<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

        For the transition period from _______________ to _______________

                          COMMISSION FILE NO. 000-24455

                                  TORVEC, INC.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                          <C>
            NEW YORK                                              16-1509512
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)
</TABLE>

         1169 PITTSFORD VICTOR ROAD, SUITE 125 PITTSFORD, NEW YORK 14534
              (Address of principal executive offices and Zip Code)

                                 (585) 248-0740
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
   (Former name, former address and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                                                  Yes [X] No [ ]

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).                                                    Yes [ ] No [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]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the issuer's classes
               of common stock, as of the latest practicable date:

<TABLE>
<CAPTION>
                               Number of Shares Outstanding at
            Class                        May 19, 2006
            -----              ---------------------------------
<S>                            <C>
COMMON STOCK, $.01 PAR VALUE              30,321,267
</TABLE>


<TABLE>
<CAPTION>
                                      Shares to cover the options will not be
Options Outstanding & Not Exercised       issued until they are exercised.
-----------------------------------   ---------------------------------------
<S>                                   <C>
             1,823,895
</TABLE>

<PAGE>

                                        2


TORVEC, INC. AND SUBSIDIARIES
(A Development Stage Company)

                                      INDEX

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                          ------
<S>                                                                       <C>
         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Torvec, Inc. and Subsidiaries Condensed Consolidated Balance
         Sheets - March 31, 2006 (Unaudited) and December 31, 2005
         (Audited)                                                        3


         Torvec, Inc. and Subsidiaries Condensed Consolidated
         Statements of Operations and Comprehensive Income (Loss) --
         For the Three Months Ended March 31, 2006 and 2005 (Unaudited)   4

         Torvec, Inc. and Subsidiaries Condensed Consolidated
         Statements of Cash Flows -- For the Three Months Ended
         March 31, 2006 and 2005 (Unaudited)                              5

         Notes to Condensed Consolidated Financial Statements             6 - 23

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.                                       24

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.      32

Item 4.  Controls and Procedures.                                         33

                         PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.                                               34

Item 1A. Risk Factors.                                                    35

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.     35

Item 3.  Defaults Upon Senior Securities.                                 35

Item 4.  Submission of Matters to a Vote of Security Holders.             35

Item 5.  Other Information.                                               35

Item 6.  Exhibits.                                                        35 -41

         SIGNATURES PAGE                                                  42

         EXHIBIT INDEX                                                    43
</TABLE>
<PAGE>

                                        3


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Condensed Consolidated Balance Sheets
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
                                                           MARCH 31, 2006   DECEMBER 31, 2005
                                                           --------------   -----------------
                                                             (UNAUDITED)      (DERIVED FROM
                                                                            AUDITED FINANCIAL
                                                                               STATEMENTS)
<S>                                                        <C>              <C>
ASSETS
Current assets:
   Cash                                                     $     75,000      $     51,000
   Prepaid expenses and other receivable                          58,000            67,000
                                                            ------------      ------------
      Total current assets                                       133,000           118,000
                                                            ------------      ------------
Property and Equipment:
   Office equipment                                               42,000            42,000
   Shop equipment                                                126,000           126,000
   Leasehold improvements                                          3,000             3,000
   Transportation equipment                                       99,000            99,000
                                                            ------------      ------------
                                                                 270,000           270,000
Less accumulated depreciation and amortization                    93,000            82,000
                                                            ------------      ------------
Net property and equipment                                       177,000           188,000
                                                            ------------      ------------
Other Assets:
License, less accumulated amortization of $1,762,000
   and $1,548,000, respectively                                1,498,000         1,712,000
Deposits                                                           2,000             2,000
                                                            ------------      ------------
      Total Other Assets                                       1,500,000         1,714,000
                                                            ------------      ------------
                                                            $  1,810,000      $  2,020,000
                                                            ============      ============
LIABILITIES
Current liabilities:
   Notes payable                                            $      5,000      $      5,000
   Accounts payable                                              166,000           148,000
   Accrued liabilities                                         1,541,000         1,541,000
                                                            ------------      ------------
      Total current liabilities                                1,712,000         1,694,000
Deferred revenue                                                 150,000           150,000
Notes payable, net of current portion                             18,000            19,000
                                                            ------------      ------------
      Total liabilities                                        1,880,000         1,863,000
                                                            ------------      ------------
Minority interest                                                     --             8,000
                                                            ------------      ------------
Commitments and other matters
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 100,000,000
   shares authorized 3,300,000 designated as
   Class A, Non-voting, cumulative dividend
   $.40 per share, per annum, convertible
   preferred, 517,493 shares issued and
   outstanding (liquidation preference $2,367,887)                 5,000             5,000
   300,000 designated as Class B, Non-voting,
   cumulative dividend $.50 per share, per annum,
   convertible preferred, 42,500 shares issued
   and outstanding (liquidation preference $245,605)
   Common stock, $.01 par value, 40,000,000 shares
   authorized, 30,201,266 and 30,052,630 issued and
   outstanding, at March 31, 2006 and December 31, 2005,
   respectively                                                  302,000           300,000
Additional paid-in capital                                    37,851,000        37,267,000
Shares issued for future consulting services                     (47,000)         (103,000)
Deficit accumulated during the development stage             (38,181,000)      (37,320,000)
                                                            ------------      ------------
                                                                 (70,000)          149,000
                                                            ------------      ------------
                                                            $  1,810,000      $  2,020,000
                                                            ============      ============
</TABLE>

