United
States


Securities
and Exchange Commission




Washington,
D.C. 20549




Form
10-K




x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For
the fiscal year ended December 31, 2008


OR




 ̈
            TRANSITIONAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
transition period from _______________ to _________________




Commission
File Number 000-52289




Power
of the Dream Ventures, Inc.


(Name of
Small Business Issuer in its charter)







Delaware
                  (State
      or other jurisdiction of incorporation or organization)
                51-0597895
                  (I.R.S
      Employer Identification
No.)





1095 Budapest, Soroksari ut
94-96, Hungary


(Address
of principal executive offices) (Zip Code)


+36-1-456-6061


(Issuer’s
telephone number)




Securities
registered under Section 12(g) of the Exchange Act: None.




Securities
registered under Section 12(g) of the Exchange Act: Common Stock, par value
$0.0001 per share




Indicate
by a check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes  No x




Check
whether the issuer is not required to file reports pursuant to Section 13 or 15
(d) of the Exchange Act. 




Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirement for the past 90 days. Yes xNo 




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. 




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.
(Check one)




Large
accelerated filer        
Accelerated filer        
Non-accelerated filer        
Smaller reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  No x




Issuer
had revenues of $0 for the year ended December 31, 2008. As of March 15,
2009, 47,615,181 shares of Common Stock were outstanding of which approximately
12,035,350 were held by non-affiliates of the Company. The aggregate market
value of the Common Stock held by non-affiliates of the Company as of June 30,
2008 was $16,247,723.




Documents
Incorporated by Reference: None.




Transitional
Small Business Disclosure Format (check one): Yes  No x







1




POWEROF THE DREAM VENTURES, INC. (formerly TIA V,
Inc.)




(A
Development Stage Company)




INDEX
TO FORM 10-K




December
31, 2008





PagePART
      IItem
      1.
                                                    Description of Business
                                                    3Item
      1A.
                                                    Risk Factors
                                                    14Item
      2.
                                                    Description of Property
                                                    20Item
      3.
                                                    Legal Proceedings
                                                    20Item
      4.
                                                    Submission of Matters to a Vote of Security
      Holders
                                                    20PART
      IIItem
      5.
                                                    Market for Common Equity and Related Stockholder Matters and
      Small Business Issuer Purchases of Equity Securities
                                                    21Item
      6.
                                                    Selected Financial Data
                                                    23Item
      7.
                                                    Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
                                                    23Item
      8.
                                                    Financial Statements and Supplementary Data
                                                    29Item
      9.
                                                    Changes in and Disagreements with Accountants on Accounting and
      Financial DisclosureItem
      9A.
                                                    Controls and Procedures
                                                    29Item
      9B.
                                                    Other Information
                                                    31PART
      IIIItem
      10.
                                                    Directors and Executive Officers, Promoters, Control Persons
      and Corporate Governance; Compliance with Section 16(a) of the Exchange
      Act
                                                    32Item
      11.
                                                    Executive Compensation
                                                    34Item
      12.
                                                    Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
                                                    35Item
      13.
                                                    Certain Relationships and Related Transactions, and Director
      Independence
                                                    36Item
      14.
                                                    Principal Accountant Fees and Services
                                                    36PART
      IVItem
      15.
                                                    Exhibits


2
 Index




PART
I




ITEM1.
            DESCRIPTION
      OF BUSINESS




This
report contains forward-looking statements within the meaning of the federal
securities laws. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by words or phrases
such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “Company
believes,” “management believes” and similar language. The forward-looking
statements are based on the current expectations of the Company and are subject
to certain risks, uncertainties and assumptions, including those set forth in
the discussion under “Description of Business” and “Management’s Discussion and
Analysis or Plan of Operation”. The actual results may differ materially from
results anticipated in these forward-looking statements. We base the
forward-looking statements on information currently available to us, and we
assume no obligation to update them.




The
Company’s Business




Power of
the Dream Ventures, Inc., (“PDV” or “We” or the “Company”) is Hungary’s
premier holding company focused on technology acquisition and development
enabling the delivery of revolutionary concepts and ready to market products to
the international market place. We develop, acquire, license, or co-develop
technologies that originate exclusively in Hungary that are in prototype stage
based on existing patents; in prototype stage prior to patenting; existing
products that require expansion capital to commercialize; emerging science and
high-technology research projects that require help in patenting, developing the
product and marketing, university spin-off technologies and ideas from the very
early stages of what represents “disruptive technologies.”




We were
incorporated in Delaware on August 17, 2006, under the name Tia V, Inc. Since
inception, and prior to our acquisition of Vidatech on April 10, 2007, we were
engaged solely in organizational efforts and obtaining initial financing. Our
sole business purpose was to identify, evaluate and complete a business
combination with an operating company.




On April
10, 2007, we completed our acquisition of Vidatech, Kft. (also know as Vidatech
Technological Research and Development LLC) a limited liability company formed
under the laws of the Republic of Hungary. Vidatech is a company formed for the
purpose of investing in, acquiring, developing, licensing, and commercializing
technologies developed in Hungary. In furtherance of its business, Vidatech
provides research and development services to the companies from which it
acquires technologies or participation interests in such
technologies.




Through
Vidatech, we aim to provide pro-active support for idea, research, start-up and
expansion-stage technology companies having rights to technologies or
intellectual properties which we believe to be potentially commercially viable,
by offering a range of services designed to encourage and protect the continuing
development and eventual commercialization of those technologies.




The
Company’s Industry




The
Company develops proprietary products for a wide range of industry sectors.
These include, but are not limited to:




-
            Software
      industry, form online applications to stand alone
  products




-
            Energy
      industry from power generation technologies to power transmission and
      power storage methods




-
            Manufacturing
      sectors from sub-component assemblies to whole
  units


3
 Index




-
            Chemical
      sector, with a special focus on biodegradable solutions for
      environmentally sensitive
applications




-
            Biotechnology
      sector with a special emphasis on cancer and cholesterol treatment
      methods




-
            Pharmaceutical
      products




-
            Medical
      equipment with a special emphasis on products that offer better solution
      to existing treatment methodologies




-
            Transportation
      related products that are environmentally friendly and provide
      alternatives to current methods




-
            Chemicals
      that are biodegradable and environmentally friendly solutions for diverse
      application areas from fire fighting to waste
  processing




-
            Equipment
      for the leisure industry




-
            Communications
      products and methods that offer significant industry enhancement to
      solutions currently in use




-
            Entertainment
      industry products for movie, television and
  gaming




-
            Disruptive
      technologies for all industries where there is a discernable need or
      suitable market opportunity for new technology
  penetration




-
            Metals
      industries such as precious metals refining and end user
    sales




As a
diversified technology manager we seek to license and sell technologies within
any of these industries.




The
Company’s Business Strategy




To date,
the primary focus of Central European countries has been to develop a solid
infrastructure required for a market economy. Due to the high-perceived risks of
these economies, institutional financial support for start-ups and expansion
stage companies has been lacking.




With
several Central European economies joining the European Monetary Union by 2012,
Hungary, as one of the most developed Central European countries, is moving from
a transition to a converging economy. With the continued stabilization and the
transition of Hungary to a converging economy the time is ripe for a local
entity with high level technology skills to selectively acquire, develop,
license and/or co-developed international market ready
technologies.




The
Company’s Products




Through
December 31, 2008, we have had only limited operations and acquired rights to
only eleven technologies: TothTelescope, RiverPower, the Kalmar inventions
(fire-proofing liquid called FireSAFE; technology for utilizing communal waste
as a concrete additive; technology for repairing potholes with the use of
recycled plastics; technology for recycling the metal content of PVC shielded
electric cables and the metal content of radial tires; technology for deicing
roads in an environmentally friendly way; and technology for the neutralization
of toxic red mud, a byproduct of the bauxite industry), a desalination
technology that functions cheaper, with more efficiency and with less energy
than current methods and technology for the mixing of water with gasoline for
use in internal combustion engines In addition we also purchase an equity
interest in “in4 Kft”, a Hungarian Limited Liability Company formed to develop
and commercialize a next generation internet based search engine and content
organizer product based on semantic internet technology.


4
 Index




A
detailed analysis of these technologies is as follows:




The
Company’s Desalination technology




Pursuant
to an invention transfer agreement dated October 26, 2007, Vidatech obtained
exclusive rights to develop and commercialize a new desalination device. Prior
to signing the agreement a thorough due diligence was completed to establish the
uniqueness and patentability of the technology by Pintz and Co., independent
patent attorneys, following which a patent application was submitted on December
21, 2007, with the Company’s Hungarian Subsidiary, Vidatech Ltd. as the patent
holder. Following successful development of the technology the Company is
entitled to receive sixty (60) percent of the revenues generated from the
utilization of the technology while the inventor is to receive forty (40)
percent.




In its
current stage of development the desalination device consists of comprehensive
design specifications, engineering drawings, and a small prototype to
demonstrate proof of concept. We are now engaged in producing final engineering
specifications for the manufacturing of a laboratory scale prototype. We
anticipate the completion of these plans by the the end of 2009, with a working
prototype completed by mid 2010. Once operational, the prototype will undergo
rigorous testing and technology refinement procedures.




When
complete, the desalination device is expected to be a fully portable unit that
can be installed at any location, will be powered by either solar or wind power,
and is expected to produce drinking water at much better efficiencies
and at a cost per liter that is less than machines currently in use. Because of
the scalability of the technology it can also be made practical for large
scale commercial installations.




The term
Desalination refers to any of several processes to remove excess salt and other
minerals from water. Water is desalinated in order to be converted to fresh
water suitable for animal consumption or irrigation, or, if almost all of the
salt is removed, for human consumption. Sometimes the process produces table
salt as a by-product. Desalination is used on many ships and submarines. Most of
the modern interest in desalination is focused on developing cost-effective ways
of providing fresh water for human use in regions where the availability of
water is limited.




Large-scale
desalination typically requires large amounts of energy, as well as specialized,
expensive infrastructure, making it very costly compared to the use of fresh
water from rivers or groundwater. The large energy reserves of many Middle
Eastern countries, along with their relative water scarcity, have led to
extensive construction of desalination in the region. Saudi Arabia’s
desalination plants account for about 24% of total world capacity. The world’s
largest desalination plant is the Jebel Ali Desalination Plant (Phase 2) in the
United Arab Emirates. It is a dual-purpose facility that uses multi-stage flash
distillation and is capable of producing 300 million cubic meters of water per
year (Source: Wikipedia article).




The two
leading technologies used in desalination are reverse osmosis (47.2% of
installed capacity world-wide) and multi-stage flash (36.5%).




The
traditional process used in these operations is vacuum distillation—essentially
the boiling of water at less than atmospheric pressure and thus a much lower
temperature than normal. This is due to the fact that the boiling of a liquid
occurs when the vapor pressure equals the ambient pressure and vapor pressure
increases with temperature. Thus, because of the reduced temperature, energy is
saved.




In the
last decade, membrane processes have grown very quickly, and most new facilities
use reverse osmosis technology. Membrane processes use semi-permeable membranes
and pressure to separate salts from water. Membrane systems typically use less
energy than thermal distillation, which has led to a reduction in overall
desalination costs over the past decade. Desalination remains energy intensive,
however, and future costs will continue to depend on the price of both energy
and desalination technology.


5
 Index




Forward
osmosis desalination technology employs a passive membrane filter that is
hydrophilic and slowly permeable to water, and blocks a portion of the solutes.
Water is driven across the membrane by osmotic pressure created by food grade
concentrate on the clean side of the membrane. Forward osmosis systems are
passive in that they require no energy input. They are used for emergency
desalination purposes in seawater and floodwater settings.




The
Company’s patent pending desalination technology uses a mix of present
technologies including vacuum distillation with our unique proprietary
ultrasonic impulse excitation and cavitation.




As of
December 31, 2008 we have not yet begin to develop this technology due to time
and financial constraints. We may not be in a position to advance development
for quite some time, and may even be forced to shut down development of this
technology. The potential downside risk based on funds allocated thus far for
this development is less than $15,000 dollars.




The
TothTelescope




Pursuant
to an exclusive distributorship agreement dated June 15, 2006 by and between
Vidatech and Attila Toth, Vidatech obtained the exclusive worldwide distribution
rights to the TothTelescope. The Agreement covers all methods and extents of
utilization of the TothTelescope and underlying technology for an initial one
year period commencing on July 15, 2006. Vidatech is entitled to receive sixty
(60%) of the revenues generated from the utilization of the technology. On June
15, 2007 we entered into an amendment of this agreement granting Vidatech rights
to the exclusive distributorship of the TothTelescope for an additional period
of two years.




Since
June 15, 2006, and through the period ended December 31, 2007, we have sold and
distributed eight TothTelescopes and various accessories for aggregate sales
proceeds of $5,833. Since June 30, 2007, the TothTelescope has been unavailable
for purchase.  This is mainly due to manufacturing challenges that
have arisen since introducing the product. The original supplier of certain
components proved to be unreliable in producing consistent quality over multiple
orders, which forced us to discontinue our relationship with the supplier. We
have been unable to locate a suitable replacement manufacturer in Hungary. We
are now evaluating several out of country suppliers. It is anticipated that a
final decision on a new supplier(s), if any, will be made by the middle of
2009.




As of
December 31, 2008 we have been unable to locate suitable parts suppliers for the
telescope at cost levels, and in a suitable timeframe, that would warrant
continuation of this project. Therefore as of December 31, 2008 we have
discontinued marketing and manufacturing efforts for the
TothTelescope.




Revenues
obtained from the eight telescopes have offset development expenses incurred
during the project.




RiverPower
Technology




Pursuant
to an exclusive utilization agreement dated May 24, 2007 by and between the
Company and Janos Salca and Viktor Salca, collectively the inventors. On May 25,
2007 Vidatech submitted two patent applications in Hungary, one relating to the
modular, vertical wheels based generation unit of the RiverPower technology and
one for the slow revolutions per minute electrical generator itself, which
coverts slow rotational movement into electrical power. Prior to submission of
the patent applications, a thorough due diligence review was completed to
establish the uniqueness and patentability of the technology.




On May
15, 2008 we filed two PCT patent applications as international extension of the
applications filed in Hungary on May 25, 2007.




The
exclusive utilization agreement covers all methods and extents of utilization of
the inventions, collectively referred to as RiverPower, and all aspects of the
underlying technology. Upon successful deployment and commercialization of the
technology the Company is entitled to receive fifty (50) percent of all revenues
generated while the inventors will receive the remaining net fifty (50) percent.
As part of the agreement Janos Salca and Viktor Salca each received 50,000
shares of our common stock. The shares were issued on August 4,
2007.


6
 Index




RiverPower
is a proprietary, renewable, green power-generation technology aimed at
converting the flow of rivers into electricity without the need for expensive,
environmentally degrading dam construction.  In order to generate
electricity, RiverPower generators are simply submerged into rivers and anchored
at specific distances in the riverbed. As long as the river flow exceeds one
meter per second, the RiverPower machine will generate electrical power
economically (installations for slower moving rivers can also be custom
designed). RiverPower technology differs from other hydropower generation
techniques in that we believe that it has the ability to use the flow of the
entire river, capable of achieving greater efficiency and increased power
production than in traditional turbine-based systems, without dams.




RiverPower
generators are built of standardized modules that are approximately 2 meters in
height by 2 meters in width by 6 meters in length, with four (4) vertically
mounted wheels rotating at between 7-15 rpm (revolutions per minute). All wheels
in the modules are interconnected and transfer rotational movement to a single
axle, on which our patent pending, slow speed, 1800 pole generator sits for the
conversion of rotational movement into electricity. Each RiverPower assembly,
made of six (6) standard interlocked units, is rated at approximately 50kWh in
generating capacity. Several of these modules can be networked together for
larger output, creating generator farms. Custom designed generators can also be
constructed with larger or smaller output.




In August
of 2008 we completed initial testing of one fourth scale RiverPower prototypes
at Vituki, Hungary Water Resource Management and Engineering firm. Based on this
study it was determined that the technology is viable and can be used for power
generation. As of December 31, 2008 we entered into a second development
agreement with Vituki, aimed at optimizing and enhancing the technology. We
anticipate completion of this second round of testing in the second quarter of
2009.




Hydroelectric
power is electricity produced by the movement of water (i.e., from the release
of water from a dam; from water flowing down a waterfall, through a river, or in
and out with the tide, etc.).  It is created when water is fed through
a channel to a turbine where it strikes and turns turbine blades.  The
rotating turbine blades cause the turbine shaft to turn, which turning motion is
converted into electrical energy by means of a generator connected to the
turbine shaft.




Hydroelectric
power is one of several green, renewable energy sources, and is currently the
largest renewable energy source, accounting for 19% of electrical generation –
715,000 mWe. Other means for producing electrical power include solar, wind, and
geothermal production methods, accounting for approximately 4% of all
alternative renewable electrical energy market.  Alternative renewable
electrical energy production, itself, accounts for approximately 10-12% of
global electrical energy production (Source: Wikipedia article.) Nevertheless,
with daily world consumption increasing and hydrocarbon supplies decreasing,
there is considerable incentive for companies to develop low-cost alternative,
renewable electrical energy production means, including hydroelectric power.
This is especially true when viewed against the current geopolitical
climate.




Hydroelectric
power projects are under construction in approximately 80 countries, most of
which are traditional dam based hydroelectric projects. Most of the remaining
hydro potential in these dam-based hydro projects is in developing countries,
particularly in South and Central Asia, Latin America and Africa.  Our
RiverPower technology changes this competitive landscape in that it can
introduce a means whereby rivers can become power generating sites, without the
need for expensive and prolonged dam construction. In addition because
RiverPower technology supplies continuous power 24 hours a day (because
RiverPower generators are in a constant flow environment, a river) turnover
(return of invested capital) is faster than with solar or wind
installations.


7
 Index




Marketing




We will
seek to commercialize RiverPower initially, in Hungary, and then internationally
in Europe, the US, Central and South America and China through large scale power
plant(s) facilities construction, licensing and/or joint operation of
plants.  Towards that end, and during the next twelve (12) months, it
is our plan to: (i) file the national phase of our PCT application with respect
to RiverPower and the many pole generator technology covering the following
countries: all EU member states, US, Canada, Japan, China, India, Brazil, Egypt,
Congo, Afghanistan, Tajikistan, Turkmenistan, Uzbekistan, Russia, Mongolia,
Argentina, Chile, Peru, Ukraine, Belarus, Turkey, Iraq, Israel, Jordan, Niger,
Nigeria, Mali, Venezuela; (ii) build a life sized prototype of the machine and
river testet in Hungary following the successful completion of the second VITUKI
testing program, expected in the second half of 2009.; (iii)  build
and field test a full sized version of the many pole generator to be used on
RiverPower machines; (iv) and install the first pilot facility by the end of
2009 for final testing and power generation data in Hungary..




The
marketing of our RiverPower technology will follow different methods based on
the application area and partner/customer requirements.




Our
preferred method of marketing is the establishment of co-generation sites that
are co-financed with development partners, in which case revenues realized from
the sale of electrical power are split in proportion to funds provided for the
establishment of the site. This method is optimal in Hungary and other EU member
countries for example, where an abundance of “river close” cities exists that
are interested in utilizing the technology but lack the financial strength to
establish larger installations on their own. In EU territories power utilities
are obligated to purchase green power from producers at regulated prices
(currently at approximately 10 Euro cent per kWh). Based on these prices, and
our preliminary estimate of RiverPower manufacturing, installation and
maintenance costs, we anticipate return of invested capital in 3-4 years for
each site.




In
addition to co-generation sites we will also offer equipment purchase options
for individual or small scale users, and will also pursue country or regional
scale licensing agreements. These agreements may or may not include revenue
sharing arrangements.




The
Company’s FireSAFE, HardCrete concrete from communal waste additive and Recycled
plastic pothole filler technologies




Pursuant
to an invention transfer agreement dated August 13, 2007 by and between Vidatech
and Imre Kalmar Nagy, the inventor, the Company acquired worldwide rights to
three technologies, as developed by the Inventor, for HUF 5 million
(approximately USD 25,000). The inventions are FireSAFE, a biodegradable fire
fighting solution that is capable of fireproofing objects to 1,100 degrees
centigrade; HardCrete, a concrete additive that allows communal waste to be
mixed into concrete; and a pothole filler product that utilizes a special mix of
recycled plastic to produce a pourable solution for repairing
potholes.




