SearchMedia Holdings Limited Under Investor Investigation

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Company Name(s): 
SearchMedia
Affected Securities: 
AMEX: IDI

An investigation on behalf of investors in SearchMedia Holdings Limited (AMEX:IDI) concerning possible violations of federal securities laws was announced.

SearchMedia Holdings Limited, formerly Ideation Acquisition Corp, located in Beverly Hills, California, is a blank check company formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more businesses. The investigation by a law firm focuses on potential claims on behalf of investors of SearchMedia Holdings Limited in connection with possible violations of federal securities laws.

SearchMedia Holdings Ltd. announced on August 20, 2010, that as a result of its continued internal analysis of its financial statements for the year ended December 31, 2009, based on management's recommendation, the Audit Committee had concluded that the historical financial statements of SearchMedia for the 2007 and 2008 fiscal years should be restated and that the financial statements from these periods can no longer be relied upon. SearchMedia Holdings Limited further indicated that it estimated that revenue in 2007 and 2008 had been overstated by approximately $6 million and $25 million, respectively. SearchMedia Holdings Limited, which had previously been granted an extension to file its form 10-K for the year ended December 31, 2009 by August 31, 2010, also stated that “it is unlikely that we will meet this deadline due to the restatement of the 2007 and 2008 financial statements. . . .”

On August 20, 2010, SearchMedia Holdings Limited’s common stock (IDI) declined by $0.78 per share, about 23%, to close at $2.62 per share and the Company’s warrants declined by $0.22 per share, about 41%, to close at $0.32 per share on substantially greater than average volume. SearchMedia Holdings Limited shares (IDI) traded recently at $1.79 per share, down from its 52weekHigh of $8.71 per share.