See notes to condensed financial statements

<PAGE>

                                        4


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Condensed Consolidated Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
                                                                                      SEPTEMBER 25,
                                                                                           1996
                                                              THREE MONTHS ENDED       (INCEPTION)
                                                                  MARCH 31,              THROUGH
                                                          -------------------------     MARCH 31,
                                                              2006          2005           2006
                                                          -----------   -----------   -------------
<S>                                                       <C>           <C>           <C>
REVENUE                                                   $        --   $        --   $         --
                                                          -----------   -----------   ------------
COST AND EXPENSES:
   Research and development                                   397,000       501,000     13,174,000
   General and administrative                                 472,000       996,000     26,279,000
                                                          -----------   -----------   ------------
LOSS BEFORE MINORITY INTEREST                                (869,000)   (1,497,000)   (39,453,000)
   Minority interest in loss of consolidated subsidiary         8,000        69,000      1,272,000
                                                          -----------   -----------   ------------
NET LOSS                                                     (861,000)   (1,428,000)    38,181,000
   Preferred stock beneficial conversion feature                   --       159,000        715,000
   Preferred stock dividend                                    55,000        32,000        330,000
                                                          -----------   -----------   ------------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS              $  (916,000)  $(1,619,000)  $(39,226,000)
                                                          ===========   ===========   ============
BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON
   STOCKHOLDERS PER SHARE                                 $     (0.03)  $     (0.06)
                                                          ===========   ===========
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON
   STOCK - BASIC AND DILUTED                               30,128,000    29,137,000
                                                          ===========   ===========
</TABLE>