All three
inventions have been established to be patentable by the patent firm of Pintz
and Co, via an international patent search. The Company filed a patent
application for FireSAFE on November 5, 2007, and one application each for
HardCrete concrete from communal waste additive and the PVC recycled plastic
pothole filler on February 22, 2008. The Company became the patent holder of all
three technologies.




On
November 21, 2008 we filed a PCT application for FireSAFE to extend coverage
internationally.




The
Agreement covers all methods and extents of utilization of the inventions and
all aspects of the underlying technology. Upon successful deployment and
commercialization of any or all of the three technologies, Vidatech is entitled
to receive sixty (60%) of the revenues generated, while the Inventor will
receive forty (40) percent.


8
 Index




FireSAFE
is an environmentally safe, biodegradable liquid that is designed to prevent and
if necessary, extinguish natural fires that are exceedingly hard, or impossible
to contain with water or other fire fighting methods. This category includes
forest, bush and other natural fires. In the European Union, according to the
European Commission, the five Mediterranean States – France, Greece, Italy,
Portugal and Spain – suffer burnt areas of between 200,000 and 600,000 hectares
per year as a result of the 20,000 to 60,000 forest fires that have occurred
annually in the period 1980 to 2003, causing billions of dollars in damage
yearly. In Spain and Portugal alone, the total area razed during 2003 was more
than 450,000 hectares.




In the
US, large forest fires have occurred more frequently in the western United
States since the mid-1980s as spring temperatures increased, mountain snows
melted earlier and summers got hotter. Almost seven times more forested federal
land burned during the 1987-2003 period than during the prior 17 years. In
addition, large fires occurred about four times more often during the latter
period. In recent years, wildfires in the western United States have burned
hundreds of homes annually and caused extreme and sometimes irreversible damage
to natural resources. Fire-fighting expenditures for wildfires now regularly
exceed one billion dollars per year (Source: Scripps Institution of Oceanography
at the University of California)




On
August, 2008 we entered into a licensing agreement in which we grated exclusive
rights to further develop and commercialize FireSAFE to FireLess Ltd. According
to the terms of the agreement FireLess will be responsible, on a going forward
basis, for the development, certification and licensing/commercializing
FireSAFE. We received 30% equity in the new company in addition to a one time
license acquisition fee of HUF 20,000,000. As of December 31, 2008 HUF
10,000,000 has been provided with the rest payable by June 30,
2009.




FireLess
is currently engaged in laboratory and field testing of FireSAFE. We anticipate
this process to be completed in the second quarter of 2009. Following testing
and data analysis, assuming the final results warrant further development,
marketing and commercialization tasks will be undertaken, estimated to begin in
the second half of 2009. A final decision to move FireSAFE forward is expected
in the second quarter of 2009.




As of
December 31, 2008 we have not yet begin product development tasks associated
with HardCrete and the Pothole Filler product. We anticipate conducting
preliminary market analysis, competitor studies and technology verification
studies in the first half of 2009. Based upon the result od these studies a
final decision will be made on these products.




In
general, world demand for cement and concrete additives is forecast to rise 6.8
percent per year through 2010 to US$ 11 billion, a significant improvement over
the performance of the 1995-2005 period. Fueling gains will be an improving
construction outlook that will bode favorably for the global cement market. In
addition, higher performance requirements for concrete will prompt greater
loading factors for additives.




The
smaller fiber additive sector is expected to register the strongest gains,
continuing the trend of the past decade. However, 90 percent of overall demand
will remain concentrated in the chemical and mineral additive sectors. These and
other trends are presented in World Cement & Concrete Additives, a new study
from The Freedonia Group, Inc., a Cleveland-based market research firm.
Developing countries are expected to register the healthiest gains, averaging
over nine percent per year through 2008. A number of developing countries in the
Asia/Pacific region, such as China, India and Vietnam, are expected to exhibit
particularly healthy growth.




Developed
markets are generally expected to post weaker -- but still respectable --
overall gains that are expected to average around six percent per year through
2008. Demand for cement and concrete additives in the US will register gains
matching the world average, an impressive performance considering the highly
mature US economy and construction sector. The penetration of a number of key
cement additive products such as superplasticizers and set retarders in the US
market has yet to approach the intensity seen in Western Europe and Japan. The
West European cement and concrete additive market is expected to register gains
lagging the world average through 2008. The West European region is expected to
remain the most important cement and concrete additive market in the world in
2008.


9
 Index




Globally,
mineral additives such as fly ash and blast furnace slag are being increasingly
used to partially replace Portland cement, the most expensive component of
concrete. In doing so, producers of concrete are realizing significant cost
benefits as well as performance and durability improvements.




In
general, the market for pothole patching and small-area asphalt repair is a
niche of the asphalt paving market.  The need for patching and repair
of paving is everywhere and it is obvious and ongoing.  The demand for
repair work exceeds the supply of repair services.




Potholes
are the normal and unending result as asphalt pavements deteriorate from age,
weather and wear.  The need for pothole repair is increasing with the
amount of paved surfaces and from increasing utility work resulting from aging
utilities under roadways. Potholes are highly visible, detract from the
perceived value of a property, and reflect poorly on the quality of property
management.  Potholes present a tangible hazard to traffic and a
potential liability.




Left
unattended, potholes increase in size, damage and cost to
repair.  Potholes have to be repaired or ultimately, the entire
pavement must be replaced. Few contractors provide pothole repair services
because (a) the work is labor intensive and does not benefit from mechanization;
(b) hot-mix asphalt, in small quantities, is expensive and difficult to work
with; and (c) there is an abundance of easier and more profitable work. All
three of these obstacles would be solved with our plastic pothole filler, while
at the same time removing millions of tons of scrap plastic from
landfills.




The
typical quality of ‘patching’ makes it temporary. Patching materials
(cold-mix, sprayed aggregate and tar) have been developed to repair
potholes.  These materials are available in a wide range of cost and
performance.  None perform to the standard our proposed plastic
pothole filler, whose lifetime is expected to top that of the asphalt road it
was used to repair. Typically, potholes are patched repeatedly until the
surrounding pavement fails to such an extent that it is justified economically
to repave the entire surface or until complaints, surface problems or liability
risks force a repair of the site regardless of the cost.




Repairs
are also needed at excavations made to access utility services such as water
mains, gas lines, TV-cable, telephone lines and other
infrastructure.  Typically, these excavations are small, require
immediate attention and are located far enough apart to be expensive to repair
using traditional methods dependent on asphalt obtained from local asphalt
plants. Typically, these repairs are made with temporary materials until a
sufficient number of sites have accumulated to allow for economical
repair.




The
Company’s PVC covered electrical cable and radial tire recycling technology; red
mud neutralization; and environmentally friendly salt free de-icing
solution.




Pursuant
to an amendment to the invention transfer agreement by and between Vidatech and
Imre Kalmar Nagy, dated November 28, 2007, Vidatech acquired worldwide rights to
three additional technologies developed by Mr. Nagy for HUF 5 million
(approximately USD 25,000). The inventions are technology for the neutralization
of red mud, a byproduct of the bauxite/aluminum industry; technology for the
recycling of PVC shielded electrical cables and a Biodegradable de-icing
liquid.




All three
inventions have been established to be patentable by the patent firm of Pintz
and Co, via an international patent search. On February 22, 2008 the Company
filed two patent applications one each for the PVC shielded electric cable
recycling technology and one for the environmentally friendly deicing liquid.
The third technology aimed at neutralizing red mud has not been patented as of
December 31, 2008.




The
Agreement covers all methods and extents of utilization of the inventions and
all aspects of the underlying technology. Upon successful deployment and
commercialization of any or all of the three technologies, Vidatech is entitled
to receive sixty (60%) percent of the revenues generated, while Mr. Nagy will
receive forty (40%) percent of net revenues.




As of
December 31, 2008 we have not yet began development of these technologies. We
hope to complete initial technology verification and market studies in the first
half of 2009 to determine the best course of action, if any, to follow in
bringing them to market. During this study it may become apparent that the
commercialization of these technologies entails a lerge enough financial
expenditure/risk to make it impractical to move forward.


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In
general, our Red mud neutralization technology is a liquid additive-based method
capable of neutralizing heavy metals (and its caustic material content) inherent
in red mud by  forming a concrete-like substance that will not leak
dangerous elements even when exposed to heat, rain or other environmental
factors.




Red mud,
an undesirable bauxite residue generated in large quantities by alumina
refineries (for every ton of alumina produced two tons of residue is generated),
is usually managed by discharge into engineered or natural impoundment
reservoirs, with subsequent dewatering by gravity consolidation and sometimes
with capping for closure. Re-vegetation of dewatered red mud is not possible
without addition of additives because of the high pH, high salinity, and absence
of nutrients and organic constituents. The inventions addresses this issue.
Following the patenting of this invention, the product will undergo independent
verification and testing. We anticipate this process to commence in the second
quarter of 2008 and to be completed by the first quarter of 2009.




Our PVC
shielded electrical cable recycling is also a liquid based method, that allows
the easy removal of PVC from electrical cable scrap. Cables are submerged in a
solution and soaked for approximately fifteen minutes, following which the
metal can be easily pulled from the PVC casing. In approximately two hours the
PVC returns to its natural, rigid state. The liquid can be re-used between 50-60
times. This technology can also be used to remove the metal content of car
tires.




Currently
two methods are used by industry to recycle PVC shielded cables: stripping and
grinding, both of which are inefficient.




While,
recycling has become a common practice in Europe, there are several everyday
materials that are not currently being recycled, which we believe could be
recycled profitably, including high-quality PVC from electric cables. There is
further pressure to recycle as several EU directives regulating reuse of
materials, including cable material, are shortly coming into
effect.




The third
invention is a biodegradable de-icing solution. In general, de-icers come in
solids, liquids, pavement overlay, or packaged, formats. More recently, organic
compounds have been developed that reduce the environmental issues connected
with salts and have longer residual effects when spread on roadways, usually in
conjunction with salt brines or solids. These compounds are generated as
byproducts of agricultural operations such as sugar beet refining or the
distillation process that produces ethanol.




The
Company’s deicing solutions does not contain any of these
byproducts.  It is composed of natural compounds that are
environmentally friendly and are particularly well suited for the prevention and
removal of ice and snow. Pre-treated with the product, ice will not form on
surfaces, or once formed, it can easily be removed. We have filed a Hungarian
patent application for this product and are in the process of determining if a
PCT application is warranted. A decision will be made in the first half of
2009.




In
addition to these technologies our wholly owned subsidiary, Vidatech Kft. also
has a 40% equity interest in the following:




iGlue
technology via equity purchase in ‘in4 Kft’.




On August
2, 2007 Vidatech Kft., our wholly owned Hungarian subsidiary, entered into a
joint development agreement with the inventors/creators of iGlue, an online
content organization and search application based on semantic web technology. In
the transaction Vidatech received 30% equity in the newly formed in4 Kft
(http://www.in4.hu), the owner and exclusive developer of iGlue
(http://www.iglue.com), for HUF 900 thousand (approximately USD 5,000). Up until
May 31, 2009, Vidatech is expected to provide up to HUF 48 million
(approximately USD 271,000) in member loans to in4 Kft. to cover development
expenses of iGlue.


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As of
December 31, 2008 we have provided this amount to in4, Ltd.




As part
of the agreement, Vidatech has the option of converting its HUF 48 million
member loan into an additional 10% equity in in4 Kft. at or before the end of
May, 2009. Since as of December 31, 2008 we have provided the entire agreed upon
loan to in4 Ltd., as of January 8, 2009 we have elected to covert our member
loan into the additional 10% equity in in4, Ltd. As of that date we own 40% of
in4, Ltd.




Since the
establishment of in4 Kft. the company has focused on completing development work
on iGlue. On June 24, 2008 in4, Ltd released on the World Wide Web a product
demonstrator if iGlue. Subsequent to that on February 2, 2009 in4 released a
call for 1,000 beta tester to register at the products official website located
at http://www.iglue.com
for Beta testing to begin as soon as the 1,000 registrars have been reached. We
anticipate this Beta test to be under way before the end of first quarter of
2009. This initial limited Beta is to run for five weeks upon which a fully
functional Beta release will be launched for a world wide audience in the early
part of the second quarter of 2009.




Following
successful wide scale Beta testing it is anticipated that the final product will
become available starting in the third quarter of 2009.




Upon
successful launch we will aim to provide free and value added services of iGlue,
generating revenue from subscribers, advertising fees and technology
licenses.




iGlue
technology is composed of the following main building blocks:




Integrated
content management




Content
that has been created, or made accessible with iGlue, can be reused in any
environment (e.g. at another site) and custom-tailored to user requirements. The
semantic added value provided by the data structure enables a more versatile use
of the created content than is possible with content management and search
methods based on simple string matching.




Collaborative
database building, community intelligence




The use
of collaborative database building enhances the application with a relevance
factor that relies on community intelligence; this in turn provides self-repair
capability and also makes the suggestion function more efficient.




Modular
structure




Owing to
its modular structure, iGlue can be used to replace multiple data entry
utilities, and users can even use its API (application programming interface) to
develop program components themselves. This greatly improves the efficiency of
data management and storage.




Purely
online application, no installation needed




In
contrast to traditional desktop applications, iGlue represents a new generation
of programs that are used purely online. Accordingly, there is no need for
updates, upgrades, or maintenance – the program is always available for use in
its latest version. This results in significant cost savings in delivery,
packaging, and distribution.




Platform-independent
and browser-agnostic




The
platform, developed using the JAVA programming language and the extensible
markup language (XML), is platform-independent and browser-agnostic, can be run
on any operating system, and is built on open standards. The fact that the
application is completely independent from the program environment makes for
cost-efficient operation.


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Asynchronous
data handling (AJAX)




Thanks to
the integrated AJAX functions that use the latest technology, parts of the page
can also be refreshed separately; users don’t need to download full pages while
using the site, so this online application is as feature-rich as a desktop
program while it also eliminates the slow response times frequently experienced
with online applications. Compared to traditional (synchronous) methods that use
full page downloads, this approach saves time and provides ease of use, which
translates into significant savings in terms of work time.Cross-domain web
services using AJAX




One of
iGlue’s highlights is that using plug-ins, users can call the application
through external sites, which empowers any site with the search and content
management capabilities of the source site. The integration of web service and
AJAX technologies resulting in such a rich functionality is currently an
unrivaled feature of this program.




Accurately
targeted ads




Semantic
data entry allows a more efficient use of ad space, avoiding the “banner
graveyard” effect caused by untargeted ads. Ads based on the users’ activities
significantly enhance ad efficiency, making the selling of these ad spaces more
profitable.




Semantic
web represents disruptive technology with the power to challenge today’s
Internet titans. In4 Kft, in close working relationship with Vidatech, aims to
be the premier developer and operator of next generation intelligent web
sites.




The
Company’s Competition




The
Company conducts its business in several complex and highly competitive
industries. The global high-technology industry principally involves the supply
of systems, modules, components and technologies to a diverse number of
companies in diverging fields. Even though high technology is always in demand
the field is saturated with many well established companies whose history,
operating resources and reach is far wider than those of the
Company.




A summary
of the Company’s primary independent competitors is provided below.




Software
– The Company’s principal competitors in the technology segment included the
following: Yahoo! Inc., Google Inc., Microsoft, Kango, Hakia, Semantinet, Radar
Networks.




Desalination
– Zenon Environmental Inc., Consolidated Water Co. Ltd., IDE Technologies Ltd.,
Veolia Environment




Energy –
Ocean Power Technologies, First Solar, Inc., Suntech Power Holdings
Co.




The
Company’s Workforce and Employee Relations




The
Company’s workforce as of December 31, 2008 included 8 persons, of
which 5 were salaried employees and 3 were hourly workers.




The
Company’s Product Research and Development




The
Company’s research and development efforts are intended to establish leadership
positions in core technology lines and provide the Company with a competitive
edge as it seeks additional business with new customers. Total research and
development expenditures for the eleven technologies currently managed by the
Company were approximately $425,974 thousand in 2008, increasing from
$101,383 in 2007. The Company also works with technology development
partners, to develop technological capabilities and new products and
applications.


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The
Company’s Intellectual Property




The
Company owns significant intellectual property, including nine patent
applications, proprietary prototypes of managed technologies and numerous trade
secrets. Although the Company’s intellectual property plays an important role in
maintaining its competitive position, no single patent, prototype, tool or
technology or trade secret, in the opinion of management, is of such value to
the Company that its business would be materially affected by the expiration or
termination thereof. The Company’s general policy is to apply for patents on an
ongoing basis, in appropriate countries, on its patentable developments which
are considered to have commercial significance.




The
Company’s Raw Materials and Suppliers




Raw
materials used by the Company in the design, prototyping and manufacture of its
products primarily include steel, aluminum, resins, precious metals, chemicals
and electronics components, which are readily available. The Company does not
anticipate significant interruption in the supply of raw materials.




Impact
of Environmental Regulations on the Company




The
Company is subject to the requirements of federal, state, local and foreign
environmental and occupational safety and health laws and regulations. These
include laws regulating air emissions and water discharge. The Company is also
subject to environmental laws requiring the Company to obtain licenses for a
number of technologies currently undergoing development. Such licenses are
needed for field testing of the Company’s RiverPower, FireSAFE, PVC Cable
recycling and Red Mud Neutralization technologies.




During
2008, the Company did not make any material capital expenditures relating to
environmental compliance.




The
Company’s Website and Access to Available Information




The
Company’s current and periodic reports filed with the Securities and Exchange
Commission, including amendments to those reports, may be obtained through its
internet website at www.poweroftehdream.com free of charge as soon as reasonably
practicable after the Company files these reports with the SEC.




Item1.A.
            Risk
      Factors


We have a limited
operating history, which makes your evaluation of our business difficult. We
haveincurred losses in recent periods for start-up efforts and may incur losses in
the future.




We were
recently organized and only recently completed our acquisition of Vidatech,
which itself has had limited operations. Our future is dependent upon our
ability to obtain financing and upon future profitable operations from the
commercial exploitation of the technologies in which we invest, acquire or
license. These factors raise substantial doubt that we will be able to continue
as a going concern. From April 26, 2006 (inception) through December 31, 2008,
we incurred aggregate losses of $7,036.548 and anticipate incurring additional
losses for at least the next twelve (12) months.




We will
require additional financing to sustain our operations and without it we will
not be able to continue operations.




Our
ability to obtain additional funding will determine our ability to continue as a
going concern. Our financial statements do not include any adjustments that
might result from the outcome of this uncertainty.




Management
believes the Company has adequate capital to keep the Company functioning
through December 31, 2009. However, the need may arise, in the normal course of
business, to raise additional capital if we want to accelerate development work,
for the acquisioton of additional technologies, or to meet unforeseen financial
needs.. No assurance can be given that the Company can obtain additional working
capital, or if obtained, that such funding will not cause substantial dilution
to shareholders of the Company. If the Company is unable to raise additional
funds, if needed, it may be forced to change or delay its contemplated marketing
and business plan. Being a development stage company, the Company is subject to
all the risks inherent in the establishment of a new enterprise and the
marketing and manufacturing of a new product, many of which risks are beyond the
control of the Company. All of the factors discussed above raise substantial
doubt about the Company’s ability to continue as a going
concern.


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Our
future is dependent upon our ability to obtain financing. If we do not obtain
such financing, we may have to cease research activities and investors could
lose their entire investment.  We have no arrangements or agreements
with any person regarding any potential future financings.


Other
than our right to market, sell and distribute the TothTelescope, from which we
have not derived any meaningful revenues, we currently do not have, and may
never develop or acquire any  commercialized products for distribution
and sale.




We
currently do not have any commercialized product(s) or any significant source of
revenue. We have invested substantially all of our time and resources over the
last two years in identification, research and development of technologies. The
technologies, which are the subject of our ongoing research programs, will
require additional development, clinical evaluation, regulatory approval,
significant marketing efforts and substantial additional investment before they
can provide us with any revenue. We cannot currently estimate with any accuracy
the amount of funds that may be required because it may vary significantly
depending on the results of our current research and development activities,
product testing, costs of acquiring licenses, changes in the focus and direction
of our research and development programs, competitive and technological
advances, the cost of filing, prosecuting, defending and enforcing patent
claims, the regulatory process, manufacturing, marketing and other costs
associated with the commercialization of products following receipt of approval,
if required, from regulatory bodies and other factors.




