Accounting Policies
 Basis of presentation
  Concentration of Credit Risk
  15




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Cash and cash equivalents
  Preferred Stock
  Net Income per Common Share
   
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4.
    
    CONTROLS AND PROCEDURES
   16




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Limitations on the Effectiveness of Controls
  
 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
  17




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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 18




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SIGNATURES
   IDEATION ACQUISITION CORP.Date: November 10, 2008
    /s/ Robert N. FriedRobert N. FriedPresident, Chief Executive Officer and Director
(Principal Executive Officer)  Date: November 10, 2008
    /s/ Rao UppaluriRao UppaluriTreasurer and Director
(Principal Financial Officer) 19