See notes to condensed financial statements

<PAGE>

                                        5


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Condensed Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
                                                                                               SEPTEMBER 25,
                                                                                                    1996
                                                                                                (INCEPTION)
                                                                        THREE MONTHS ENDED        THROUGH
                                                                            MARCH 31,            MARCH 31,
                                                                     -----------------------   -------------
                                                                        2006         2005           2006
                                                                     ---------   -----------   -------------
<S>                                                                  <C>         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                          $(861,000)  $(1,428,000)  $(38,181,000)
   Adjustments to reconcile net loss to net cash used in
      operating activities:
         Depreciation and amortization                                 225,000       219,000      1,879,000
         Gain on sale of fixed assets                                       --       (10,000)       (10,000)
         Minority interest in loss of consolidated subsidiary           (8,000)      (69,000)    (1,272,000)
         Compensation expense attributable to common stock in
            Subsidiary                                                      --            --        619,000
         Common stock issued for services                              236,000       750,000      9,617,000
         Shares issued for future consulting services                   56,000                       56,000
         Contribution of services                                       75,000        75,000      1,884,000
         Compensatory common stock, options and warrants                39,000        41,000     13,027,000
         Changes in:
            Prepaid expenses                                             9,000       142,000        103,000
            Accounts payable and accrued expenses                       19,000       (12,000)     3,616,000
            Deferred revenue                                                --            --        150,000
            Deposits                                                        --            --         (2,000)
                                                                     ---------   -----------   ------------
               Net cash used in operating activities                  (210,000)     (292,000)    (8,514,000)
                                                                     ---------   -----------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                       --        (5,000)      (270,000)
   Cost of acquisition                                                      --            --        (16,000)
   Proceeds from sale of fixed asset                                        --        10,000         10,000
                                                                     ---------   -----------   ------------
               Net cash provided by (used in) investing activities          --         5,000       (276,000)
                                                                     ---------   -----------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from sales of common stock and upon exercise of
   options and warrants                                                     --            --      6,490,000
   Net proceeds from sales of preferred stock                          233,000       190,000      2,402,000
   Net proceeds from sale of subsidiary stock                               --            --        234,000
   Net proceeds from sale of warrants                                    2,000                        2,000
   Proceeds from long - term borrowings                                     --            --         29,000
   Repayments of long-term debt                                         (1,000)           --        (30,000)
   Proceeds from (repayment of) stockholders' loans-net                     --            --        103,000
   Distributions                                                                                   (365,000)
                                                                     ---------   -----------   ------------
               Net cash provided by financing activities               234,000       190,000      8,865,000
                                                                     ---------   -----------   ------------
NET INCREASE (DECREASE) IN CASH                                         24,000       (97,000)        75,000
Cash at beginning of period                                             51,000       574,000             --
                                                                     ---------   -----------   ------------
CASH AT END OF PERIOD                                                $  75,000   $   477,000   $     75,000
                                                                     =========   ===========   ============
</TABLE>

See notes to condensed financial statements
<PAGE>

                                       6


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006
(unaudited)

NOTE A - THE COMPANY

The interim information contained herein with respect to the three month periods
ended March 31, 2006 and March 31, 2005 and the period from September 25, 1996
(inception) through March 31, 2006 has not been audited but was prepared in
conformity with generally accepted accounting principles for interim financial
information and instructions for Form 10-Q and Item 310(b) of Regulation S-K.
Accordingly, the condensed consolidated financial statements do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. Included are all ordinary adjustments, which
in the opinion of management are necessary for a fair presentation of the
financial information for the three months ended March 31, 2006 and 2005, and
since inception. The results are not necessarily indicative of results to be
expected for the year.

Torvec, Inc. (the "Company") was incorporated in New York on September 25, 1996.
The company, which is in the development stage, attempts to develop automotive
technology for use in automotive applications. The company intends to develop
and design specific applications for this technology relating to steering drives
for tracked vehicles, infinitely variable transmissions, hydraulic pumps and
motors and constant velocity joints and spherical gearings.

For the period from September 25, 1996 (inception) through March 31, 2006, the
company has accumulated a deficit of $38,181,000, and at March 31, 2006 has a
working capital deficiency of $1,579,000 and has been dependent upon equity
financing and advances from stockholders to meet its obligations and sustain
operations. The company's efforts have been principally devoted to research and
development, raising capital and marketing of its products. Substantial
additional financing will be required by the company to fund its activities. In
the circumstances the company has established a budget to provide for its
continued operations through December 31, 2006. On April 11, 2006, the company
had secured a funding commitment from a stockholder and officer to fund any cash
shortfall for operations through December 31, 2006. In addition to the funding
commitment, the company has sold 58,250 Class A Preferred shares through March
31, 2006 for proceeds of $233,000.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]  CONSOLIDATION:

     The financial statements include the accounts of the company, its
     majority-owned subsidiary, Ice (69.26% owned at March 31, 2006), and its
     wholly owned subsidiary Iso-Torque Corporation. All material intercompany
     transactions and account balances have been eliminated in consolidation.

[2]  PROPERTY AND EQUIPMENT:

     Equipment, including a prototype vehicle, is stated at cost less
     accumulated depreciation. Depreciation is provided using the straight-line
     method over the estimated useful lives of the assets which range from three
     to seven years. Leasehold improvements are being amortized over shorter of
     lease term or useful life.