Our
efforts may not lead to commercially successful products for a number of
reasons, including:




-
            we
      may not be able to obtain regulatory approvals, if required, or the
      approved indication may be narrower than we
  seek;




-
            our
      technologies or products, if any, derived from our research and
      development efforts may not prove to be safe and effective in clinical
      trials or testing;




-
            any
      products that may be approved may not be accepted in the
      marketplace;




-
            we
      may not have adequate financial or other resources to complete the
      development and commercialization of products derived from our research
      and development efforts;




-
            we
      may not be able to manufacture our products in commercial quantities or at
      an acceptable cost; and




-
            rapid
      technological change may make our technologies, and products derived from
      those technologies, obsolete.


We
expect to operate in a highly competitive market; we may face competition from
large, well-established companies with significant resources, and against which
we may not be able to effectively compete.




Our
commercial success will depend on our ability and the ability of our
sublicensees, if any, to compete effectively in product development, customer
compliance, price, marketing and distribution. There can be no assurance that
competitors will not succeed in developing products that are more effective than
any products derived from our research and development efforts or that would
render such products obsolete and non-competitive.


15
 Index




The
technology sector is characterized by intense competition, rapid product
development and technological change. We expect that most of the competition
that we will encounter will come from companies, research institutions and
universities who are researching and developing technologies and products
similar to or competitive with any we may develop.




These
companies may enjoy numerous competitive advantages, including:




-
            significantly
      greater name recognition;




-
            established
      distribution networks;




-
            additional
      lines of products, and the ability to offer rebates, higher discounts or
      incentives to gain a competitive
advantage;




-
            greater
      experience in conducting research and development, manufacturing,
      obtaining regulatory approval for products, and marketing approved
      products; and




-
            greater
      financial and human resources for product development, sales and
      marketing, and patent litigation.




As a
result, we may not be able to compete effectively against these companies or
their products.


The
success of our research and development effort is uncertain and we expect to be
engaged in research and development efforts for a considerable period of time
before we will be in a position, if ever, to develop and commercialize products
derived from our technologies.




We expect
to continue our current research and development programs through at least the
end of 2009. Research and development activities, by their nature, preclude
definitive statements as to the time required and costs involved in reaching
certain objectives. Actual costs may exceed the amounts we have
budgeted and actual time may exceed our expectations. If our research and
development requires more funding or time than we anticipate, then we may have
to reduce technological development efforts or seek additional financing. There
can be no assurance that we will be able to secure any necessary additional
financing or that such financing would be available to us on favorable terms.
Additional financings could result in substantial dilution to existing
shareholders. Even if we are able to fully fund our research and development
program, there is no assurance that, even upon successful completion of our
program, we will ever be able to commercialize products, if any, derived from
our research efforts or that we will be able to generate any revenues from
operations.


Our
research and development programs are in the preliminary development stage and
the results we attain may not prove to be adequate for purposes of developing
and commercializing any products or otherwise to support a profitable business
venture.




Our
research and development programs are in the preliminary development stage.
 We will require significant further research, development, testing and
regulatory approvals and significant additional investment before we will be in
a position to attempt to commercialize products derived from our research and
development programs. We cannot currently estimate with any accuracy the amount
of these funds because it may vary significantly depending on the results of our
research and development activities, product testing, costs of acquiring
licenses, changes in the focus and direction of our research and development
programs, competitive and technological advances, the cost of filing,
prosecuting, defending and enforcing patent claims, the regulatory process,
manufacturing, marketing and other costs associated with commercialization of
products following receipt of approval from regulatory bodies and other
factors.


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 Index




There can
be no assurances that our early stage research will be successful. The ultimate
results of our ongoing research programs may demonstrate that the technologies
being researched by us may be ineffective, unsafe or unlikely to receive
necessary regulatory approvals. If such results are obtained, we will be unable
to create marketable products or generate revenues and we may have to cease
operations.


We
intend to conduct sales and marketing efforts internally, but lack sales and
marketing experience. Additionally, we may rely on third party marketers, in
which case, we will be dependent on their efforts.




We expect
to market and sell or otherwise commercialize our technologies (or any products
derived from the technologies) ourselves as well as through distribution,
co-marketing, co-promotion or licensing arrangements with third parties. We have
no experience in sales, marketing or distribution of such technologies or
products and our current management and staff is not experienced or trained in
these areas. Accordingly, if our attempts to market any products directly are
not successful, our business may be adversely affected. To the extent that we
enter into distribution, co-marketing, co-promotion or licensing arrangements
for the marketing or sale of our technologies (or any products derived from the
technologies) any revenues received by us will be dependent on the efforts of
third parties. If such parties were to breach or terminate their agreement with
us or otherwise fail to conduct marketing activities successfully and in a
timely manner, the commercialization of our technologies (or any products
derived from the technologies) would be delayed or terminated.


There
are risks associated with our proposed operations in Hungary.




Special
risks may be associated with our efforts to undertake operations in the Republic
of Hungary. Such operations will be subject to political, economic and other
uncertainties, including among other things, import, export and transportation
regulations, tariffs, taxation policy, including royalty and tax increases and
retroactive tax claims, exchange controls, currency fluctuations and other
uncertainties arising out of the Republic of Hungary’s sovereignty over our
operations.


Fluctuation
in the value of the Hungarian Forint relative to other currencies may have a
material adverse effect on our business and/or an investment in our
shares.




We
maintain our books in local currency: U.S. dollars for Power of the Dream in the
United States and the Hungarian Forint for Vidatech in Hungary. Our operations
are conducted primarily outside of the United States through Vidatech, our
wholly-owned subsidiary. As a result, fluctuations in currency exchange rates
may significantly affect our sales, profitability and financial position when
the foreign currencies, primarily the Hungarian Forint, of our international
operations are translated into U.S. dollars for financial reporting. During
2008, the Hungarian Forint has fluctuated between HUF 220 and HUF 145 to the
U.S. dollar. In addition, we are also subject to currency fluctuation risk
with respect to certain foreign currency denominated receivables and payables.
Although we cannot predict the extent to which currency fluctuations may or will
affect our business and financial position, there is a risk that such
fluctuations will have an adverse impact on our sales, profits and financial
position. Because differing portions of our revenues and costs are denominated
in foreign currency, movements could impact our margins by, for example,
decreasing our foreign revenues when the dollar strengthens and not
correspondingly decreasing our expenses. We do not currently hedge our currency
exposure. In the future, we may engage in hedging transactions to mitigate
foreign exchange risk.


Our
management team has limited experience in public company matters, which could
impair our ability to comply with legal and regulatory
requirements.




Our
management team has had limited experience managing a U.S. public company, which
could impair our ability to comply with legal and regulatory requirements, such
as the Sarbanes-Oxley Act of 2002 and applicable federal securities laws,
including filing on a timely basis required reports and other required
information. Our management may not be able to implement programs and policies
in an effective and timely manner that adequately responds to increased legal or
regulatory compliance and reporting requirements imposed by such laws and
regulations. Our failure to comply with such laws and regulations could lead to
the imposition of fines and penalties and further result in the deterioration of
our business.


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 Index




Investor
confidence and the market price of our shares may be adversely impacted if we or
our independent registered public accountants are unable to issue an unqualified
opinion on the adequacy of our internal controls over our financial
reporting.




We are
subject to the reporting requirements of the U.S. Securities and Exchange
Commission, or SEC. The SEC, as directed by Section 404 of the U.S.
Sarbanes-Oxley Act of 2002, adopted rules requiring public companies to include
a report of management on their internal control structure and procedures for
financial reporting in their annual reports on Form 10-K that contain an
assessment by management of the effectiveness of their internal controls over
financial reporting. These requirements first applied to our annual report on
Form 10-KSB for the fiscal year ending on December 31, 2007, however the
independent public accountants’ report will not be required until our fiscal
year ending December 31, 2009. Our management may not conclude that our internal
controls over financial reporting are effective. Any failure to implement
effective controls, or difficulties encountered in their implementation, could
harm our operating results or cause us to fail to meet our reporting
obligations. Moreover, even if our management does conclude that our internal
controls over financial reporting are effective, if our independent registered
public accountants are not satisfied with our internal control structure and
procedures, the level at which our internal controls are documented, designed,
operated or reviewed, or if the independent registered public accountants
interpret the requirements, rules or regulations differently from us, they may
not concur with our management’s assessment or may not issue a report that is
unqualified. Any of these possible outcomes could result in an adverse reaction
in the financial marketplace due to a loss of investor confidence in the
reliability of our financial statements, which could lead to a decline in the
market price of our shares.


Concentration
of ownership among our directors, executive officers and principal shareholders
may prevent new investors from influencing significant corporate
decisions.




Based
upon beneficial ownership as of December 31, 2008, our directors, executive
officers and holders of more than 5% of our common stock, alone or together with
their affiliates own, in the aggregate, approximately 75% of our outstanding
shares of common stock. As a result, these shareholders, will be able to
exercise a controlling influence over matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions, and will have significant control over our management and
policies. Some of these persons or entities may have interests that are
different from yours. For example, these shareholders may support proposals and
actions with which you may disagree or which are not in your interests. The
concentration of ownership could delay or prevent a change in control of our
company or otherwise discourage a potential acquirer from attempting to obtain
control of our company, which in turn could reduce the price of our common
stock. In addition, these shareholders, some of whom have representatives
sitting on our Board of Directors, could use their voting influence to maintain
our existing management and directors in office, delay or prevent changes of
control of our company, or support or reject other management and board
proposals that are subject to stockholder approval, such as amendments to our
employee stock plans and approvals of significant financing
transactions.


We
will need to hire additional employees as the number of technologies in which we
have an interest increases.




We
anticipate that it will be necessary for us to add employees with technology and
management experience as well as support staff to accommodate the increasing
number of technologies we acquire. We may also need to provide additional
scientific, business, accounting, legal or investment training for our hires.
There is competition for highly qualified personnel, and we may not be
successful in our efforts to recruit and retain highly qualified
personnel.


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We
do not intend to pay dividends for the foreseeable future.




We
currently intend to retain future earnings, if any, to support the development
and expansion of our business and do not anticipate paying cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our Board of Directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit or other agreements that we may
be a party to at the time. Accordingly, investors must rely on sales of their
common stock after price appreciation, which may never occur, as the only way to
realize their investment.


We
may conduct further offerings in the future, in which case your percentage
interest in our Company will be diluted.




Since
inception, we have relied on sales of our common stock to fund our operations.
We may conduct further offerings in the future to finance our current projects
or to finance subsequent projects that we decide to undertake. If common stock
is issued in return for additional funds, the price per share could be lower
than that paid by our current shareholders. We anticipate continuing to rely on
equity sales of our common stock in order to fund our business operations. If we
issue additional stock, your percentage interest in us will be diluted and the
value of your stock could be reduced.


We
may issue preferred stock which may have greater rights than our common
stock.




We are
permitted in our Certificate of Incorporation to issue up to 10,000,000 shares
of preferred stock. Currently no preferred shares are issued and outstanding;
however, we can issue shares of our preferred stock in one or more series and
can set the terms of the preferred stock without seeking any further approval
from our common shareholders. Any preferred stock that we issue may rank ahead
of our common stock in terms of dividend priority or liquidation premiums and
may have greater voting rights than our common stock. In addition, such
preferred stock may contain provisions allowing it to be converted into shares
of common stock, which could dilute the value of common stock to current
shareholders and could adversely affect the market price, if any, of our common
stock.


Our
common stock is a “penny stock,” and because “penny stock” rules will apply, you
may find it difficult to sell the shares of our common stock you acquired in
this offering.




Our
common stock is a “penny stock” as that term is defined under Rule 3a51-1 of the
Securities Exchange Act of 1934. Generally, a “penny stock” is a common stock
that is not listed on a securities exchange and trades for less than $5.00 a
share. Prices often are not available to buyers and sellers and the market for
penny stocks may be very limited. Penny stocks in start-up companies are among
the riskiest equity investments. Broker-dealers who sell penny stocks must
provide purchasers of these stocks with a standardized risk-disclosure document
prepared by the SEC. The document provides information about penny stocks and
the nature and level of risks involved in investing in the penny stock market. A
broker must also give a purchaser, orally or in writing, bid and offer
quotations and information regarding broker and salesperson compensation, make a
written determination that the penny stock is a suitable investment for the
purchaser, and obtain the purchaser’s written agreement to the purchase. Many
brokers choose not to participate in penny stocktransactions. Because of
the penny stock rules, there is less trading activity in penny stocks and you
are likely to have difficulty selling your shares.


Because
our business assets, directors, and officers are located outside of the United
States, our shareholders may be limited in their ability to enforce civil
actions against our assets or our directors and officers.




We are
incorporated under the laws of Delaware but, because we are headquartered in
Hungary, all of our officers reside in Hungary. Of our Board of Directors one
resides in Hungary and one in the United States. Therefore our shareholders may
have difficulty enforcing civil liabilities under the U.S. federal securities
laws against our officers and directors. Because some of our assets are located
outside the U.S., it may be difficult for an investor to succeed in an action,
for any reason, against us or any of our directors or officers through U.S.
jurisdictions. If an investor was able to obtain a judgment against us or any of
our directors or officers in a U.S. court based on U.S. securities or other
laws, it may be difficult to enforce such judgment in Hungary. We are uncertain
as to the enforceability, in original actions in Hungarian courts, of liability
based upon the U.S. federal securities laws and as to the enforceability in
Hungarian courts of judgments of U.S. courts obtained in actions based upon the
civil liability provisions of the U.S. federal securities laws.


19
 Index




Our
compliance with changing laws and rules regarding corporate governance and
public disclosure may result in additional expenses to us which, in turn, may
adversely affect our ability to continue our operations.




Keeping
abreast of, and in compliance with, changing laws, regulations and standards
relating to corporate governance and public disclosure, including the
Sarbanes-Oxley Act of 2002, new SEC regulations and, in the event we are ever
approved for listing on either NASDAQ or a registered exchange, NASDAQ and stock
exchange rules, will require an increased amount of management attention and
external resources. We intend to continue to invest all reasonably necessary
resources to comply with evolving standards, which may result in increased
general and administrative expenses and a diversion of management time and
attention from revenue-generating activities to compliance activities. This
could have a materially adverse effect on our ongoing operations.




ITEM2.
            DESCRIPTION
      OF PROPERTY




The
Company’s principal executive offices are located at Soroksari ut 94-96,
Budapest, Hungary. The offices are leased on a monthly basis for a fee of
$1,100. The premises consist of approximately 1,000 square feet of
space.


ITEM3.
            LEGAL
      PROCEEDINGS




There are
no legal proceedings against the company. We are not aware of any threatened or
pending legal proceedings against the company.




ITEM4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS




None.


20
 Index




PART
II




ITEM5.
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
      ISSUER PURCHASES OF EQUITY
SECURITIES




Safe
Harbor for Forward-Looking Statements




When used
in this report, the words “may,” “will,” “expect,”
“anticipate,”  “continue,” “estimate,” “project,” “intend,” and
similar expressions are intended to identify forward-looking statements within
the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the
Securities Exchange Act of 1934 regarding events, conditions, and financial
trends that may affect the Company’s future plans of operations, business
strategy, operating results, and financial position.  Persons
reviewing this report are cautioned that any forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties and
that actual results may differ materially from those included within the
forward-looking statements as a result of various factors.  Such
factors are discussed further elsewhere in this annual report and also include
general economic factors and conditions that may directly or indirectly impact
our financial condition or results of operations.




Market
Information




The
Company’s common stock is listed on the OTC Bulletin Board (OTCBB) in the United
States under the symbol “PWRV.” Our common began
trading on the OTC Bulletin Board on February 21, 2008.  There was no
trading activity of our common stock prior to February 21, 2008. Trading in our
common stock has been limited and sporadic. The following table shows the range
of high and low bid quotations reported by OTCBB in each fiscal quarter from
January 1, 2006 to December 31, 2007. The OTCBB quotations below reflect
inter-dealer prices without retail mark-up, mark-down or commission and may not
represent actual transactions.







High
                  
                  
                  LowFiscal
      2007Quarter
      Ended March 31, 2007
                  
                  
                  -
                  
                  
                  
                  -Quarter
      Ended June 30, 2007
                  
                  
                  -
                  
                  
                  
                  -Quarter
      ended September 30, 2007
                  
                  
                  -
                  
                  
                  
                  -Quarter
      ended December 31, 2007
                  
                  
                  -
                  
                  
                  
                  -Fiscal
      2008Quarter
      Ended March 31, 2008
                  
                  $
                  4.00
                  
                  
                  $
                  3.90Quarter
      Ended June 30, 2008
                  
                  $
                  4.00
                  
                  
                  $
                  1.85Quarter
      ended September 30, 2008
                  
                  $
                  2.00
                  
                  
                  $
                  0.10Quarter
      ended December 31, 2008
                  
                  $
                  1.00
                  
                  
                  $
                  0.17


21
 Index




Holders




As of
December 31, 2008, the Company had 47,615,181 shares of its common stock
$0.0001 par value outstanding, which were owned by approximately
115 shareholders of record.




Transfer
Agent




Our
transfer agent is Fidelity Transfer Company, 8915 S. 700 E. Suite 102, Sandy, UT
84070. Our transfer agent’s telephone number is (801) 562-1300.




Dividend
Policy




We have
not declared any dividends on our common stock since inception and do not intend
to pay dividends on our common stock in the foreseeable future.




Authorization
of Securities for Issuance Under Equity Compensation Plans




None.




Recent
Sales of Unregistered Securities





On
October 8, 2008, Power of the Dream Ventures, Inc. (the “Company”) entered into
a Standby Equity Distribution Agreement (the “Standby Equity Distribution
Agreement”) with YA Global Investments, L.P. (the “Investor”). Pursuant to the
terms of the Standby Equity Distribution Agreement, the Company (a) agreed to
issue and sell to the Investor up to $5,000,000 of shares of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”) in tranches of
equity, based upon a specified discount to the market price of the Common Stock,
calculated over the five trading days following notice by the Company of an
election to sell shares; and (b) issued to the Investor a warrant (the
“Warrant”) to purchase 4,027,386 shares of Common Stock at the exercise price
per share of $0.29.




In
connection with the Standby Equity Distribution Agreement, the Company entered
into a Registration Rights Agreement with the Investor (the “Registration Rights
Agreement”) pursuant to which the Company agreed to register for resale the
shares of Common Stock that may be purchased by the Investor pursuant to the
Standby Equity Distribution Agreement, the shares of Common Stock issuable upon
exercise of the Warrant and 2,000,000 shares of Common Stock (the “Commitment
Shares”) issued to the Investor as a commitment fee pursuant to the terms of the
Standby Equity Distribution Agreement. As of December 31, 2008 we have not yet
exercised any of these funds.




On
November 20, 2008, the Company consummated a private placement of 2,500,000
shares of its common stock to one investors for an aggregate purchase price of
$1,000,000. The shares of common stock were sold to non-US Persons in reliance
on the exemptions from the registration requirements of the Securities Act
provided by the provisions of Regulation S as promulgated under the Securities
Act. Proceeds from the offering are used for general corporate
expenses.




On
January 30, 2008, the Company consummated a private placement of 104,000 shares
of its common stock to four investors for an aggregate purchase price of
$104,000 at a per share price of $3.25. The shares of common stock were sold to
non-US Persons in reliance on the exemptions from the registration requirements
of the Securities Act provided by the provisions of Regulation S as promulgated
under the Securities Act. Proceeds from the offering are used for general
corporate expenses.




Issuer
Purchases Of Equity Securities




None.


22
 Index




ITEM6.
            SELECTED
      FINANCIAL DATA







2008
                      
                      
                      2007Revenues
                      
                      
                      -
                      
                      
                      
                      -General
      and administration expenses
                      
                      
                      3,249,997
                      
                      
                      
                      1,805,366Research
      and development
                      
                      
                      425,974
                      
                      
                      
                      101,383Net
      loss
                      
                      
                      3,958,212
                      
                      
                      
                      1,992,472




For the
year ended December 31, 2008, we had $0 revenue as compared the $0 revenue in
the same period in the previous year. The Company is still focused on product
development. First revenues are expected to occur in 2009. For the years ended
December 31, 2008 general, selling and administrative expenses were $3,249,997
as compared to $1,805,366 for the year ended December 31, 2007.