[3]  RESEARCH AND DEVELOPMENT AND PATENTS:

     Research and development costs and patent expenses are charged to
     operations as incurred.

<PAGE>

                                       7


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[4]  LICENSE:

     Through December 31, 2004, the license was being amortized over its
     estimated remaining useful life which correlate to the underlying patent.
     Effective January 1, 2005, the company changed its estimate of economic
     useful life to 3 years. Charges for amortization in each of the quarters
     ended March 31, 2006, and 2005 was $214,000. Such amortization expense is
     included in research and development expense.

     Total future amortization of the license are as follows:

<TABLE>
<CAPTION>
Period Ending
   March 31,      Amount
-------------   ----------
<S>             <C>
     2007       $  856,000
     2008          642,000
                ----------
                $1,498,000
                ==========
</TABLE>

[5]  USE OF ESTIMATES:

     The preparation of financial statements in conformity with U.S. generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenue and expenses
     during the reporting period. Such estimates are used in valuing the useful
     lives of its intangible assets and the future realizable value of such
     assets. These estimates are subject to a high degree of judgment and
     potential change. Actual results could differ from those estimates.

[6]  LOSS PER COMMON SHARE:

     Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
     Share," requires the presentation of basic earnings per share, which is
     based on common stock outstanding, and dilutive earnings per share, which
     gives effect to options, warrants and convertible securities in periods
     when they are dilutive. At March 31, 2006 and 2005, the company excluded
     3,574,015 and 2,841,417 potential common shares, respectively, relating to
     convertible preferred stock outstanding, options and warrants from its
     diluted net loss per common share calculation because they are
     anti-dilutive.

[7]  FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The carrying amount of cash, accounts payable, notes payable and accrued
     expenses approximates their fair value due to the short maturity of those
     instruments.

<PAGE>

                                       8


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[8]  STOCK-BASED COMPENSATION:

     In December 1997, the Board of Directors of the Company approved a Stock
     Option Plan (the "Plan") which provides for the granting of up to 2,000,000
     shares of common stock, pursuant to which officers, directors, key
     employees and key consultants/advisors are eligible to receive incentive,
     nonstatutory or reload stock options. Options granted under the Plan are
     exercisable for a period of up to 10 years from date of grant at an
     exercise price which is not less than the fair value on date of grant,
     except that the exercise period of options granted to a stockholder owning
     more than 10% of the outstanding capital stock may not exceed five years
     and their exercise price may not be less than 110% of the fair value of the
     common stock at date of grant. Options may vest over five years.

     Effective January 1, 2006, we adopted Statement of Financial Accounting
     Standards ("SFAS") No. 123R, "Share Based Payment." We elected to use the
     modified prospective transition method, therefore, prior period results
     were not restated. Prior to the adoption of SFAS 123R, stock-based
     compensation expense related to stock options was not recognized in the
     results of operations if the exercise price was at least equal to the
     market price of the common stock on the grant date, in accordance with
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees".

     SFAS 123R requires all share-based payments to employees, including grants
     of employee stock options, to be recognized as compensation expense over
     the service period (generally the vesting period) in the consolidated
     financial statements based on their fair values. Under the modified
     prospective method, awards that were granted, modified, or settled on or
     after January 1, 2006 are measured and accounted for in accordance with
     SFAS 123R. Unvested equity-classified awards that were granted prior to
     January 1, 2006 will continue to be accounted for in accordance with SFAS
     123, except that all awards are recognized in the results of operations
     over the remaining vesting periods. The impact of forfeitures that may
     occur prior to vesting is also estimated and considered in the amount
     recognized. In addition, the realization of tax benefits in excess of
     amounts recognized for financial reporting purposes will be recognized as a
     financing activity in accordance with SFAS 95, as amended.

     No tax benefits were attributed to the stock-based compensation expense
     because a valuation allowance was maintained for substantially all net
     deferred tax assets. We elected to adopt the alternative method of
     calculating the historical pool of windfall tax benefits as permitted by
     FASB Staff Position (FSP) No. SFAS 123R-c, "Transition Election Related to
     Accounting for the Tax Effects of Share-Based Payment Awards." This is a
     simplified method to determine the pool of windfall tax benefits that is
     used in determining the tax effects of stock compensation in the results of
     operations and cash flow reporting for awards that were outstanding as of
     the adoption of SFAS 123R.

<PAGE>

                                       9


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[8]  STOCK-BASED COMPENSATION: (CONTINUED)

     As of March 31, 2006, the Company did not have any unrecognized stock
     compensation related to unvested awards.

     The following table illustrates the effect on net loss and earnings per
     share if the fair value based method had been applied to the prior period.

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                           MARCH 31, 2005
                                                         ------------------
<S>                                                      <C>
Reported net loss attributable to common stockholders       $(1,619,000)
Add: Stock-based compensation expense under APB No.
25 included in net loss, net of related tax effects              41,000
Stock-based employee compensation determined under
the fair value based method prior to adoption of SFAS
123R, net of related tax effects                                (41,000)
                                                            -----------
Pro Forma net loss attributable to common stockholders      $(1,619,000)
                                                            ===========
Loss per share:
   Basic and diluted attributable to common
   stockholders - as reported                               $     (0.06)
   Basic and diluted attributable to common
   stockholders - pro forma                                 $     (0.06)
</TABLE>

     Stock option compensation expense was $0 for the three months ended March
     31, 2005.

     The following summarizes the activity of the Company's stock options for
     the three months ended March 31, 2006:

<TABLE>
<CAPTION>
                                                               WEIGHTED
                                                  WEIGHTED     AVERAGE
                                                   AVERAGE    REMAINING    AGGREGATE
                                                  EXERCISE   CONTRACTUAL   INTRINSIC
                                        SHARES      PRICE        TERM        VALUE
                                      ---------   --------   -----------   ---------
<S>                                   <C>         <C>        <C>           <C>
Number of shares under option plan:
Outstanding at January 1, 2006        1,823,895     $4.85
Granted
Exercised
Canceled or expired
                                      ---------     -----
Outstanding at March 31, 2006         1,823,895     $4.85        3.75          $0
                                      =========     =====        ====         ===
Exercisable at March 31, 2006         1,823,895     $4.85        3.75          $0
                                      =========     =====        ====         ===
</TABLE>

     The Company did not grant any options under the plans during the quarter
     ended March 31, 2006.

     At March 31, 2006, all outstanding options were fully vested.

<PAGE>

                                       10


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[9]  REVENUE RECOGNITION:

     Revenue in connection with the granting of a license to Variable Gear LLC
     is to be recognized when all conditions for earning such fee is complete.
     Revenue will be recognized when the related products are shipped, title has
     passed, collections are reasonably assured and the company has no further
     obligation. An allowance for discounts and returns will be taken as a
     reduction of sales within the same period the revenue is recognized. Such
     allowances will be based on facts and circumstances.

[10] IMPAIRMENT OF LONG-LIVED ASSETS:

     The company follows Statement of Financial Accounting Standards No. 144,
     "Accounting for the Impairment or Disposal of Long-Lived Assets."
     Accordingly, whenever events or circumstances indicate that the carrying
     amount of an asset may not be recoverable, management assesses the
     recoverability of the assets. An impairment loss is recognized whenever the
     carrying amount of the asset exceeds its fair value.

[11] RECENT ACCOUNTING STANDARDS:

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
     Corrections - a replacement of APB Opinion No. 20, Accounting Changes, and
     FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
     Statements, and changes the requirements for the accounting for and
     reporting of a change in accounting principle. SFAS 154 requires
     retrospective application to prior periods financial statements of a
     voluntary change in accounting principle unless it is impractical to
     determine period specific changes. This statement is effective for fiscal
     periods beginning after December 15, 2005 and is not expected to have a
     significant impact on the Company's financial statements.