ITEM7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS




Plan
of Operation





Since
inception through December 31, 2008, we had a deficit accumulated during the
development stage of $6,236,547 and net cash used in operations of
$1,320,180. To date all of our funding has been provided through sale of
our common stock.  We believe that the recent funding from the private
placement of the Company’s common shares will allow us to continue operations
and execute our business plan to the end of 2009.  Should the need
arise, we plan to raise additional funds, both from U.S. and international
investors. We believe that the technologies we currently have under
management, many of which are environmentally friendly, green technologies, will
prove attractive to both private and institutional investors, making fund
raising a less strenuous process than it was before. We also believe that as the
only Hungarian public (or private) company that is actively engaged in Hungarian
intellectual property acquisition and commercialization, we are an even more
attractive investment opportunity.




If
needed, we will raise additional capital in a manner that is the least dilutive
to our shareholders yet at the same time serves our development and operating
needs. We anticipate no more than two additional fund raising round in 2009,
after which we hope to rely solely on income generated from our technologies
under management. We believe 2009 will result in a number of licensing
opportunities and revenue generating opportunities from the deployment of our
technologies on the international market. Foremost of these opportunities is
RiverPower, FireSAFE and our PVC shielded electric cable recycling technologies.
We also anticipate our investment in in4 Ltd to start generating funds in the
second half of 2009.





FireSAFE
is currently completing independent testing. If these test results demonstrate
the commercial viability of FireSAFE we anticipate product roll out to commence
in the first half of 2009 in cooperation with FireLess, Ltd. a Hungarian Limited
Liabily company whom acquired a license for FireSAFE in August of 2008; our PVC
cable recycling technology will undergo third party technology verification in
the first half of 2009, following which further action will be decided upon
based on these test results.; RiverPower is currently completing a second round
of independent testing and technology optimization studios. Once results from
these tests are obtained and analized we anticipate installing a full sized
version of the machine for real-life river testing in the second half of 2009.
In4 Ltd has launched a call for 1,000 beta testers of their iGlue technology on
February 2, 2009. Once all spaces are filled a five week limited beta will
commence. Feedback from this test will be incorporated into the iGlue followed
by a full, world-wide open beta in prior to the second half of
2009.


23
 Index


Even
though we believe our public status will allow us to raise additional capital,
if needed, no assurance can be given that we can in fact obtain additional
working capital, or if obtained, that such funding will not cause substantial
dilution to shareholders of the Company. If we are unable to raise additional
funds, we may be forced to change or delay our contemplated marketing
and business plan.




In 2009
we anticipate spending approximately $250,000 on general administrative
expenses, $150,000 on legal, accounting and compliance related expenses, 100,000
on continued development of our RiverPower technology, and $200,000 on our in4
investment. All other technologies in our portfolio are currently on hold until
we a) either raise more financing b) realize revenue from the three technologies
described above.




Our
commitment to in4 Ltd. to provide HUF 48,000,000 (approximately US$270,000) has
been fulfilled as of December 31, 2008. However we have elected to continue
finance in4 operations on a continuous basis going forward until iGlue enters
the market and starts generating revenue for the company. This financing is
provided on a member loan basis to in4 Ltd. We also have ongoing lease
obligations for company cars in the amount of approximately US$5,000 per
month.




We also
have an outstanding note in the amount of $250,000 payable to Mary Passalaqua,
our former President and CEO.  This note, which bears interest at the
U.S. prime rate and is due and payable April 5, 2009, was issued immediately
prior to the reverse merger and assumed by us in connection with the reverse
merger. The note was recorded by us as additional compensation to Ms.
Passalaqua.  Such compensation is reflected in our condensed balance sheet
as the accumulated deficit of the Company, and will not be reflected in our
statement of operations, as such compensation expense was structured as an
expense prior to our recapitalization.  In the event that we raise in
excess of $3,000,000 dollars in capital the note is payable
immediately.





On
November 21, 2008 we provided a payment of $35,000 toward the $250,000 NOTE,
therefore reducing our NOTE outstanding to $215,000 plus accumulated
interest.




On
February 5, 2009 we entered into restricted stock agreements with certain of our
employees, pursuant to which we granted a total of 760,000 shares of restricted
common stock.  The shares will vest in installments, with all shares
vesting by the end of 2009. We estimate the total fair value of these share
issuances is approximately $304,000, the entire amount of which will be
recognized as an expense in 2009.”




Being a
development stage company, we are subject to all the risks inherent in the
establishment of a new enterprise and the marketing and manufacturing of new
products, many of which risks are beyond the control of the Company. Many of our
technologies are in the preliminary development stage. While international
patent searches have been conducted to verify the patentability of these
technologies, many of the actual patents are still being prepared. As of this
writing we have filed the following patent applications: 2 Hungarian and two PCT
applications for RiverPower; one Hungarian and one PCT application for FireSAFE;
one Hungarian application for our Desalination technology; one Hungarian
application for our PVC shielded electric cable recycling technology; one
Hungarian application communal waste additive to concrete technology and one
Hungarian application four our biodegradable deicing solution. All other patents
relating to additional properties we own are currently being prepared. market
conditions permitting we intend to file these patents in 2009.




Over the
course of the next 12 months we plan to focus on four primary technologies in
order to become cash flow positive: RiverPower, FireSAFE, PVC shielded cable
recycling and our investment in in4 Ltd. We anticipate completing a full scale
version of our RiverPower device in 2009, complete with a power generating
electrical generator. We also anticipate bringing to market, and deriving
revenue from, our FireSAFE and PVC shielded cable recycling technologies. In
addition. We also hope to release a full world-wide beta of iGlue following
culminations of the current 1,000 beta tester limited release of the
program.


24
 Index


Although
we see our position and the strength of the technologies we acquired as
formidable, there can be no assurance that any of the possibilities discussed
above will materialize. If we are unable to derive revenue from our technologies
within the next 12 months we will be required to raise additional capital to
support our operations until such time when we can maintain operations from
income.





We don’t
anticipate making any substantial equipment purchase or increasing our work
force in the foreseeable future.




All of
the factors discussed above raise substantial doubt about our ability to
continue as a going concern. The condensed consolidated financial statements
included elsewhere in this prospectus do not include any adjustments relating to
the recoverability of recorded asset amounts that might be necessary as a result
of the above uncertainty.




2008 Overview
and Financial Results




The
high-technology development and commercialisation industry remains challenging
in North America and Europe, with continued market share pressures concentrated
in the U.S. While our transition from a private company to a public one
following our reverse merger significantly increased our compliance related
financial burden, it also provided us with opportunities to seek financing for
the execution of our business plan. Based on this financing we were able to
significantly increase our technology acquisition and development footprint, and
lay the foundation of fully executing our business strategy beginning in 2008
and 2009.


Debt
and Capital Structure




Future
maturities of the Company’s debt are as follows: 2009 — $235,000. The
Company continues to explore opportunities to enhance liquidity, improve
financial flexibility and reduce the long term costs of capital.


Critical
Accounting Estimates




The
consolidated financial statements accompanying this Annual Report on
Form 10-K have been prepared in conformity with accounting principles
generally accepted in the United States and, accordingly, the Company’s
accounting policies have been disclosed in Note 2 to the consolidated
financial statements.




We
account for stock-based compensation in accordance with SFAS No. 123(R). Under
the fair value recognition provisions of this statement, share-based
compensation cost is measured at the grant date based on the fair value of the
award and is recognized as expense over the requisite service period.
Determining the fair value of share-based awards at the grant date requires
judgment. If actual results differ significantly from these estimates,
stock-based compensation expense and our results of operations could be
materially impacted.




When more
than one accounting principle, or the method of its application, is generally
accepted, management selects the principle or method that it considers to be the
most appropriate given the specific circumstances. Application of these
accounting principles requires the Company’s management to make estimates about
the future resolution of existing uncertainties. Estimates are typically based
upon historical experience, current trends, contractual documentation, and other
information, as appropriate. Due to the inherent uncertainty involving
estimates, actual results reported in the future may differ from those
estimates. In preparing these financial statements, management has made its best
estimates and judgments of the amounts and disclosures included in the financial
statements.


25
 Index




Environmental
Matters




The
Company is subject to the requirements of federal, state, local and foreign
environmental and occupational safety and health laws and regulations. These
include laws regulating air emissions and water discharge. The Company is also
subject to environmental laws requiring the Company to obtain licenses for a
number of technologies currently undergoing development. Such licenses are
needed for field testing of the Company’s RiverPower, FireSAFE, PVC Cable
recycling and Red Mud Neutralization technologies.




During
2008, the Company did not make any material capital expenditures relating to
environmental compliance.


Income
Taxes




The
Company accounts for income taxes in accordance with SFAS No. 109,
“Accounting for Income Taxes”. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The Company records a
valuation allowance on deferred tax assets by tax jurisdiction when it is more
likely than not that such assets will not be realized. Management judgment is
required in determining the Company’s valuation allowance on deferred tax
assets.


Results
of Operations




Revenue




For the
year ended December 31, 2008, we had $0 revenue as compared the $0 revenue in
the same period in the previous year. The Company is still focused on product
development. First revenues are expected to occur in 2009.




General,
selling and administrative expenses




For the
years ended December 31, 2008 general, selling and administrative expenses were
$3,249,997 as compared to $1,805,366 for the year ended December 31, 2007. Of
the $1,444,631 increase in general, selling and administrative expenses,
$1,093,224 is attributable to marketing expenses and $921,250 is attributable to
share based payments to personnel. At the same time the Company decreased its
expenses by $569,843 compared to 2007 in consulting. During 2007 the company
hired four employees to expand its work force, including a Chief Financial
Officer, a Chief Accounting Officer, a Chief Technology Officer. In addition to
these a Technology Assistant was also hired to aid in managing the technology
portfolio of the company. On a going forward basis, the company anticipates
adding additional employees on an as needed basis.


Inflation
and foreign currency




The
Company maintains its books in local currency: US Dollars for the parent holding
Company in the United States of America and Hungarian Forint for Vidatech in
Hungary.




The
Company’s operations are primary outside of the United States through its wholly
owned subsidiary. As a result, fluctuations in currency exchange rates may
significantly affect the Company’s sales, profitability and financial position
when the foreign currencies, primarily the Hungarian Forint, of its
international operations are translated into U.S. dollars for financial
reporting. In additional, we are also subject to currency fluctuation risk with
respect to certain foreign currency denominated receivables and payables.
Although the Company cannot predict the extent to which currency fluctuations
may or will affect the Company’s business and financial position, there is a
risk that such fluctuations will have an adverse impact on the Company’s sales,
profits and financial position. Because differing portions of our revenues and
costs are denominated in foreign currency, movements could impact our margins
by, for example, decreasing our foreign revenues when the dollar strengthens and
not correspondingly decreasing our expenses. The Company does not currently
hedge its currency exposure. In the future, we may engage in hedging
transactions to mitigate foreign exchange risk.


26
 Index




The
translation of the Company’s subsidiaries forint denominated balance sheets into
U.S. Dollars, as of December 31, 2008, has been affected by the strengthening of
the U.S. Dollar against the Hungarian Forint from 172.82 HUF/USD as of December
31, 2007, to 188.52 HUF/USD as of December 31, 2008, an approximate 9% increase
in value. The average Hungarian Forint/U.S. Dollar exchange rates used for the
translation of the subsidiaries forint denominated statements of operations into
U.S. dollars, for the years ended December 31, 2008 and 2007 were 171.78 and
184.66, respectively.


Liquidity




The
Company’s cash and liquidity needs are impacted by research and development
expenses, legal, accounting and regulatory filing expenses and operating
expenses. At the current rate monthly expenditures, including operating expenses
and technology management total approximately $50,000.




Cash
and Equivalents




As of
December 31, 2008 and 2007, consolidated cash and equivalent
balances totalled $650,945 and $182,780, respectively. As of December 31,
2008 approximately 99% of the Company’s cash balance is located in
jurisdictions outside of the U.S. The Company’s ability to efficiently
access cash balances in foreign jurisdictions is subject to local regulatory and
statutory requirements.




Cash
Flows




Sale of
common stock. To date all of the Company’s operations have been financed through
the sale of common stock. It is anticipated that this trend will continue for at
least an additional twelve months before operating expenses can be fully or
partially by financed from operating activities.




Other
Debt and Capital Structure




Other
Debt




Additional
information related to the Company’s other debt and related agreements is set
forth in Note 8 “Note Payable” and Note 9 “Capital lease payable” to the
consolidated financial statements which are included in this Annual Report on
Form 10-K.




Off-Balance
Sheet Arrangements




None.




Recent
Accounting Pronouncements




In
September 2006, the FASB issued SFAS 157, Fair Value Measurement. The new
standard applies whenever other standards require or permit assets or
liabilities to be measured at fair value. This Statement defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. This statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007. The adoption of SFAS
157 for financial assets and liabilities did not have a material impact on its
consolidated financial position, results of operation or cash flows. FSP FAS
157-2 delayed the effective date for non-financial assets and liabilities to
fiscal years beginning after November 15, 2008. Adoption of SFAS 157 for
non-financial assets and liabilities will not have a material impact on the
Company’s consolidated financial position, results of operations or cash
flows.


27
 Index




In
September 2006, the staff of the SEC issued Staff Accounting Bulletin (“SAB”)
No. 108, which provides interpretive guidance on how the effects of the
carryover or reversal of prior year misstatements should be considered in
quantifying a current year misstatement. SAB 108 becomes effective in fiscal
2007. Adoption of SAB 108 did not have a material impact on the Company’s
consolidated financial position, results of operations or cash
flows.




In
February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115”, which permits entities to choose to measure many financial instruments and
certain other items at fair value. The fair value option established by this
Statement permits all entities to choose to measure eligible items at fair value
at specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. Adoption is required for fiscal years beginning
after November 15, 2007. Early adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of SFAS Statement No. 157, Fair Value
Measurements. Adoption of SFAS 159 did not have a material impact on the
Company’s consolidated financial position, results of operations or cash
flows.




In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
141(R)”). SFAS 141(R) replaces SFAS No. 141, “Business Combinations”, but
retains the requirement that the purchase method of accounting for acquisitions
be used for all business combinations. SFAS 141(R) expands on the disclosures
previously required by SFAS 141, better defines the acquirer and the acquisition
date in a business combination, and establishes principles for recognizing and
measuring the assets acquired (including goodwill), the liabilities assumed and
any non-controlling interests in the acquired business. SFAS 141(R) also
requires an acquirer to record an adjustment to income tax expense for changes
in valuation allowances or uncertain tax positions related to acquired
businesses. SFAS 141(R) is effective for all business combinations with an
acquisition date in the first annual period following December 15, 2008; early
adoption is not permitted. We will adopt this statement as of January 1, 2009.
The impact of SFAS 141(R) will have on our consolidated financial statements
will depend on the nature and size of acquisitions we complete after we adopt
SFAS 141(R).




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS
160 requires that non-controlling (or minority) interests in subsidiaries be
reported in the equity section of the company’s balance sheet, rather than in a
mezzanine section of the balance sheet between liabilities and equity. SFAS 160
also changes the manner in which the net income of the subsidiary is reported
and disclosed in the controlling company’s income statement. SFAS 160 also
establishes guidelines for accounting for changes in ownership percentages and
for deconsolidation. SFAS 160 is effective for financial statements for fiscal
years beginning on or after December 15, 2008 and interim periods within those
years. The adoption of SFAS 160 is not expected to have a material impact on our
financial position, results of operations or cash flows.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133” (SFAS 161). SFAS
161 requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting. SFAS
161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The adoption of SFAS 161 is not expected to have a material impact on our
financial position, results of operations or cash flows.




In March
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. This statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with US GAAP. This statement is effective 60 days
following the SEC’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles.




In May
2008, the FASB issued FSP Accounting Principles Board ("APB") 14-1 " Accounting
for Convertible Debt Instruments that may be settled in Cash upon Conversion
(Including Partial Cash Settlement) " ("FSP APB 14-1").  FSP
APB 14-1 requires the issuer of certain convertible debt instruments that
may be settled in cash (or other assets) on conversion to separately account for
the liability (debt) and equity (conversion option) components of the instrument
in a manner that reflects the issuer's non-convertible debt borrowing
rate.  FSP APB 14-1 is effective for fiscal years beginning after
December 15, 2008 on a retroactive basis.  The adoption of FSP
APB 14-1 is not expected to have a material impact on our financial
position, results of operations or cash flows.


28
 Index




ITEM8.
            FINANCIAL
      STATEMENTS




Reference
is made to the Consolidated Financial Statements of the Company, beginning with
the index thereto on page F-1.




ITEM9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




On
February 19, 2008, the Company, on the recommendation of its board of directors,
dismissed Marcum & Kliegman LLP (“M&K”) as its independent registered
public accounting firm.




M&K
did not issue any audit reports on the financial statements of the Company
during its engagement.




For the
fiscal years ended December 31, 2007 and 2006 and through the date of this
Current Report, there were no disagreements between the Company and M&K on
any matters of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of M&K, would have caused M&K to make
reference to the subject matter of the disagreement in their reports on the
Company’s financial statements for such years. None of the “reportable events”
described under Item 304(a)(1)(iv) of Regulation S-B occurred within the period
from August 15, 2007 through February 19, 2008 or through the date of this
report.




The
Company requested that M&K furnish it with a letter addressed to
the Securities and Exchange Commission confirming its dismissal by the
Company and whether or not it agrees with the statements made by the Company in
its Current Report on Form 8-K/A filed with the Securities and Exchange
Commission on February 28, 2008. A copy of the letter furnished by M&K in
response to that request, dated February 28, 2008, is filed as Exhibit 16.1 to
the said Form 8-K/A.




On
February 18, 2008, BDO Kontroll (“BDO”), was engaged as the Company’s
independent certified accountants. BDO was previously engaged as the independent
certified accountants for Vidatech Kft., the Company’s wholly-owned subsidiary,
during the period from April 26, 2006 (Inception) to December 31, 2006 and the
interim period from January 1, 2007 to April 10, 2007 (on which date the Company
acquired all of the issued and outstanding equity interest of Vidatech). During
the period from August 15, 2007  through February 19, 2008, and
through the date of the M&K’s engagement, we did not consult with BDO
regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii)
of Regulation S-B.




ITEM9A.
            CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures




Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules and forms and is accumulated and
communicated to the company’s management, as appropriate, to allow timely
decisions regarding required disclosure, and are operating in an effective
manner.




As of
December 31, 2008, we carried out an evaluation, under the supervision and with
the participation of our principal executive officer and our principal financial
officer of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our principal executive
officer and our principal financial officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this report.


29
 Index




Management’s
Annual Report on Internal Control Over Financial Reporting




Our
management is also responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f) and 15d-15(f). The Company’s internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.




Our
internal control over financial reporting includes those policies and procedures
that:





            Pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;





            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of the Company’s management
      and directors; and





            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Because of the inherent
limitations of internal control, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.




Management
conducted an evaluation, under the supervision and with the participation of our
principal executive officer and our principal financial officer of the
effectiveness of our internal control over financial reporting based on the
framework in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management concluded that the company’s internal control over financial
reporting was effective as of June 30, 2008.




This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.




Changes
in Internal Control Over Financial Reporting




There
were no changes in internal controls over financial reporting that occurred
during 2008 that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial
reporting.


30
 Index




ITEM9B.
            OTHER
      INFORMATION




2008
Annual Base Salary Rates




On
October 25 2007, the Board of Directors approved annual base salary rates
for the following executives:






2008
      Annual BaseName
      and Position
                      
                      Salary
      RateViktor
      Rozsnyay*
                      
                      $
                      13,006Chairman,
      President and Chief Executive OfficerDaniel
      Kun, Jr.
                      
                      $
                      21,850Vice
      PresidentIldiko
      Rozsa
                      
                      $
                      25,148Chief
      Financial OfficerMihaly
      Zala
                      
                      $
                      38,839Chief
      Technology OfficerSzilvia
      Toth
                      
                      
                      41,158Chief
      Accounting Officer




*Director
of the Company




Executive
Officer Appointment




On
October 24, 2007, the Board of Directors of the Company appointed Mr.
Daniel Kun, Jr. to serve as Vice President of the Company. As an extension of
the appointment, on February 5, 2009, the Company granted 200,000 restricted
stock units to Mr. Kun, vesting in equal installments on a quarterly basis
up to December 31, 2009.




On the
same day the Board of Directors of the Company appointed Mrs. Ildiko Rozsa to
serve as Chief Financial Officer of the Company. As an extension of the
appointment, on February 5, 2009,, the Company granted 120,000 restricted stock
units to Mrs. Rozsa, vesting in equal installments on a quarterly basis up to
December 31, 2009.