NOTE C - LICENSES FROM THE TRUSTEES OF DARTMOUTH COLLEGE

     On November 28, 2000, Ice entered into a 20-year exclusive license with the
     Trustees of Dartmouth College ("Dartmouth") for land-based applications to
     a novel ice adhesion modification system developed by Dr. Victor Petrenko
     at Dartmouth's Thayer School of Engineering for $25,000. The license
     agreement provided for a single payment of $140,000 (paid in 2000) for
     sponsored research and a royalty of 3.5% based on the value of net sales of
     licensed product with minimum annual payments of $10,000 for the first two
     years, $15,000 for the third year and $25,000 per year thereafter. In
     addition, the agreement provides for the payment of 50% of sub-license fee
     income.

     Expense for the above agreements totaled $5,750 and $5,750 for the quarters
     ended March 31, 2006 and 2005, respectively. On February 27, 2004,
     Dartmouth agreed to defer payment of the $15,000 royalty due November 2003.
     The company paid the $15,000 deferred royalty fee and the $25,000 royalty
     fee for the 2004 license year in the first quarter 2005.

<PAGE>

                                       11


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE D - RELATED PARTY TRANSACTIONS

[1]  Commencing January 1, 2004, the Gleasmans entered into an arrangement with
     the company to provide consulting services and assign new patents, existing
     patent improvements and all know-how in connection with all their
     inventions to the company on a noncompensated basis. In addition, Keith
     E. Gleasman will continue to serve as President and as a director and James
     Y. Gleasman will serve as Chief Executive Officer, Interim Chief Financial
     Officer, Investor Relations and as a director, again on a noncompensated
     basis. In accordance with this arrangement, for the quarter ended March 31,
     2006, the company did not pay the Gleasmans any consulting fees for their
     services. The company recorded approximately $75,000 for the estimated
     value of these services as a contribution to capital based upon approved
     time and hours spent and recorded $50,000 to research and development and
     $25,000 to general and administrative.

[2]  During 2005 and 2004, the company paid a member of the Gleasman family
     for administrative, investor and engineering services rendered. The
     individual is paid as a consultant for services. This individual was paid
     $11,040 and $11,462 for the quarters ended March 31, 2006 and 2005,
     respectively. Management believes the rate of compensation is reasonable.

[3]  During the years ended December 31, 2005 and 2004, the company issued to a
     stockholder 90,000 and 35,000 common shares as rent for the company's use
     of a facility valued at approximately $259,000 and $194,000, respectively,
     based upon the fair market value of the common stock on the date of
     issuance. This arrangement terminated effective February 28, 2006. No
     common shares were issued to the stockholder during the quarter ended March
     31, 2006 and no further amounts are due under the arrangement. The company
     has recorded $42,000 of rent expense for the month of March 2005.


[4]  During the three months ended March 31, 2006 and 2005 the company incurred
     approximately $0 and $147,000, respectively, for consulting services
     provided to the company by outside counsel exclusive of legal services.


<PAGE>

                                       12


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE E - NOTE PAYABLE - STOCKHOLDERS, OFFICER AND OTHER NOTES PAYABLE

NOTES PAYABLE - FINANCIAL INSTITUTION

     During the year ended December 31, 2005, the company financed a vehicle as
     a prototype in which the vehicle is collateral for a loan. The loan in the
     amount of $24,000 is paid in monthly installments of principal and interest
     at 6.59% per annum of $479 through December 2010.

     The following represents the required minimum payments:

<TABLE>
<CAPTION>
      Period Ending March 31
      ----------------------
<S>                                 <C>
2007                                $ 5,700
2008                                  5,700
2009                                  5,700
2010                                  5,700
2011                                  4,300
                                    -------
   Total Minimum payments            27,000
Less-amount representing interest     4,000
                                    -------
                                     23,000
Less-Current Maturities               5,000
                                    -------
Long Term Portion                   $18,000
                                    =======
</TABLE>

<PAGE>

                                       13


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY

[1]  CLASS A PREFERRED STOCK:

     In January 2002, the company authorized the sale of up to 2,000,000 shares
     of its Class A Non-Voting Cumulative Convertible Preferred Stock ("Class A
     Preferred"). During 2002, the company sold 38,500 shares at $4.00 per share
     of its Class A Preferred in a private placement offering for approximately
     $142,000 in net proceeds. Each share of Class A Preferred is convertible
     into one share of voting common stock and entitles the holder to dividends,
     at $.40 per share per annum. The holder has the right to convert after one
     year subject to Board approval. At March 31, 2006 and 2005, dividends in
     arrears amounted to approximately $298,000 and $119,000, respectively.

     In connection with this offering the company granted the placement agent
     5,000 Class A Warrants, exercisable for five years at an exercise price of
     $1.52 per share into common stock. The company also granted to these
     investors 2,500 Class A Warrants, exercisable for five years at an exercise
     price of $0.01 per share. Such warrants were treated as a cost of the
     offering. Also, the placement agent was granted 10,000 warrants for
     providing certain financial analysis for the company. The warrants are
     immediately exercisable at $.30 per share for five years. The warrant
     contains a cashless exercise feature. The company valued the warrant at
     $8,000 using the Black-Scholes option-pricing model and charged operations.
     On July 8, August 14 and September 11, 2003, the company issued 2,500,
     7,480 and 1,200 common shares respectively to the placement agent upon the
     exercise of warrants issued in connection with this offering.

     Liquidation Rights

     (i)  In the event of any liquidation, dissolution or winding up of the
          company, whether voluntary or involuntary, the holders of Class A
          Preferred Shares then outstanding are entitled to be paid out of the
          assets of the Company available for distribution to its shareholders,
          whether such assets are capital, surplus or earnings, before any
          payment or declaration and setting apart for payment of any amount in
          respect of any shares of any Junior Stock with respect to the payment
          of dividends or distribution of assets on liquidation, dissolution or
          winding up of the Company, all accumulated and unpaid dividends
          (including a prorated dividend from the last Dividend Accrual Date) in
          respect of any liquidation, dissolution or winding up consummated
          except that, notwithstanding the provisions of Section B(ii), all of
          such accumulated and unpaid dividends will be paid in Class A
          Preferred Shares at a rate of 1 Class A Preferred Share for each $4.00
          of dividends. No fractions of Class A Preferred Shares shall issue.
          The company shall pay cash in lieu of paying fractions of Class A
          Preferred Shares on a pro rata basis.

     (ii) The Class A Preferred Shares will be entitled to participate on a pro
          rata basis in any distribution of assets as may be made or paid on
          Junior Stock upon the liquidation, dissolution or winding up of the
          company.

     (iii) A consolidation or merger of the company with or into any other
          corporation or corporations or any other legal entity will not be
          deemed to constitute a liquidation, dissolution or winding up of the
          company as those terms are used in this Section C.

<PAGE>

                                       14


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY (CONTINUED)

[1]   CLASS A PREFERRED STOCK:  (CONTINUED)

     During 2005, the company sold 200,000 Class A Preferred for $800,000 and
     issued 62,500 common stock warrants with an exercise price of $.01 per
     share. Such warrants are convertible immediately and are exercisable for
     ten years.

     During the first quarter of 2005, the company sold 47,500 Class A Preferred
     to one investor for $190,000.

     During the first quarter of 2006, the company had sold 58,250 Class A
     Preferred to private investors for proceeds of $233,000. One investor also
     purchased 20,500 common stock warrants for a purchase price of $2,000. The
     warrants are exercisable at $1.00 per common share.

     On May 17, 2006 the company sold 25,000 Class A Preferred to private
     investor for proceeds of $100,000 and 25,000 common stock warrants with an
     exercise price of $.01 per share.

[2]  CLASS B PREFERRED STOCK:

     On October 21, 2004, the company authorized the sale of up to 300,000
     shares of its Class B Non-Voting Cumulative Convertible Preferred Stock
     ("Class B Preferred"). During 2004, the company sold 42,500 shares at $5.00
     per share of its Class B Preferred for $212,500. Each share of Class B
     Preferred is cumulative convertible into either one share of voting common
     stock of the company or one share of common stock of Iso-Torque Corporation
     under certain circumstances and entitles the holder to dividends, at $.50
     per share per annum. The holder has the right to convert after one year
     subject to Board approval. At March 31, 2006 and 2005, dividends in arrears
     amounted to approximately $33,000 and $8,000, respectively.