On the
same day the Board of Directors of the Company appointed Ms. Szilvia Toth to
serve as Chief Accounting Officer of the Company. As an extension of the
appointment, on February 5, 2009,, the Company granted 120,000 restricted stock
units to Ms. Toth, vesting in equal installments on a quarterly basis up to
December 31, 2009.




On August
24, 2007, the Board of Directors of the Company appointed Mr. Mihaly Zala
to serve as Chief Technology Officer of the Company. As an extension of the
appointment, on February 5, 2009,, the Company granted 120,000 restricted stock
units to Mr. Zala, vesting in equal installments on a quarterly basis up to
December 31, 2009.


31
 Index




PART
III




ITEM10.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
      COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
  ACT




The table
below sets forth the names and ages of our directors and executive officers as
of January 1, 2009:






Name
                  Age
                  PositionViktor Rozsnyay
                  38
                  Chairman
      of the Board, President & Chief Executive OfficerDaniel Kun,
      Jr.
                  34
                  Vice
      PresidentIldiko Rozsa
                  34
                  Chief
      Financial OfficerMihaly Zala
                  53
                  Chief
      Technology OfficerSzilvia Toth
                  28
                  Chief
      Accounting OfficerEugene
      L. Guhne
                  44
                  Member
      of the Board of
Directors




Viktor Rozsnyayhas served as
the Chairman, President & Chief Executive Officer of the Company since April
5, 2007. From April 2006 to present, Mr. Rozsnyay has been a Manager of Vidatech
Kft., a Hungarian company focused on the acquisition of technologies developed
in Hungary, of which he was a founder; Vidatech is now our wholly owned
Hungarian subsidiary. From 2004 to 2006 Mr. Rozsnyay was engaged in researching
and establishing the foundation of Vidatech. From 2001 to 2004, he was the
Founder and Chief Operating Officer of 10Charge, Inc., an ISSO R&D spin-off
company formed to commercialize 10 minute battery charging technology, a product
Mr. Rozsnyay and his former partners invented and patented. Prior thereto, Mr.
Rozsnyay was the Founder and Managing Director of ISSO R&D Kft., an
aerospace research company based in the Republic of Hungary, pursuing advanced
aerospace propulsion research. Mr. Rozsnyay attended the Jozsef Katona Technical
College in Budapest, graduating in 1989.




Daniel Kun, Jr.has served as
the Vice President of the Company since October 24, 2007. In April 2006 Mr. Kun
co-founded Vidatech Kft. and since its establishment has acted as Vidatech’s
Managing Director.  Vidatech is now our wholly owned Hungarian
subsidiary. Since 1996 Mr. Kun has been a part owner of Lira Kft., a Hungarian
company involved in building engineering and heating installations throughout
Hungary. From March 2000 to April 2006, he also acted as Managing Director of
Lira Kft. Mr. Kun attended the Istvan Vagi Technical College in Budapest,
graduating in 1992. Subsequently, Mr. Kun attended the Sligo Regional Technical
Colleague in Ireland studying international business and marketing from
1994-1995. Mr. Kun is a certified TUV ISO auditor.




Ildiko Rozsa has served as the
Chief Financial Officer of the Company since October 24, 2007.  Mrs.
Rozsa is a qualified statutory accountant, currently completing her PhD studies
at the Budapest Technical and Economic University in Business Science. Ms. Rozsa
graduated at the College of Finance and Accountancy, later obtaining her
mastered degree (MBA) at the Budapest University of Economics. From 1995 through
1996 she was audit assistant at Price Waterhouse’s Budapest Audit Department,
where she gained experience in IAS and HAS audits. From 1997 through 2002 Ms.
Rozsa was Finance and Accounting Director at Vivendi Telecom Hungary. Ms.
Rozsa was responsible for the production of Vivendi Group Consolidated Financial
Statements for 23 companies including foreign companies in accordance with IFRS,
US GAAP and the related statutory requirements; definition of the accounting
policy and procedures of the group, and controlling of their application.
Management of the related audits and Managing the Accounting Department, the
Reporting and Consolidation Department and the Payroll Department of Vivendi
Group which consists of approximately 60 persons. From 2002 through 2004 Ms.
Rozsa  was Chief Financial Officer at Bacardi-Martini Hungary Kft.,
where she was responsible for Managing the finance and administration team of
the company. Responsible for financial, accounting, controlling, IT, customs and
payroll activities. In 2004 she founded and became Managing Director, RIBZ
Consulting where she works for multinational clients on IFRS and US GAAP
projects, on privatization engagements. Ildiko is a tutor at the Budapest
Technical University, Economic Faculty.


32
 Index




Mihaly Zalahas served as the
Chief Technology Officer of the Company since August 24, 2007.  Mr.
Zala has a background in business, technology and management that spans over
thirty five years. Since 2005, Mr. Zala has been managing his own company, Zala
Project Builder Ltd. where he manages real estate projects including Gizella
Mill, a Casino and exhibition space in Erzsébet Square. From 1998 to
2005 Mr. Zala was an investor, planner, technical controller
and project manager at LAVINA Construction and Installation Co. Ltd. Prior
to that, from 1987 to 1998 he was planner, technical controller
and project manager at the Hungarian Post Office, Bureau for Planning and
Investment and MATÁV Rt., Bureau for Telecommunication Investment. Mr.
Zala holds an electrical engineering degree from the Budapest University of
Technology, Faculty of Electric Engineering.




Szilvia Toth has served as the
Chief Accounting Officer of the Company since October 24, 2007.Ms. Toth graduated in
2004 from the College of Finance and Accountancy in Budapest as an Economist on
Accountancy. After a short professional practice in 2005 she worked at DHL
Express Hungary Kft. as an accountant for different territories (posting of
creditors, bank statements and taxes). Following her DHL tenure from 2005 to
2006 Ms. Toth worked at TMF Hungary Kft., an international accounting firm. From
2006 to 2007 Ms. Toth worked at BDO Forte AccRoll Kft., where her
responsibilities included full scale bookkeeping including preparing of
financial statements, reports, tax-returns, etc. of Hungarian and foreign
companies.




Eugene L. Guhnehas served as
a member of the Board of Directors of the Company since March 4,
2008.  Mr. Guhne joined the Company on April 26, 2007 when he was
appointed to serve as a member of our Advisory Board. Mr. Guhne has served as a
Vice President, Sales of Ultimate Software, Inc. (NASDAQ:ULTI) since November
1999. From February 1998 to November 1999, Mr. Guhne served as Director of
Sales, Mid-Atlantic Division of Ultimate Software, Inc. Prior to joining
Ultimate Software, Inc., from 1992 to 1998, Mr. Guhne was the President of The
Ultimate Software Group of the Carolinas, Inc. and the Vice President of The
Ultimate Group of Virginia, Inc., a reseller of Ultimate Software which was
acquired by it in March 1998. From 1987 to 1992, Mr. Guhne served in various
positions at ADP, where his most recent position was Director of Sales. Mr.
Guhne is a shareholder and Director of the Company.




Family
Relationships




There are
no family relationships between any of directors or executive
officers.




Audit
Committee




Currently,
our entire board of directors serves as our audit committee. Because of the
small size of the Company and the risk attendant to a small public company, we
are currently unable to attract an audit committee financial expert to our Board
of Directors.





Code
of Ethics





We
currently do not have a Code of Ethics that applies to all of our officers,
directors and employees, including our principal executive officer, principal
financial officer, principal accounting officer and controller, and others
performing similar functions. Company management believes that current
resources, both monetary and time wise, are better allocated for developing our
business. We also believe that our current management is capable of self
judgment and the exercise of ‘common sense code of conduct’. However, in the
near future, as our work load permits, we will develop and post on our website
an appropriate Code of conduct document as required by public company
ethics.




Changes
in Director Nomination Process for Stockholders




None.


33
 Index




Compliance
With Section 16 (A) of the Exchange Act




Based
solely upon a review of Forms 3 and 4 and amendments thereto furnished to us
pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934 during our
most recent fiscal year and Forms 5 and amendments thereto furnished to us with
respect to our most recent fiscal year, certain officers, directors and owners
of 10% or more of our outstanding shares have not filed Forms 3, 4 and 5
required by Section 16(a) of the Securities Exchange Act of 1934, as
amended.




ITEM11.
            EXECUTIVE
      COMPENSATION





The
following summary compensation tables set forth information concerning the
annual and long-term compensation for services in all capacities for the years
ended December 31, 2008, of those persons who were, at December 31, 2008, Power
of the Dream Ventures’ chief executive officer, chief financial officer, and
other executive officers whose 2008 compensation exceeded
$50,000.





SUMMARY
      COMPENSATION TABLE*Name
      and principal position
                                                                  Year
                                                                  
                                                                  Salary
      ($)
                                                                  
                                                                  Bonus
      ($)
                                                                  
                                                                  Stock
      Awards ($)
                                                                  
                                                                  Option
      Awards ($)
                                                                  Non-Equity
      Incentive Plan Compensation ($)
                                                                  Nonqualified
      Deferred Compensation Earnings ($)
                                                                  
                                                                  All
      Other Compensation ($)
                                                                  
                                                                  
                                                                  Total
      ($)Viktor
      RozsnyayPresident
      & CEO
                                                                  2008
                                                                  
                                                                  
                                                                  13,006
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  500,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  513,006Daniel
      KunVice
      President
                                                                  2008
                                                                  
                                                                  
                                                                  21,850
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  500,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  521,850Ildiko
      RozsaChief
      Financial Officer
                                                                  2008
                                                                  
                                                                  
                                                                  25,148
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  300,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  325,148Mihaly
      ZalaChief
      Technology Officer
                                                                  2008
                                                                  
                                                                  
                                                                  38,839
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  300,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  17,000
                                                                  
                                                                  
                                                                  
                                                                  355,839Szilvia
      TothChief
      Accounting Officer
                                                                  2008
                                                                  
                                                                  
                                                                  41,158
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  100,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  141,158Total
                                                                  
                                                                  
                                                                  
                                                                  140,001
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  1,700,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  17,000
                                                                  
                                                                  
                                                                  
                                                                  1,857,001




The
following summary compensation tables set forth information concerning the
annual and long-term compensation for services in all capacities for the years
ended December 31, 2007, of those persons who were, at December 31, 2007, Power
of the Dream Ventures’ chief executive officer, chief financial officer, and
other executive officers whose 2007 compensation exceeded
$50,000.




*The
amounts in the “stock awards column” represent the amount expensed in 2008 under
FAS 123(R).  The grant date fair value of the awards was based on the
market price of the stock at the commitment date of the agreements. See also
Note 10 of the financial statements for additional information on these
awards.


34
 Index




SUMMARY
      COMPENSATION TABLE*Name
      and principal position
                                                                    Year
                                                                    
                                                                    Salary
      ($)
                                                                    
                                                                    Bonus
      ($)
                                                                    
                                                                    Stock
      Awards ($)
                                                                    
                                                                    Option
      Awards ($)
                                                                    Non-Equity
      Incentive Plan Compensation ($)
                                                                    Nonqualified
      Deferred Compensation Earnings ($)
                                                                    
                                                                    All
      Other Compensation ($)
                                                                    
                                                                    
                                                                    Total
      ($)Viktor
      RozsnyayPresident
      & CEO
                                                                    2007
                                                                    
                                                                    
                                                                    3.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    125.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    128.000Daniel
      KunVice
      President
                                                                    2007
                                                                    
                                                                    
                                                                    3.250
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    125.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    128.250Ildiko
      RozsaChief
      Financial Officer
                                                                    2007
                                                                    
                                                                    
                                                                    5.750
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    325.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    330.750Mihaly
      ZalaChief
      Technology Officer
                                                                    2007
                                                                    
                                                                    
                                                                    9.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    75.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    9.900
                                                                    
                                                                    
                                                                    
                                                                    93.900Szilvia
      TothChief
      Accounting Officer
                                                                    2007
                                                                    
                                                                    
                                                                    9.500
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    150.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    159.500Total
                                                                    
                                                                    
                                                                    
                                                                    30.500
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    800.000
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    
                                                                    9.900
                                                                    
                                                                    
                                                                    
                                                                    840.400




*The
amounts in the “stock awards column” represent the amount expensed in 2008 under
FAS 123(R).  The grant date fair value of the awards was based on the
market price of the stock at the commitment date of the agreements. See also
Note 10 of the financial statements for additional information on these
awards.




The
directors are not compensated for their directorship.




ITEM12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATE
      STOCKHOLDER MATTERS




The
following table sets forth certain information regarding beneficial ownership of
Common Stock as of December 31, 2008 by each person known to us to own
beneficially more than 5% of our Common Stock, each of our directors, each of
our named executive officers, and all executive officers and directors as a
group. Under the SEC rules, beneficial ownership includes any shares as to which
the individual has the sole or shared voting power or investment power. In
addition, beneficial ownership includes any shares that the individual has the
right to acquire within 60 days. Unless otherwise indicated, the Company
believes that all persons named in the table below have sole voting and
investment power with respect to all shares of common stock beneficially owned
by them.





Common
      StockNumber
      of shares
                        
                        
                        Percent
      of ClassIldiko Rozsa
      (1)
                        
                        
                        250
      000
                        
                        
                        
                        *Szilvia Toth
      (2)
                        
                        
                        100
      000
                        
                        
                        
                        *Mihaly Zala
      (3)
                        
                        
                        250
      000
                        
                        
                        
                        *Gene Guhne
      (4)
                        
                        
                        1,000,000
                        
                        
                        
                        2.1
                        %Mary Passalaqua
      (5)
                        
                        
                        2,500,000
                        
                        
                        
                        5.25
                        %Daniel Kun,
      Jr. (6)
                        
                        
                        14,030,000
                        
                        
                        
                        29.47
                        %Viktor Rozsnyay
      (7)
                        
                        
                        12,150,000
                        
                        
                        
                        25.52
                        %Daniel Kun,
      Sr. (8)
                        
                        
                        2,550,000
                        
                        
                        
                        5.36
                        %Total
                        
                        
                        32,830,000
                        
                        
                        
                        68.95
                        %







·
            Less
      than 1%


(1)
Address is 1066 Budapest, Terez Krt. 22, Hungary


(2)
Address is 1095Budapest, Kalman Imre u. 22 II/6, Hungary


(3)
Address is 1163 Budapest, Kerepesi u. 190, Hungary


(4)
Address is 585 Cross Creek Tr. Gibsonville, NC 27249


(5)
Address is 7325 Oswego Road, Suite D, Liverpool, New York, 13090


(6)
Address is 1037 Budapest, Perenyi u 16/B, Hungary


(7)
Address is 2049 Diosd, Ligetszepe ut 54, Hungary


(8)
Address is 1037 Budapest, Perenyi u 16/B, Hungary


35
 Index




ITEM13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE




There has
not been since January 1, 2008 nor is there currently pending any transaction or
series of similar transactions to which we were or are to be a party in which
the amount involved exceeded $120,000 and in which any director, executive
officer, holder of more than 5% of our common stock or any member of the
immediate family of any of these persons had or will have a direct or indirect
material interest.


Director
Independence




Each of
the directors qualify as “independent” under the NASDAQ rules. The NASDAQ
independence definition includes objective measures that disqualify a director
from being independent, including whether the director is an employee of the
company or has engaged in various types of business dealings with the company.
These objective measures assist our board of directors in making determinations
of director independence under the NASDAQ rules. Our board of directors makes a
determination regarding the independence of each director annually based on all
relevant facts and circumstances.




ITEM14.
            PRINCIPAL
      ACCOUNTING FEES AND SERVICES




The
following is a summary of the fees billed to the Company by M&K and BDO
Forte Audit Kft. for professional services rendered for the fiscal years ended
December 31, 2008 and 2007, respectively:





Fee
      Category
              
              Fiscal
      2008
                Fees
              
              
              Fiscal
      2007
                FeesM&K
      audit fees
              
              $
              11,352
              
              
              $
              93,816BDO
      Forte Audit Kft. audit Fees
              
              $
              25,971
              
              
              $
              16,000Total
      Fees
              
              $
              37,323
              
              
              $
              109,816




The audit
fees consists of fees billed for professional services rendered for the audit of
the Company’s consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided in connection with statutory and regulatory filings
or engagements.


36
 Index




PART
IV




ITEM15.
            EXHIBITS








Exhibit No.
                        Description of Exhibit.3.1
                        Original
      Certificate of Incorporation of the Registrant, as filed with the Delaware
      Secretary of State on August 17, 2006*3.2
                        Certificate
      of Amendment to Certificate of Incorporation of the Registrant as filed on
      April 12, 2007**3.3
                        Bylaws
      of the Registrant*3.4
                        Form
      of Subscription Agreement of the Registrant10.1
                        Standby
      Equity Distribution Agreement dated October 8, 2008 between YA Global
      Investments, L.P. and Power of the Dream Ventures, Inc.
  **10.2
                        Warrant
      to Purchase Common Stock dated October 8, 2008 between YA Global
      Investments, L.P. and Power of the Dream Ventures,
  Inc.**10.3
                        RiverPower
      technology research and development agreement dated November 20, 2008
      between Vidatech, Ltd. and Gyorgy Szepessy10.4
                        FireSAFE
      license and technology utilization agreement dated August 5, 2008 between
      Vidatech Ltd and Attila Klausz.10.5
                        Business
      development agreement dated February 23, 2009 between Power of the Dream
      Ventures, Inc. and Genetic Immunity.21.1
                        Subsidiaries
      of the Registrant†23.2
                        Consent
      of BDO Kontroll Ltd.31.1
                        Certification
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
                        Certification
      of the Chief Financial Officer and Chief Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1
                        Certification
      of the Chief Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
                        Certification
      of the Chief Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002.




* Filed
as an exhibit to Form 8-K Current Report, as filed with the U.S. Securities
& Exchange Commission on October 14, 2008, and incorporated herein by
reference.




** Filed
as an exhibit to Form 8-K Current Report, as filed with the U.S. Securities
& Exchange Commission on October 14, 2008, and incorporated herein by
reference.




† Filed
as an exhibit to the Registrant’s Registration Statement on Form SB-2/A, as
filed with the U.S. Securities & Exchange Commission on November 14, 2007,
and incorporated herein by reference.


37
 Index




SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.






Power
      of the Dream Ventures, Inc.
                                (formerly
      known as “Tia V, Inc.”)Dated:
      March 18, 2009
                              By:
                              /s/ 
      Viktor RozsnyayViktor
      RozsnyayPrincipal
      Executive Officer/s/
      Ildiko RozsaPrincipal
      Financial
Officer


38
 Index




Index
to Financial Statements








Page No.Report
      of Independent Registered Public Accounting Firm
                  F-1Consolidated
      Balance Sheet at December 31, 2008
                  F-2Consolidated Statements of Operations
      and Comprehensive Income for the years ended December 31, 2008 and
      2007
                  F-3Consolidated Statements
      of Deficiency in Stockholders’ Equity for the two years
      ended December 31, 2008
                  F-4
      to F-5Consolidated Statements
      of Cash Flows for the years ended December 31, 2008 and
      2007
                  F-6Notes
      to Consolidated Financial Statements
                  F-7
      to F-21


39
 Index




Report of
Independent Public Accounting Firm







Board of
Directors and Stockholders




Power of
the Dream Ventures, Inc. (formerly Tia V)




(a
development stage company)




Budapest,
Hungary




We have
audited the accompanying balance sheets of Power of the Dream Ventures, Inc.
(formerly Tia V), a development stage company, as of December 31, 2008 and 2007
and the related statements of operations, stockholders’ equity, and cash flows
for each of the two years in the period then ended and the period from inception
(April 26, 2006) to December 31, 2008.  These financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these financial statements based on our
audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Power of the Dream Ventures, Inc.
(formerly Tia V) at December 31, 2008 and 2007, and the results of its
operations and its cash flows for each of the two years in the period then ended
and the period from inception (April 26, 2006) through December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.






March 18,
2009






BDO Forte
Audit Ltd.


MKVK
number: 002387





Ferenc Baumgartner
              András NagyGeneral
      Manager
              Registered
      Auditor




MKVK
number: 005718







The
accompanying notes are an integral part of


these
consolidated financial statements


40
 Index


POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
BALANCE SHEET


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007





Amounts
in USD





December 31,
      2008
                
                
                December 31,
      2007ASSETSCurrent
      AssetsCash
                
                
                
                
                $
                650,945
                
                
                $
                182,780Other
      receivables
                
                3
                
                
                
                25,131
                
                
                
                78,806Receivables
      from related parties
                
                4
                
                
                
                -
                
                
                
                100,000Inventories
                
                6
                
                
                
                -
                
                
                
                4,466Total
      Current Assets
                
                
                
                
                
                676,076
                
                
                
                366,052Fixed
      assets, net
                
                7
                
                
                
                614,723
                
                
                
                623,803Total
      Assets
                
                
                
                
                
                1,290,799
                
                
                $
                989,855LIABILITIESCurrent
      LiabilitiesAccounts
      payable and accrued and other liabilities
                
                
                
                
                $
                236,821
                
                
                $
                117,960Capital
      leases payable, current portion
                
                9
                
                
                
                63,399
                
                
                
                61,860Note
      payable
                
                8
                
                
                
                215,000
                
                
                
                250,000Total
      Current Liabilities
                
                
                
                
                
                515,220
                
                
                
                429,820Long
      term liabilitiesCapital
      leases payable, less current portion
                
                9
                
                
                
                343,159
                
                
                
                330,203Total
      Long Term Liabilities
                
                
                
                
                
                343,159
                
                
                
                330,203Stockholders’
      EquityPreferred
      stock, $0.0001 par value, 10,000,000 shares authorized,  -0-
      issuedCommon
      stock, $.0001 par value; 250,000,000 shares authorized, 47,615,181 and
      41,165,000 shares issued and outstanding
                
                10
                
                
                
                4,762
                
                
                
                4,117Additional
      Paid-In Capital
                
                
                
                
                
                7,041,048
                
                
                
                4,446,469Deficit
      accumulated during development stage
                
                
                
                
                
                (6,236,547
                )
                
                
                (2,278,335
                )Other
      Comprehensive Income
                
                
                
                
                
                26,615
                
                
                
                (9,850
                )Unearned
      Compensation
                
                
                
                
                
                (403,458
                )
                
                
                (1,932,569
                )Total
      Stockholders’ Equity
                
                
                
                
                
                432,420
                
                
                
                229,832Total
      liabilities and stockholders’ equity
                
                
                
                
                
                1,290,799
                
                
                $
                989,855






The
accompanying notes are an integral part of


these
consolidated financial statements


41
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENT OF OPERATIONS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007





Amounts
in USD





Notes
                        
                        
                        For
      the year ended December 31, 2008
                        
                        
                        For
      the year ended December 31, 2007
                        
                        
                        For
      the Period from April 26, 2006 (date of inception) to
      December 31, 2008Net
      Sales
                        
                        
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        5,833Cost
      of Sales
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (3,711
                        )Gross
      margin
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        2,122Material
      expenses
                        
                        
                        
                        
                        
                        21,144
                        
                        
                        
                        22,335
                        
                        
                        
                        46,168General
      administration
                        
                        11
                        
                        
                        
                        3,249,997
                        
                        
                        
                        1,805,366
                        
                        
                        
                        5,086,430Research
      and development
                        
                        5
                        
                        
                        
                        425,974
                        
                        
                        
                        101,383
                        
                        
                        
                        527,357Personnel
      expenses
                        
                        
                        
                        
                        
                        158,038
                        
                        
                        
                        37,702
                        
                        
                        
                        195,740Depreciation
      and amortization
                        
                        7
                        
                        
                        
                        102,471
                        
                        
                        
                        39,565
                        
                        
                        
                        145,093Other
      expenses, net
                        
                        
                        
                        
                        
                        (10,082
                        )
                        
                        
                        -
                        
                        
                        
                        (3,455
                        )Operating
      expenses
                        
                        
                        
                        
                        
                        3,947,542
                        
                        
                        
                        2,006,351
                        
                        
                        
                        5,997,333Loss
      from operations
                        
                        
                        
                        
                        
                        (3,947,542
                        )
                        
                        
                        (2,006,351
                        )
                        
                        
                        (5,995,211
                        )Interest
      income and exchange gains
                        
                        
                        
                        
                        
                        (10,670
                        )
                        
                        
                        19,318
                        
                        
                        
                        9,426Loss
      before provision (benefit) for income taxes
                        
                        
                        
                        
                        
                        (3,958,212
                        )
                        
                        $
                        (1,987,033
                        )
                        
                        
                        (5,985,785
                        )Provision
      (benefit) for income taxes
                        
                        
                        
                        
                        
                        -
                        
                        
                        
                        (5,439
                        )
                        
                        
                        -Net
      loss
                        
                        
                        
                        
                        
                        (3,958,212
                        )
                        
                        $
                        (1,992,472
                        )
                        
                        $
                        (5,985,785
                        )Basic
      loss per share
                        
                        
                        
                        
                        $
                        (0.09
                        )
                        
                        $
                        (0.02
                        )Diluted
      loss per share
                        
                        
                        
                        
                        $
                        (0.09
                        )
                        
                        $
                        (0.02
                        )Weighted
      average number of shares outstanding – Basic
                        
                        
                        
                        
                        
                        42,724,459
                        
                        
                        
                        38,482,145Weighted
      average number of shares outstanding – Diluted
                        
                        
                        
                        
                        
                        42,724,459
                        
                        
                        
                        38,482,145






The
accompanying notes are an integral part of


these
consolidated financial statements


42
 Index


POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS




Amounts
in USD




Common
                      Shares
                    
                    
                    Stocks
                      Amount
                    
                    
                    Accumulated
      Deficit During Developmental Stage
                    
                    
                    Additional
                      Paid
      In
                      Capital
                    
                    
                    Other
      Comprehensive Income
                    
                    
                    Unearned
      Compensation
                    
                    
                    Total
                    
                    
                    Comprehensive
      Income/ (Loss)Issuance
      of common stock
                    
                    
                    33,300,000
                    
                    
                    $
                    3,330
                    
                    
                    
                    
                    
                    $
                    10,670
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    14,000Contributed
      Capital
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    96,100
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    96,100Currency
      Translation Adjustment
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    4,151
                    
                    
                    
                    
                    
                    
                    4,151
                    
                    
                    
                    4,151Net
      loss for the period
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    (35,100
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (35,100
                    )
                    
                    
                    (35,100
                    )Balance
      at December 31, 2006
                    
                    
                    33,300,000
                    
                    
                    
                    3,330
                    
                    
                    
                    (35,100
                    )
                    
                    
                    106,770
                    
                    
                    
                    4,151
                    
                    
                    
                    -
                    
                    
                    
                    79,151
                    
                    
                    
                    (30,949
                    )Contributed
      Capital
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    53,735
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    53,735Recapitalization
      upon Reverse Mergeron
      April 10, 2007 (See Note 1)
                    
                    
                    2,500,000
                    
                    
                    
                    250
                    
                    
                    
                    (250,763
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (250,513
                    )Private
      placement of shares at $0.34 per share(See
      Note 10)
                    
                    
                    2,250,000
                    
                    
                    
                    225
                    
                    
                    
                    
                    
                    
                    
                    764,775
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    765,000Shares
      issued for services at $0.34 pershare
      (See Note 10)
                    
                    
                    1,875,000
                    
                    
                    
                    188
                    
                    
                    
                    
                    
                    
                    
                    637,313
                    
                    
                    
                    
                    
                    
                    $
                    (467,501
                    )
                    
                    
                    170,000Shares
      issued for research and development at $0.34 per share (See Note
      10)
                    
                    
                    100,000
                    
                    
                    
                    10
                    
                    
                    
                    
                    
                    
                    
                    33,990
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    34,000Private
      placement at $2.5 per share (See Note 10)
                    
                    
                    104,000
                    
                    
                    
                    10
                    
                    
                    
                    
                    
                    
                    
                    259,990
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    260,000Shares
      issued for stock based compensation at $2.5 per share (See Note
      10)
                    
                    
                    1,036,000
                    
                    
                    
                    104
                    
                    
                    
                    
                    
                    
                    
                    2,589,896
                    
                    
                    
                    
                    
                    
                    
                    (2,590,000
                    )
                    
                    
                    -Amortization
      of Unearned Compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,124,932
                    
                    
                    
                    1,124,932Currency
      Translation Adjustment
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (14,001
                    )
                    
                    
                    
                    
                    
                    
                    (14,001
                    )
                    
                    
                    (14,001
                    )Net
      loss for the period
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,992,472
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,992,472
                    )
                    
                    
                    (1,992,472
                    )Balance
      at December 31, 2007
                    
                    
                    41,165,000
                    
                    
                    $
                    4,117
                    
                    
                    $
                    (2,278,335
                    )
                    
                    $
                    4,446,469
                    
                    
                    $
                    (9,850
                    )
                    
                    $
                    (1,932,569
                    )
                    
                    $
                    229,832
                    
                    
                    $
                    (2,037,422
                    )








The
accompanying notes are an integral part of


these
consolidated financial statements


43
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS




Amounts
in USD




Common
                      Shares
                    
                    
                    Stocks
                      Amount
                    
                    
                    Accumulated
      Deficit During Developmental Stage
                    
                    
                    Additional
                      Paid
      In
                      Capital
                    
                    
                    Other
      Comprehensive Income
                    
                    
                    Unearned
      Compensation
                    
                    
                    Total
                    
                    
                    Comprehensive
      Income/ (Loss)Balance
      at December 31, 2007
                    
                    
                    41,165,000
                    
                    
                    $
                    4,117
                    
                    
                    $
                    (2,278,335
                    )
                    
                    $
                    4,446,469
                    
                    
                    $
                    (9,850
                    )
                    
                    $
                    (1,932,569
                    )
                    
                    $
                    229,832
                    
                    
                    $
                    (2,037,422
                    )Private
      placement of shares at $3.25 per share (See Note 10)
                    
                    
                    32,500
                    
                    
                    
                    3
                    
                    
                    
                    
                    
                    
                    
                    105,622
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    105,625Shares
      issued for services at $0.7 per share (See Note 10)
                    
                    
                    306,570
                    
                    
                    
                    31
                    
                    
                    
                    
                    
                    
                    
                    214,568
                    
                    
                    
                    
                    
                    
                    
                    (214,599
                    )
                    
                    
                    -Shares
      issued for services at $0.75 per share (See Note 10)
                    
                    
                    1,500,000
                    
                    
                    
                    150
                    
                    
                    
                    
                    
                    
                    
                    1,124,850
                    
                    
                    
                    
                    
                    
                    
                    (1,125,000
                    )
                    
                    
                    -Shares
      issued for services at $1.35 per share (See Note 10)
                    
                    
                    111,111
                    
                    
                    
                    11
                    
                    
                    
                    
                    
                    
                    
                    149,989
                    
                    
                    
                    
                    
                    
                    
                    (150,000
                    )
                    
                    
                    -Private
      placement of shares at $0.4 per share (See Note 10)
                    
                    
                    2,500,000
                    
                    
                    
                    250
                    
                    
                    
                    
                    
                    
                    
                    999,750
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,000,000Shares
      issued for Standby Equity Distribution Agreement at $0.4 per
      share
                    
                    
                    2,000,000
                    
                    
                    
                    200
                    
                    
                    
                    
                    
                    
                    
                    (200
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Amortization
      of Unearned Compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    3,018,710
                    
                    
                    
                    3,018,710Currency
      Translation Adjustment
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    36,465
                    
                    
                    
                    
                    
                    
                    
                    36,465
                    
                    
                    
                    36,465Net
      loss for the period
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (3,958,212
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (3,958,212
                    )
                    
                    
                    (3,958,212
                    )Balance
      at December 31, 2008
                    
                    
                    47,615,181
                    
                    
                    $
                    4,762
                    
                    
                    $
                    (6,236,547
                    )
                    
                    $
                    7,041,048
                    
                    
                    $
                    26,615
                    
                    
                    $
                    (403,458
                    )
                    
                    $
                    432,420
                    
                    
                    $
                    (5,959,169
                    )








The
accompanying notes are an integral part of


these
consolidated financial statements


44
 Index







POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
STATEMENT OF CASH FLOWS


Amounts
in USD


For
      the year ended
                                                          December 31,
      2008
                                                        
                                                        
                                                        For
      the year ended
                                                          December 31,
      2007
                                                        
                                                        
                                                        Cumulative
      from April 26, 2006 (date of inception) to December 31,
      2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                                        
                                                        $
                                                        (3,958,212
                                                        )
                                                        
                                                        $
                                                        (1,992,472
                                                        )
                                                        
                                                        $
                                                        (5,985,785
                                                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Amortization
      of stock-based compensation
                                                        
                                                        
                                                        3,018,710
                                                        
                                                        
                                                        
                                                        1,124,932
                                                        
                                                        
                                                        
                                                        4,143,642Recapitalization
      under reverse merger
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (250,763
                                                        )Issue
      of shares for services
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        170,000
                                                        
                                                        
                                                        
                                                        170,000Issue
      of shares for research and development
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        34,000
                                                        
                                                        
                                                        
                                                        34,000Depreciation
      and amortization
                                                        
                                                        
                                                        102,471
                                                        
                                                        
                                                        
                                                        39,565
                                                        
                                                        
                                                        
                                                        142,036(837,031
                                                        )
                                                        
                                                        
                                                        (623,975
                                                        )
                                                        
                                                        
                                                        (1,746,870
                                                        )Changes
      in operating assets and liabilities:Increase
      in inventories
                                                        
                                                        
                                                        4,028
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -(Increase)
      Decrease in other current assets
                                                        
                                                        
                                                        53,675
                                                        
                                                        
                                                        
                                                        (72,483
                                                        )
                                                        
                                                        
                                                        (25,131
                                                        )(Increase)
      Decrease in related party receivables
                                                        
                                                        
                                                        100,000
                                                        
                                                        
                                                        
                                                        (66,000
                                                        )
                                                        
                                                        
                                                        -Decrease
      in deferred tax assets
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        5,439
                                                        
                                                        
                                                        
                                                        -Increase
      in accounts payable and accrued liabilities
                                                        
                                                        
                                                        83,861
                                                        
                                                        
                                                        
                                                        105,719
                                                        
                                                        
                                                        
                                                        451,821Net
      cash used in operating activities
                                                        
                                                        
                                                        (595,467
                                                        )
                                                        
                                                        
                                                        (651,300
                                                        )
                                                        
                                                        
                                                        (1,320,180
                                                        )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of fixed assets
                                                        
                                                        
                                                        (78,896
                                                        )
                                                        
                                                        
                                                        (261,494
                                                        )
                                                        
                                                        
                                                        (350,201
                                                        )Net
      cash used in investing activities
                                                        
                                                        
                                                        (78,896
                                                        )
                                                        
                                                        
                                                        (261,494
                                                        )
                                                        
                                                        
                                                        (350,201
                                                        )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from stockholders
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        53,735
                                                        
                                                        
                                                        
                                                        149,835Proceeds
      from sale of common stock
                                                        
                                                        
                                                        1,105,625
                                                        
                                                        
                                                        
                                                        1,025,000
                                                        
                                                        
                                                        
                                                        2,155,295Net
      cash from financing activities
                                                        
                                                        
                                                        1,105,625
                                                        
                                                        
                                                        
                                                        1,078,735
                                                        
                                                        
                                                        
                                                        2,305,130Effect
      of exchange rate changes on cash
                                                        
                                                        
                                                        36,903
                                                        
                                                        
                                                        
                                                        (11,896
                                                        )
                                                        
                                                        
                                                        16,196Net
      increase in cash
                                                        
                                                        
                                                        468,165
                                                        
                                                        
                                                        
                                                        154,045
                                                        
                                                        
                                                        
                                                        650,945Cash
      at beginning of period
                                                        
                                                        
                                                        182,780
                                                        
                                                        
                                                        
                                                        28,735
                                                        
                                                        
                                                        
                                                        -Cash
      at end of period
                                                        
                                                        $
                                                        650,945
                                                        
                                                        
                                                        $
                                                        182,780
                                                        
                                                        
                                                        $
                                                        650,945Supplemental disclosure of cash flow
      information:Non-cash
      investing and financing transactionsIssuance
      of shares for services
                                                        
                                                        $
                                                        2,289,599
                                                        
                                                        
                                                        $
                                                        671,501
                                                        
                                                        
                                                        $
                                                        2,961,100Issuance
      of shares for liabilities assumed under reverse merger
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        $
                                                        250,513
                                                        
                                                        
                                                        $
                                                        250,513Issuance
      of stock based compensation shares
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        $
                                                        2,590,000
                                                        
                                                        
                                                        $
                                                        2,590,000Purchase
      of fixed assets through the assumption of capital lease
      obligations
                                                        
                                                        
                                                        406,558
                                                        
                                                        
                                                        $
                                                        392,063
                                                        
                                                        
                                                        $
                                                        406,558Cash
      paid for:Interest
                                                        
                                                        
                                                        10,670
                                                        
                                                        
                                                        
                                                        5,749
                                                        
                                                        
                                                        
                                                        10,025Taxes
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -








The
accompanying notes are an integral part of


these
consolidated financial statements


45
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007





NOTE
      1 -
            GENERAL
      INFORMATION




Power of
the Dream Ventures, Inc., f/k/a “Tia V, Inc.” (“PDV” or the “Company”) was
incorporated in Delaware on August 17, 2006, with the objective to acquire, or
merge with, an operating business.




Reverse
merger




PDV
entered into and consummated a Securities Exchange Agreement (“Exchange
Agreement”) on April 10, 2007. Under the terms of the Exchange Agreement, PDV
acquired all the outstanding equity interests of Vidatech, Kft. (also known as
Vidatech Technological Research and Development LLC) a limited liability company
formed under the laws of the Republic of Hungary, (“Vidatech”) in exchange for
33,300,000 shares of PDV’s common stock, and Vidatech thereby became a
wholly-owned Hungarian subsidiary of PDV. PDV is governed by the law of the
State of Delaware, and its wholly-owned subsidiary, Vidatech, is governed by the
law of the Republic of Hungary. PDV and Vidatech are herein collectively
referred to as the “Company.”




Following
the acquisition the former stockholders of Vidatech owned a majority of the
issued and outstanding common stock of PDV and the management of Vidatech
controlled the Board of Directors of PDV and its wholly-owned Hungarian
subsidiary Vidatech. Therefore the acquisition has been accounted for as a
reverse merger (the “Reverse Merger”) with Vidatech as the accounting acquirer
of PDV. The accompanying consolidated financial statements of the Company
reflect the historical results of Vidatech, and the consolidated results of
operations of PDV subsequent to the acquisition date. In connection with the
Exchange Agreement, PDV adopted the fiscal year end of Vidatech as December
31.




All
reference to shares and per share amounts in the accompanying consolidated
financial statements have been restated to reflect the aforementioned shares
exchange.




Business




The
Company is engaged in the acquisition, development, licensing and
commercialization of and the investment in, directly or through business
acquisitions, technologies developed in Hungary. In furtherance of its business,
the Company provides research and development services to the companies,
inventors from whom it acquires technologies or participation interests in
technologies. A goal of the Company is to support research and development
activities and to sell the products of inventions to the technological
market.




From
inception through December 31, 2008, the Company primarily focused on the
raising of capital. As of December 31, 2008, the Company acquired eleven
technologies, TothTelescope, RiverPower, the Kalmar inventions (FireSAFE
fire-proofing liquid; technology for utilizing communal waste as a concrete
additive;  technology for repairing potholes with the use of recycled
plastics; technology for neutralizing red mud; biodegreadable deiing solution
and PVC shielded electric cable recycling technology), Desalination technology,
water and gasoline mixing technology for use in internal combustion engines and
an equity interest in ‘in4 Kft’, a company formed to develop next generation
semantic internet based search engine and content organizer applications. All of
these technologies are still in the development stage (see Note 5). As of
December 31, 2008, the Company has only realized limited revenues from the
TothTelescope project and has not realized any revenues from the other
inventions. As a result, the accompanying consolidated financial statements have
been presented on a development stage basis.







The
accompanying notes are an integral part of


these
consolidated financial statements


46
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






FireSAFE





On August
20, 2008 the Company licensed its FireSAFE technology to a group of Hungarian
investors for a license acquisition fee of HUF 20,000,000 (approximately
$120,000), where half of the license fee was received by the Company in August
of 2008, and the other half due once independent testing and verification of the
technology completed, but no later than June 31, 2009. The received amount was
recorded as a liability in accordance with Staff Accounting Bulletin No. 104,
“Revenue Recognition” (“SAB 104"), which superseded Staff Accounting Bulletin
No. 101, “Revenue Recognition in Financial Statements” (“SAB 101"). A new
company called FireLESS Ltd. was established and given commercialization
license. The Company received 30% equity in FireLESS Ltd in addition to the one
time license acquisition fee which was recorded as research and development
expense in accordance with with Statement of Financial Accounting Standards
(“SFAS”) No. 2 “Accounting for Research and Development Costs (See also Note
5).





The new
company will focus on acquiring the appropriate licenses and certificates to
internationally market FireSAFE and will work with local and international fire
agencies to test and establish usability baselines for FireSAFE. It is
anticipated that FireLESS Ltd. will start the international roll-out of FireSAFE
in the first half of 2009, assuming positive outcome to the test currently
underway.





To
further these goals, by protecting the intellectual property FireSAFE
represents, on October 20, 2008 the Company filed a PCT patent application in
addition to the already filed Hungarain application to protect FireSAFE
internationally.





FireSAFE
is an environmentally friendly, biodegradable liquid designed to prevent, and if
necessary extinguish natural fires that are exceedingly hard, or impossible to
contain with water or other fire-fighting solutions. This category includes
forest, bush and other natural fires. FireSAFE reaches the heart of the fire,
coating all surfaces with a crystalline layer that hardens when exposed to heat.
The layer thus formed is capable of withstanding heat as high as 1,100 degrees
centigrade, enough to stop the most fearsome forest fires. Following use
(containment of the fire) the biodegradable active ingredient will decompose in
approximately four months.  FireSAFE can also be used as a preventive
solution, both in the wild and in treating lumber. During fire season those
areas that are the most likely to be burnt can be sprayed with the solution as a
preventive measure. Lumber used in construction can also be treated with
FireSAFE to increase its fire resistance factor. FireSAFE can be manufactured
anywhere on the planet with ease as all its ingredients are widely and cheaply
available.





Yorkville
SEDA





On
October 8, 2008, Power of the Dream Ventures, Inc. (the “Company”) entered into
a Standby Equity Distribution Agreement (the “Standby Equity Distribution
Agreement”) with YA Global Investments, L.P. (the “Investor”). Pursuant to the
terms of the Standby Equity Distribution Agreement, the Company (a) agreed to
issue and sell to the Investor up to $5,000,000 of shares of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”) in tranches of
equity, based upon a specified discount to the market price of the Common Stock,
calculated over the five trading days following notice by the Company of an
election to sell shares; and (b) issued to the Investor a warrant (the
“Warrant”) to purchase 4,027,386 shares of Common Stock at the exercise price
per share of $0.29. The Warrant is not part of the commitment shares issued by
the company to the investor. The investor must purchase the shares underlaying
the Warrant. The Warrant price was determined based upon the highest Bid price
on the day of the closing of the agreement.





In
connection with the Standby Equity Distribution Agreement, the Company entered
into a Registration Rights Agreement with the Investor (the “Registration Rights
Agreement”) pursuant to which the Company agreed to register for resale the
shares of Common Stock that may be purchased by the Investor pursuant to the
Standby Equity Distribution Agreement, the shares of Common Stock issuable upon
exercise of the Warrant and 2,000,000 shares of Common Stock (the “Commitment
Shares”) issued to the Investor as a commitment fee pursuant to the terms of the
Standby Equity Distribution Agreement. The commitment fee is recorded by
decreasing additional paid in capital.






The
accompanying notes are an integral part of


these
consolidated financial statements


47
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






Financing
from this transaction will be used by the Company for the continued development
of its current technologies, commercialization of same, the acquisition of new
technologies and for general corporate expenses.





The
Company filed the details of this transaction on Form 8-K with the Commission on
October 14, 2008.




Basis
of presentation




The
accompanying consolidated financial statements have been prepared by the Company
pursuant to the rules and regulations of the SEC. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America for financial information have been condensed or omitted pursuant to
such rules and regulations. In the opinion of management, the accompanying
financial statements include all adjustments (consisting of normal recurring
accruals) considered necessary to make the financial statements not misleading
as of and for the period ended December 31, 2008 and for the period from April
26, 2006 (date of inception) to December 31, 2008.




Going
Concern and Management’s Plan




The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America,
which contemplate the continuation of the Company as a going concern and assume
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred losses from operations since inception.
Management anticipates incurring additional losses in 2009. Further, the Company
may incur additional losses thereafter, depending on its ability to generate
revenues from the licensing or sale of its technologies and products, or to
enter into any or a sufficient number of joint ventures. The Company has minimal
revenue to date. There is no assurance that the Company can successfully
commercialize any of its technologies and products and realize any revenues
therefore. The Company’s technologies and products have never been utilized on a
large-scale commercial basis and there is no assurance that any of its
technologies or products will receive market acceptance. There is no assurance
that the Company can continue to identify and acquire new
technologies.




Since
inception through December 31, 2008, the Company had an accumulated deficit of
$6,236,547 and net cash used in operations of $1,320,180. However, management of
the Company believes that the recent funding from the private placement of the
Company’s common shares (See Note 9) will allow them to continue operations and
execute its business plan.




Management
believes the Company has adequate capital to keep the Company functioning
through December 31, 2009. However, the need may arise, in the normal course of
business, to raise additional capital if we want to accelerate development work,
for the acquisition of additional technologies, or to meet unforeseen financial
needs.. No assurance can be given that the Company can obtain additional working
capital, or if obtained, that such funding will not cause substantial dilution
to shareholders of the Company. If the Company is unable to raise additional
funds, if needed, it may be forced to change or delay its contemplated marketing
and business plan. Being a development stage company, the Company is subject to
all the risks inherent in the establishment of a new enterprise and the
marketing and manufacturing of a new product, many of which risks are beyond the
control of the Company. All of the factors discussed above raise substantial
doubt about the Company’s ability to continue as a going concern.




These
consolidated financial statements do not include any adjustments relating to the
recoverability of recorded asset amounts that might be necessary as a result of
the above uncertainty.







The
accompanying notes are an integral part of


these
consolidated financial statements


48
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




The
significant accounting policies adopted in preparation of the consolidated
financial statements are set out below.




Principles of
Consolidation




The
consolidated financial statements include the accounts of PDV and its
wholly-owned Hungarian subsidiary, Vidatech. All significant intercompany
accounts and transactions have been eliminated in consolidation.




Use of
Estimates:




The
preparation of the financial statements in conformity with GAAP requires
management to make estimates, judgments and assumptions that affect amounts
reported herein. Management believes that such estimates, judgments and
assumptions are reasonable and appropriate. However, due to the inherent
uncertainty involved, actual results may differ from those based upon
management’s judgments, estimates and assumptions. Critical accounting policies
requiring the use of estimates are depreciation and amortization and
share-based payments




Revenue
Recognition:




Sales are
recognized when there is evidence of a sales agreement, the delivery of the
goods or services has occurred, the sales price is fixed or determinable and
collectability is reasonably assured, generally upon shipment of product to
customers and transfer of title under standard commercial terms. Sales are
measured based on the net amount billed to a customer. Generally there are no
formal customer acceptance requirements or further
obligations.  Customers do not have a general right of return on
products shipped therefore no provisions are made for return.




Accounts Receivable and
Allowance for Doubtful Accounts:




Accounts
receivable are stated at historical value, which approximates fair value. The
Company does not require collateral for accounts receivable. Accounts receivable
are reduced by an allowance for amounts that may be uncollectible in the future.
This estimated allowance is determined by considering factors such as length of
time accounts are past due, historical experience of write offs, and customers’
financial condition.




Inventories:




Inventories
are stated at the lower of cost, determined based on weighted average cost or
market. Inventories are reduced by an allowance for excess and obsolete
inventories based on management’s review of on-hand inventories compared to
historical and estimated future sales and usage.




Fixed
assets:




Fixed
assets are stated at cost or fair value for impaired assets. Depreciation and
amortization is computed principally by the straight-line method. Asset
amortization charges are recorded for long lived assets. In the related periods,
no asset impairment charges were accounted for.




Depreciation
is recorded commencing the date the assets are placed in service and is
calculated using the straight line basis over their estimated useful
lives.




The
estimated useful lives of the various classes of long-lived assets are
approximately 3-7 years.







The
accompanying notes are an integral part of


these
consolidated financial statements


49
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






Pensions and Other
Post-retirement Employee benefits:




In
Hungary, pensions are guaranteed and paid by the government or by pension funds,
therefore no pensions and other post-retirement employee benefit costs or
liabilities are to be calculated and accounted by the Company.




Product
warranty:




The
Company accrues for warranty obligations for products sold based on management
estimates, with support from sales, quality and legal functions, of the amount
that eventually will be required to settle such obligations. At December 31,
2008, the Company had no warranty obligations in connection with the products
sold.




Advertising
costs:




Advertising
and sales promotion expenses are expensed as incurred.




Research and development and
Investment and Advances to Non-Consolidated Entities:




In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 2
“Accounting for Research and Development Costs,” all research and development
(“R&D”) costs are expensed when they are incurred, unless they are
reimbursed under specific contracts. Assets used in R&D activity, such as
machinery, equipment, facilities and patents that have alternative future use
either in R&D activities or otherwise are capitalized. In connection with
investments and advances  in development-stage technology entities in
which the company owns or controls less than a 50% voting interest, (see Note 5)
where repayment from such entity is based on the results of the research and
development having future economic benefit, the investment and advances are
accounted for as costs incurred by the Company as research and development
in accordance with SFAS No. 68 “Research and Development
Arrangements”.




Income
taxes:




The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes”. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.




Valuation
allowances are provided against deferred tax assets to the extent that it is
more likely than not that the deferred tax assets will not be
realized.




Comprehensive Income
(Loss):




SFAS No.
130, “Accounting for Comprehensive Income,” establishes standards for reporting
and disclosure of comprehensive income and its components (including revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. The items of other comprehensive income that are typically required
to be disclosed are foreign currency items, minimum pension liability
adjustments, and unrealized gains and losses on certain investments in debt and
equity securities. Accumulated other comprehensive income, at December 31, 2008
is $26,615.







The
accompanying notes are an integral part of


these
consolidated financial statements


50
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






Translation of Foreign
Currencies:




The U.S.
dollar is the functional currency for all of the Company’s businesses, except
its operations in Hungary. Foreign currency denominated assets and liabilities
for this unit is translated into U.S. dollars based on exchange rates prevailing
at the end of each period presented, and revenues and expenses are translated at
average exchange rates during the period presented. The effects of foreign
exchange gains and losses arising from these translations of assets and
liabilities are included as a component of equity, under other comprehensive
income.




Loss per
Share:




Under
SFAS No. 128, “Earnings Per Share”, basic loss per common share is computed by
dividing the loss applicable to common stockholders by the weighted average
number of common shares assumed to be outstanding during the period of
computation. Diluted loss per common share is computed using the weighted
average number of common shares and, if dilutive, potential common shares
outstanding during the period. There were no common stock equivalents or
potentially dilutive securities outstanding during the years ended December 31,
2008 and 2007, respectively. Accordingly, the weighted average number of common
shares outstanding for the years ended December 31, 2008 and 2007, respectively,
is the same for purposes of computing both basic and diluted net income per
share for such years.




Business
Segment:




SFAS No.
131, “Disclosures About Segments of an Enterprise and Related Information,”
establishes standards for the way public enterprises report information about
operating segments in annual consolidated financial statements and requires
reporting of selected information about operating segments in interim financial
statements regarding products and services, geographical areas and major
customers. The Company has determined that under SFAS No. 131, there are no
operating segments since substantially all business operations, assets and
liabilities are in Hungarian geographic segment.




Share-Based
Payments:




In
accordance with SFAS No. 123R “Share-Based Payment” all forms of share-based
payment (“SBP”) awards including shares issued under employee stock purchase
plans, stock options, restricted stock and stock appreciation rights result in a
cost that is measured at fair value on the awards’ grant date, based on the
estimated number of awards that are expected to vest. As the Company did not
issue any employee SBP prior to September 30, 2007, there is no
compensation cost recognized in the accompanied consolidated financial
statements.




The
Company accounts for equity instruments issued to non-employees in accordance
with the provisions of Emerging Issues Task Force (EITF) Issue No. 96-18,
“Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services,” which requires
that such equity instruments are recorded at their fair value on the measurement
date. The measurement of stock-based compensation is subject to periodic
adjustment as the underlying equity instrument vests. Non-employee stock-based
compensation charges are amortized over the vesting period or period of
performance of the services.




Recent Accounting
Pronouncements:




In
September 2006, the FASB issued SFAS 157, Fair Value Measurement. The new
standard applies whenever other standards require or permit assets or
liabilities to be measured at fair value. This Statement defines fair value,
establishes a framework for measuring fair value, and expands disclosures about
fair value measurements. This statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007.







The
accompanying notes are an integral part of


these
consolidated financial statements


51
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006






The
adoption of SFAS 157 for financial assets and liabilities did not have a
material impact on its consolidated financial position, results of operation or
cash flows. FSP FAS 157-2 delayed the effective date for non-financial assets
and liabilities to fiscal years beginning after November 15, 2008. Adoption of
SFAS 157 for non-financial assets and liabilities will not have a material
impact on the Company’s consolidated financial position, results of operations
or cash flows.




In
September 2006, the staff of the SEC issued Staff Accounting Bulletin (“SAB”)
No. 108, which provides interpretive guidance on how the effects of the
carryover or reversal of prior year misstatements should be considered in
quantifying a current year misstatement. SAB 108 becomes effective in fiscal
2007. Adoption of SAB 108 did not have a material impact on the Company’s
consolidated financial position, results of operations or cash
flows.




In
February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115”, which permits entities to choose to measure many financial instruments and
certain other items at fair value. The fair value option established by this
Statement permits all entities to choose to measure eligible items at fair value
at specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. Adoption is required for fiscal years beginning
after November 15, 2007. Early adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of SFAS Statement No. 157, Fair Value
Measurements. Adoption of SFAS 159 did not have a material impact on the
Company’s consolidated financial position, results of operations or cash
flows.




In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
141(R)”). SFAS 141(R) replaces SFAS No. 141, “Business Combinations”, but
retains the requirement that the purchase method of accounting for acquisitions
be used for all business combinations. SFAS 141(R) expands on the disclosures
previously required by SFAS 141, better defines the acquirer and the acquisition
date in a business combination, and establishes principles for recognizing and
measuring the assets acquired (including goodwill), the liabilities assumed and
any non-controlling interests in the acquired business. SFAS 141(R) also
requires an acquirer to record an adjustment to income tax expense for changes
in valuation allowances or uncertain tax positions related to acquired
businesses. SFAS 141(R) is effective for all business combinations with an
acquisition date in the first annual period following December 15, 2008; early
adoption is not permitted. We will adopt this statement as of January 1, 2009.
The impact of SFAS 141(R) will have on our consolidated financial statements
will depend on the nature and size of acquisitions we complete after we adopt
SFAS 141(R).




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS
160 requires that non-controlling (or minority) interests in subsidiaries be
reported in the equity section of the company’s balance sheet, rather than in a
mezzanine section of the balance sheet between liabilities and equity. SFAS 160
also changes the manner in which the net income of the subsidiary is reported
and disclosed in the controlling company’s income statement. SFAS 160 also
establishes guidelines for accounting for changes in ownership percentages and
for deconsolidation. SFAS 160 is effective for financial statements for fiscal
years beginning on or after December 15, 2008 and interim periods within those
years. The adoption of SFAS 160 is not expected to have a material impact on our
financial position, results of operations or cash flows.







The
accompanying notes are an integral part of


these
consolidated financial statements


52
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133” (SFAS 161). SFAS
161 requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting. SFAS
161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The adoption of SFAS 161 is not expected to have a material impact on our
financial position, results of operations or cash flows.




In March
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. This statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with US GAAP. This statement is effective 60 days
following the SEC’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles.




In May
2008, the FASB issued FSP Accounting Principles Board ("APB") 14-1 " Accounting
for Convertible Debt Instruments that may be settled in Cash upon Conversion
(Including Partial Cash Settlement) " ("FSP APB 14-1").  FSP
APB 14-1 requires the issuer of certain convertible debt instruments that
may be settled in cash (or other assets) on conversion to separately account for
the liability (debt) and equity (conversion option) components of the instrument
in a manner that reflects the issuer's non-convertible debt borrowing
rate.  FSP APB 14-1 is effective for fiscal years beginning after
December 15, 2008 on a retroactive basis.  The adoption of FSP
APB 14-1 is not expected to have a material impact on our financial
position, results of operations or cash flows.




NOTE
      3 -
            OTHER
      RECEIVABLES





December
      31,
                    2008
                  
                  
                  December
      31,
                    2007VAT
      reclaimable
                  
                  $
                  20,214
                  
                  
                  $
                  74,214Advances
      given
                  
                  
                  668
                  
                  
                  
                  2,219Other
                  
                  
                  4,249
                  
                  
                  
                  2,373Total
                  
                  $
                  25,131
                  
                  
                  $
                  78,806




NOTE
      4 -
            RECEIVABLES
      FROM RELATED PARTIES




During
2007, the Company has provided advances of $100,000 to its management for short
term general administration expenses (travel and representation) which were
offset by expense reports. The amount of advance has been settled during
2008.




During
2006, the Company has provided short term loan to its management for general
administration expenses. The loan did not bear interest obligation. The short
term loan was repaid in January, 2007 to the Company.




NOTE
      5 -
            RESEARCH
      AND DEVELOPMENT (“R&D”)





In
August, 2008, the Company entered into an agreement with a Hungarian individual
to establish FireLESS Kft (FireLESS). FireLESS’s business is focused on
acquiring the appropriate licenses and certificates to internationally market
FireSAFE and will work with local and international fire agencies to test and
establish usability baselines for FireSAFE. The Company is a minority
shareholder in FireLESS with 30% voting rights, which operates under independent
management.






The
accompanying notes are an integral part of


these
consolidated financial statements


53
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      5 -
            RESEARCH
      AND DEVELOPMENT (“R&D”) –
(Continued)





In
August, 2007, the Company entered into an agreement with two Hungarian
individuals to establish In4 Kft (“in4). in4’s business is focused on software
development and information technology purposes. Originally the Company was a
minority shareholder in in4 with 30% voting rights. In4 Ltd. operates under
independent management.





In
August, 2007, the Company also entered into a loan commitment agreement with
in4. According to the agreement the Company has committed a loan of
approximately $271,000 to in4. The loan can be withdrawn by May 31, 2009. In
November of 2008 the Company transferred to in4 the entire loan amount, upon
which the Company elected to covert the loan into an additional 10% equity in
in4. As of January 15, 2009 the Company maintains a minority 40% equity in in4
Ltd.




Since the
repayment of loans, advances and other investment is contingent on the
results of the R&D of iGlue having future economic benefit, management
has expensed the Company's investment in in4 and in FireLESS of
approximately $5,000 and $900, respectively and loan to
in4 of approximately $310,000 as R&D in the accompanying condensed
consolidated statements of operations, in accordance with SFAS No. 68 "Research
and Development Arrangements".




On 16
January, 2008, the Company entered into an Invention Transfer Agreement (“ITA”)
with Otto Buresch, a Hungarian individual (“Inventor”). The purpose of
the agreement is to transfer to the Company the exclusive right of utilizing for
technology capable of mixing water with gasoline, in 40% to 60 %, for use
in internal combustion engines. The purchase price of the invention was HUF
1,750,000 (approximately $10,000) The Company will patent the invention and
will become its owner. Following successful commercialization the inventor is
entitled to receive 40% of net revenue.




NOTE
      6 -
            INVENTORY




At
December 31, 2007, inventories contained semi-finished goods of approximately
$4,000 which were disposed in 2008.




NOTE
      7 -
            FIXED
      ASSETS




Net
property and equipment consisted of the followings at December 31, 2008 and
2007:






December
      31,
                  2008
                
                
                December
      31,
                  2007Machinery
      and equipment
                
                $
                68,026
                
                
                $
                73,834Vehicles
                
                
                582,087
                
                
                
                520,625Office
      equipment
                
                
                46,646
                
                
                
                63,175Software
      and website registration rights
                
                
                22,252
                
                
                
                12,125Total
                
                
                719,011
                
                
                
                669,759Less:
      Accumulated depreciation and amortization
                
                
                (104,288
                )
                
                
                (45,956
                )Net
      property and equipment
                
                
                614,723
                
                
                $
                623,803






The net
book value of fixed assets under capital lease amount to $516,188 and $499,843
at December 31, 2008 and at December 31, 2007, respectively. Depreciation and
amortization expense for the years ended December 31, 2008 and December 31, 2007
was $102,471 and $39,565, respectively and $145,093 for the period from April
26, 2006 (date of inception) to December 31, 2008.







The
accompanying notes are an integral part of


these
consolidated financial statements


54
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      8 -
            NOTE
      PAYABLE




On April
10, 2007, in connection with reverse merger (See Note 1), the Company assumed a
note payable of $250,000 to a former stockholder, Mary Passalaqua originally
with one year maturity at April 5, 2008. The note has been expanded by one year
to April 5, 2009 with the same conditions. As such note payable was issued
immediately prior to the reverse merger, such issuance was recorded as
additional compensation by the Company prior to the reverse merger. Accordingly,
such compensation is reflected in the accompanying consolidated balance sheet as
the accumulated deficit of the Company, and will not be reflected in the
Statement of operations, as such compensation expense was structured as an
expense prior to the recapitalization.




In
November, 2008 the Company settled $35,000 from the outstanding liability. The
note payable bears interest at the prime rate (3.25% at December 31, 2008).
Interest expense in connection with such note amounted to $27,010 and $14,404
for the year ended at December 31, 2008 and at December 31, 2007, respectively,
and was accrued and included in accounts payable and accrued liabilities in the
accompanying consolidated balance sheet.




NOTE
      9 -
            CAPITAL
      LEASES PAYABLE




In
August, 2007, the Company entered into capital lease agreements on 3 vehicles
for management purposes. The maturity of the lease is 60 months and is
denominated in CHF. Installments and interest is due on a monthly
basis.




In
December, 2007, the Company entered into additional capital lease agreements on
2 vehicles for management purposes. The maturity of the lease is 72 months and
is denominated in CHF. Installments and interest is due on a monthly
basis.




In
December 2008, the Company settled the capital lease agreements on 2 vehicles
and replaced them with new agreements for additional 2 vehicles, totaling 5
capital lease agreements at December 31, 2008. The maturity of the new leases
varies from 60 to 72 months and are denominated in EUR and CHF. Installments and
interests are due on a monthly basis.




The
following is a schedule by years of future minimum lease payments under capital
leases together with the present value of the net minimum lease payments as of
December 31, 2008:






For
      the year ending December 31, 2008
                    
                    Amounts2009
                    
                    $
                    99,1372010
                    
                    
                    104,4622011
                    
                    
                    104,4622012
                    
                    
                    99,1182013
                    
                    
                    86,9522014
                    
                    
                    27,099Total
      minimum lease payments
                    
                    
                    521,230Less:
      amounts representing interest
                    
                    
                    114,672Present
      value of net minimum lease payments
                    
                    
                    406,558Less:
      current portion
                    
                    
                    63,399Long
      term liability
                    
                    $
                    343,159







The
accompanying notes are an integral part of


these
consolidated financial statements


55
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      10 -
            STOCKHOLDERS’
      EQUITY





On
October 8, 2008, Power of the Dream Ventures, Inc. (the “Company”) entered into
a Standby Equity Distribution Agreement (the “Standby Equity Distribution
Agreement”) with YA Global Investments, L.P. (the “Investor”). Pursuant to the
terms of the Standby Equity Distribution Agreement, the Company (a) agreed to
issue and sell to the Investor up to $5,000,000 of shares of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”) in tranches of
equity, based upon a 7% discount to the market price of the Common Stock,
calculated over the five trading days following notice by the Company of an
election to sell shares; and (b) issued to the Investor a warrant (the
“Warrant”) to purchase 4,027,386 shares of Common Stock at the exercise price
per share of $0.29. The Warrant is not part of the commitment shares issued by
the company to the investor. The investor must purchase the shares underlaying
the Warrant. The Warrant price was determined based upon the highest Bid price
on the day of the closing of the agreement. The YA Global is required to
exercise the warrant upon notice by PDV of an election to have the warrants
exercised at a fix price of $0.29 per common stock.





In
connection with the Standby Equity Distribution Agreement, the Company entered
into a Registration Rights Agreement with the Investor (the “Registration Rights
Agreement”) pursuant to which the Company agreed to register for resale the
shares of Common Stock that may be purchased by the Investor pursuant to the
Standby Equity Distribution Agreement, the shares of Common Stock issuable upon
exercise of the Warrant and 2,000,000 shares of Common Stock (the “Commitment
Shares”) issued to the Investor as a commitment fee pursuant to the terms of the
Standby Equity Distribution Agreement. The 2,000,000 shares issued as a
commitment fee were valued at $0.4 per share or of $800,000 based
on the fair value at issuance date.  The $800,000 commitment fee has
been debited against additional paid in capital in accordance with the
provisions of Staff Accounting Bulletin Topic 5A .





There is
no limit to the amount of each advance. We are not obligated to utilize any of
the $5.0 million available under the SEDA and there are no minimum commitments
or minimum use penalties. Based upon our outstanding shares of common stock, and
warrants to purchase common stock as of December 31, 2008, there is no limit on
the number of share we may issue without stockholder approval. Based on the
price of our stock at December 31, 2008, the maximum number of shares that could
be sold under this agreement is approximately 362,500 shares.




On May
17, 2008 the Company entered into an agreement with Wakabayashi Fund LLC in
order to arrange financing for working capital as an intermediary. Wakabayashi
Fund LLC provides capital funding services including serving as an investment
banking liaison and acts as capital consultant for a six month period. The
Company issued 111,111 shares of restricted common stock upfront at $1.35 per
share, the market price of the stock on the commitment date of the agreement.
Additionally, the Company agreed to pay for the capital funding services 7%
success fee. These share issuances were recorded at $1.35 per share in the total
amount of $150,000 in accordance with measurement date principles prescribed
under EITF 96-18. The Company is amortizing the fair value of the shares in
general and administration expenses over the term of the agreement to
stock-based compensation expense, which amounted to $150,000 and $0 for the
year ended December 31, 2008 and December 31, 2007, respectively and
$150,000 for the period from April 26, 2006 (date of inception) to December 31,
2008, in accordance with EITF 96-18.




On April
18, 2008 the Company entered an agreement with RedChip Companies Inc. and
Partner Media4Equity Inc. for an investor relationship program for a period of
12 months. The Company secured and delivered 306,570 restricted common shares
with a market price of $0.70 for a 12 months period in connection with RedChip
investor relationship services. The compensation for Media4Equity services was
the delivery of 1,500,000 restricted common shares. These share issuances were
recorded at $0.75 per share, the market price of the stock on the commitment
date of the agreement, for a total amount of $1,125,000 in accordance with
measurement date principles prescribed under EITF 96-18. The Company is
amortizing the fair value of the shares in general and administration expenses
over the term of the agreement to stock-based compensation expense, which
amounted to $792,123 and $0 for the year ended December 31, 2008 and
December 31, 2007, respectively and $792,123 for the period from April 26, 2006
(date of inception) to December 31, 2008, in accordance with EITF
96-18.







The
accompanying notes are an integral part of


these
consolidated financial statements


56
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      10-
            STOCKHOLDERS’
      EQUITY (Continued)




Summaries
of non-vested restricted stock awards are as follows:








#
                              Shares
                            
                            
                            Weighted
      AverageGrant date fair
      valueNon-vested
      at December 31, 2007
                            
                            
                            1,205,332
                            
                            
                            $
                            1,932,569Granted
      in 2008
                            
                            
                            1,917,681
                            
                            
                            
                            1,489,599ForfeitedVested
      in 2008
                            
                            
                            (2,567,645
                            )
                            
                            
                            (3,018,710
                            )Non-vested
      at December 31, 2008
                            
                            
                            555,368
                            
                            
                            $
                            403,458







As of
December 31, 2008, we had estimated unrecognized stock-based compensation
expense of $403,458 related to nonvested restricted stock awards and
units.  This expense is expected to be recognized over a
weighted-average period of 1 year.




The
weighted average grant-date fair value of restricted stock awards granted for
the year ended December 31, 2008 and 2007 were $0.73 and $1.6,
respectively. The total fair value of shares vested during the year ended
December 31, 2008 was $403,458.




On
February 20, 2008 shares of the Company’s common stock was approved quotation
and trading by FINRA on the Over The Counter Bulletin Board (OTCBB) under the
ticker symbol PWRV. Trading commences in the Company’s securities on the OTCBB
beginning on February 21, 2008.




On
January 30, 2008, pursuant to a private placement under Regulation S of the
Securities Act of 1933, as amended, the Company sold 104,000 shares of its
common stock at $3.25 per share for aggregate proceeds of $105,625.




In October
2007, pursuant to a private placement under Regulation S of the Securities Act
of 1933, as amended, the Company sold 104,000 shares of its common stock at
$2.50 per share for aggregate proceeds of $260,000. The Company also entered
into a Registration Rights Agreement, pursuant to which it agreed that as soon
as practicable from the Offering Termination Date, as defined in the
Registration Rights Agreement, it would file a registration statement with
the SEC covering the resale of the shares of the Company’s common stock that are
issuable pursuant to this private placement. There are no stipulated damages
outlined in the Registration Rights Agreement for failure to file within the
agreed upon time frame. Under such agreement, the holder is entitled to
exercise all rights granted by law, including recovery of damages under
this agreement. The company filed on Form SB-2 a registration statement with the
SEC on November 14, 2007, which was approved on January 30, 2008.




On
October 24, 2007, the Company entered into a restricted stock agreement with
Ildiko Rozsa, who is to serve as the Chief Financial Officer of the Company. As
part of the agreement Ms. Rozsa was granted 250,000 shares of the Company’s
restricted common stock of which 100,000 shares are vested upon grant and 30,000
shares will vest quarterly, at the end of each quarter, so long as Ms. Rozsa is
employed by the Company.




On
October 1, 2007, the Company entered into a restricted stock agreement with
Szilvia Toth, the Chief Accounting Officer of the Company. As part of the
agreement Ms. Toth was granted 100,000 shares of restricted common stock of
which 50,000 shares are vested upon grant and 10,000 shares will vest quarterly,
at the end of each quarter, so long as Ms. Toth is employed by the
Company.




On
October 24, 2007, the Company entered into a restricted stock agreement with
Mihaly Zala, the Chief Technology Officer of the Company. As part of the
agreement Mr. Zala was granted 150,000 shares of restricted common stock, which
will vest on equal installments of 30,000 shares quarterly, at the end of each
quarter, so long as Mr. Zala is employed by the Company.







The
accompanying notes are an integral part of


these
consolidated financial statements


57
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      10 -
            STOCKHOLDERS’
      EQUITY (Continued)




On
October 24, 2007, the Company entered into a restricted stock agreement with
Imre Eotvos, the Technology Assistant of the Company. As part of the agreement
Mr. Eotvos was granted 25,000 shares of restricted common stock, which will vest
on equal installments of 5,000 shares quarterly, at the end of each quarter, so
long as Mr. Eotvos is employed by the Company.




On
October 1, 2007, the Company entered into a restricted stock agreement with
Sandorne Juhasz, who provides payroll accounting services to the Company on a
subcontracting basis. As part of the agreement Ms. Juhasz was granted 11,000
shares of restricted common stock, of which 8,000 is will vest upon grant and
750 shares will vest quarterly, at the end of each quarter, so long as Ms.
Juhasz is employed by the Company.




On
October 24, 2007, the Company entered into a restricted stock agreement with
Daniel Kun, Jr., who is to serve as Secretary and Vice President of the company
on a going forward basis. Previously Mr. Kun served as Secretary, Treasurer and
Chief Financial Officer. As part of the agreement Mr. Kun was granted 250,000
shares of restricted common stock, which will vest on equal installments of
50,000 shares quarterly, at the end of each quarter, so long as Mr. Kun is
employed by the Company.





On
October 24, 2007, the Company entered into a restricted stock agreement with
Viktor Rozsnyay, who is serving as President and Chief Executive Officer of the
Company. As part of the agreement Mr. Rozsnyay was granted 250,000 shares of
restricted common stock, which will vest on equal installments of 50,000 shares
quarterly, at the end of each quarter, so long as Mr. Rozsnyay is employed by
the Company.




As
consideration for the above services, the Company issued an aggregate of
1,036,000 shares of the Company’s common stock. These share issuances were
recorded at $2.5 per share in the total amount of $2,590,000 in accordance with
measurement date principles prescribed under SFAS 123(R). The fair value of
share was determined based on the last private placements. The Company is
amortizing the fair value of the shares over the term of the agreement to
stock-based compensation expense, which amounted to $1,755,625 and $834,375 for
the year ended December 31, 2008 and December 31, 2007, respectively and
$2,590,000 for the period from April 26, 2006 (date of inception) to December
31, 2008, in accordance with SFAS 123R.




In June
2007, pursuant to a private placement under Regulation S of the Securities Act
of 1933, as amended, the Company sold 2,250,000 shares of its common stocks at
$0.34 per share for a total subscription receivable of $765,000. The Company
also entered into a Registration Rights Agreement, pursuant to which it agreed
that as soon as practicable from the Offering Termination Date, as defined in
the Registration Rights Agreement, it would file a registration statement
with the SEC covering the resale of the shares of the Company’s common stock
that are issuable pursuant to this private placement. There are no stipulated
damages outlined in the Registration Rights Agreement for failure to file within
the agreed upon time frame. Under such agreement, the holder is entitled to
exercise all rights granted by law, including recovery of damages under
this agreement.




In June
2007, the Company entered into five consulting agreements with five consultants
for 12 to 24 month periods. According to the agreements the consultants will
provide general business consulting services. As consideration for such
services, the Company issued an aggregate of 1,375,000 shares of the Company’s
common stock. These share issuances were recorded at $0.34 per share in the
total amount of $467,501 in accordance with measurement date principles
prescribed under EITF 96-18. The Company is amortizing the fair value of the
shares over the term of the agreement to stock-based compensation expense, which
amounted to $169,859 and $290,557 for the year ended December 31, 2008 and
December 31, 2007, respectively and $460,416 for the period from April 26, 2006
(date of inception) to December 31, 2008, in accordance with EITF
96-18.







The
accompanying notes are an integral part of


these
consolidated financial statements


58
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      10 -
            STOCKHOLDERS’
      EQUITY (Continued)




On April
10, 2007, PDV entered into a reverse merger transaction with Vidatech. In
connection with the merger 2,500,000 shares of PDV common stock remained
outstanding and PDV issued 33,300,000 shares of its common stock for all the
outstanding common stock of Vidatech. As a result of this transaction, the
former stockholders of Vidatech became the controlling stockholders of PDV.
Accordingly, the reverse merger has been accounted for as a recapitalization of
Vidatech.




In April
2007, the Company entered into an agreement with two professionals for legal
services. According to the agreement the professionals provided legal services
to the Company in 2007. In connection with these services, the Company issued to
them 500,000 shares of the Company’s common stock. These share issuances were
recorded at $0.34 per share in the total amount of $170,000 and the related
expense was recorded under general administration.




In
connection with the ITA (See Note 5), the Company issued 100,000 shares of the
Company’s common stock to the Inventors. These shares issuance were recorded at
fair value of $0.34 per share in the total amount of $34,000. The cost of the
related invention was recorded as research and development expense.




In May,
2006, the Company entered into a short term loan agreement with its Chief
Executive Officer, Viktor Rozsnyay, for approximately $96,100 with a maturity of
April 30, 2007. On December 28, 2006 Mr. Rozsnyay elected to convert the loan
into equity, which is recorded as additional paid in capital.




In March,
2007, the Company entered into a short term loan agreement with its Chief
Financial Officer, Daniel Kun Jr., for approximately $53,735 with a maturity of
March 31, 2007. On March 31, 2007 Mr. Kun elected to convert the loan into
equity, which is recorded as additional paid in capital.




NOTE
      11 -
            GENERAL
      AND ADMINISTRATION




General
and administration expenses consisted of the followings at December 31, 2008 and
at December 31, 2007:







December
      31,
                                    2008
                                  
                                  
                                  December
      31,
                                    2007Stock
      based compensation
                                  
                                  
                                  1,755,625
                                  
                                  
                                  
                                  834,375Stock
      based Consultant services
                                  
                                  
                                  169,859
                                  
                                  
                                  
                                  460,557Marketing
      expenses
                                  
                                  
                                  1,093,224
                                  
                                  
                                  
                                  -Other
                                  
                                  
                                  231,289
                                  
                                  
                                  
                                  510,434Total
                                  
                                  
                                  3,249,997
                                  
                                  
                                  
                                  1,805,366







The
accompanying notes are an integral part of


these
consolidated financial statements


59
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      12 -
            SUBSEQUENT
      EVENTS




On
February 5, 2009, the Company entered into a restricted stock agreement with
Ildiko Rozsa, who is to serve as the Chief Financial Officer of the Company. As
part of the agreement Ms. Rozsa was granted 120,000 shares of the Company’s
restricted common stock of which 30,000 shares will vest quarterly, at the end
of each quarter, so long as Ms. Rozsa is employed by the Company.




On
February 5, 2009, the Company entered into a restricted stock agreement with
Szilvia Toth, the Chief Accounting Officer of the Company. As part of the
agreement Ms. Toth was granted 120,000 shares of restricted common stock, of
which 30,000 shares will vest quarterly, at the end of each quarter, so long as
Ms. Toth is employed by the Company.




On
February 5, 2009, the Company entered into a restricted stock agreement with
Mihaly Zala, the Chief Technology Officer of the Company. As part of the
agreement Mr. Zala was granted 120,000 shares of restricted common stock, which
will vest on equal installments of 30,000 shares quarterly, at the end of each
quarter, so long as Mr. Zala is employed by the Company.




On
February 5, 2009, the Company entered into a restricted stock agreement with
Imre Eotvos, the Technology Assistant of the Company. As part of the agreement
Mr. Eotvos was granted 200,000 shares of restricted common stock, which will
vest on equal installments of 50,000 shares quarterly, at the end of each
quarter, so long as Mr. Eotvos is employed by the Company.




On
February 5, 2009, the Company entered into a restricted stock agreement with
Daniel Kun, Jr., who is to serve as Secretary and Vice President of the company
on a going forward basis. Previously Mr. Kun served as Secretary, Treasurer and
Chief Financial Officer. As part of the agreement Mr. Kun was granted 200,000
shares of restricted common stock, which will vest on equal installments of
50,000 shares quarterly, at the end of each quarter, so long as Mr. Kun is
employed by the Company.




As
consideration for the above services, the Company issued an aggregate of 760,000
shares of the Company’s common stock. These share issuances were recorded at
$0.4 per share in the total amount of $304,000 in accordance with measurement
date principles prescribed under FAS 123 (R).





Genetic
Immunity Subsequent





On
February 23, 2009 the Company entered into a consultation agreement with Genetic
Immunity, a Hungarian biotechnology research and development company working on
immune amplification nanomedicine products, including a HIV vaccine currently in
Phase 2 clinical trials.





According
to the terms of the agreement PDV will provide Genetic Immunity business
development expertise, will facilitate the publication, via internationally
distributed press releases, of Genetic Immunity’s past, present and future news
items, and will advise Genetic Immunity on going public in the United States
based on Power of the Dream Ventures’ own experience in achieving public
states.





In
addition, PDV was granted rights to acquire equity in Genetic Immunity in one or
several tranches for total consideration of USD $10 million in exchange for 20%
equity in the Company, if all options are exercised.








The
accompanying notes are an integral part of


these
consolidated financial statements


60
 Index




POWER
OF THE DREAMS VENTURES, INC. (formerly TIA V)


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007






NOTE
      12 -
            SUBSEQUENT
      EVENTS (Continued)





Exact
terms of this equity purchase option are: PDV is to acquire 2% of the Company
via a USD 1,000,000 investment by April 30, 2009 in exchange for 72 units of the
Genetic Immunity’s Class B stock; Company is to acquire an additional 2% of the
Genetic Immunity via a USD 1,000,000 investment by August 30, 2009 in exchange
for 72 units of the Genetic Immunity’s Class B stock. PDV is also granted an
option to acquire an additional 16% of the Genetic Immunity via an $8,000,000
investment by February 20, 2010, in tranches or in whole, in exchange for 578
units of the Genetic Immunity’s Class B stock. If the Company misses the first
deadline of April 30, 2009 this agreement shall immediately terminate. If the
Company completes the first investment but missed the second date of August 30,
2009 this agreement shall terminate, but the Company will retain the Class B
units already acquired. Any portion of the optional 16% equity purchase that is
not exercised and closed by February 23, 2010 shall terminate.








The accompanying notes are
an integral part of


these
consolidated financial statements






61