     (1) In the event of any liquidation, dissolution or winding up of the
     Corporation, whether voluntary or involuntary, the holders of Class B
     Preferred Shares then outstanding are entitled to be paid out of the assets
     of the Corporation available for distribution to its shareholders, whether
     such assets are capital, surplus or earnings, before any payment or
     declaration and setting apart for payment of any amount in respect of any
     shares of any Junior stock with respect to the payment of dividends or
     distribution of assets on liquidation, dissolution or winding up of the
     Corporation, all accumulated and unpaid dividends (including a prorated
     dividend from the last Dividend Accrual Date) in respect of any
     liquidation, dissolution or winding up consummated except that,
     notwithstanding the provisions of Section B(2), all of such accumulated and
     unpaid dividends will be paid in Class B Preferred Shares at a rate of 1
     Class B Preferred Share for each $5.00 of dividends. No fractions of Class
     B Preferred Shares shall be issued. The Corporation shall pay cash in lieu
     of paying fractions of Class B Preferred Shares on a pro rata basis.

     (2) The Class B Preferred Shares will be entitled to participate on a pro
     rata basis in any distribution of assets as may be made or paid on Junior
     Stock upon the liquidation, dissolution or winding up of the Corporation.
<PAGE>

                                       15


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY (CONTINUED)

[3]  BUSINESS CONSULTANT STOCK PLAN:

     For the quarter ended March 31, 2006 and 2005, the company issued 133,636
     and 194,920, respectively,  shares to business consultants under the Stock
     Plan. As of March 31, 2006, 916,223 shares are available for future
     issuances under the Stock Plan.

[4]  NONMANAGEMENT DIRECTORS PLAN:

     On October 1, 2004, the Board of Directors approved a Nonmanagement
     Directors Plan pursuant to which each nonmanagement director is entitled to
     receive, if certain conditions are met, on an annual basis for services
     rendered as a director, warrants to purchase 12,000 shares of the company's
     common stock at $.01 per share. In addition, the chairman of the audit
     committee is entitled to receive, on an annual basis for services rendered
     as chairman, additional warrants for 5,000 shares of the company's common
     stock at $.01 per share.

     At December 31, 2005, 88,250 warrants were issued and vested immediately.
     The company issued 44,000 warrants and recorded a charge of $113,000 to
     general and administrative expenses representing the excess of the fair
     market value and $.01 per share of such warrants in 2005. During 2005, two
     directors exercised 39,500 warrants granted to them under the Nonmanagement
     Directors Plan.

     For the quarter ended March 31, 2006 and 2005, the company granted 13,250
     and 10,250, respectively, warrants under the Nonmanagement Directors Plan.
     During the quarter ended March 31, 2006 and 2005, 15,000 and 12,000
     warrants were exercised, respectively.

<PAGE>

                                       16


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY (CONTINUED)

[5]  SHARES ISSUED FOR SERVICES AND RENT:

     During 1998, the company granted 1,000 shares of common stock, valued at
     $3.00 per share, for services provided. During 1997, the company granted
     12,000 and 2,000 shares of common stock for services provided. The company
     valued the shares at their fair value of $1.50 and $3.00 per share,
     respectively. During 2003 and 2002, 15,640 and 134,964 restricted shares
     were issued for services aggregating approximately $18,000 and $198,000,
     respectively. During 2005 and 2004, 100,000 and 35,000 restricted shares
     were issued for services and rent aggregating approximately $259,500 and
     $194,000, respectively. During the quarter ended March 31, 2006, no
     restricted shares were issued.

[6]  WARRANTS:

     As of March 31, 2006, outstanding warrants to acquire shares of the
     company's common stock are as follows:

<TABLE>
<CAPTION>
    Exercise                               Number of
     Price           Expiration         Shares Reserved
---------------  ------------------     ---------------
<S>              <C>                    <C>
$       1.52     September 18, 2007       5,000(Note F [2])
            (a)                    (a)  125,000(Note F [4])
$        .75     None                   500,000(b)
$        .01     None                   551,200(c)
$        .01     None                    71,250(d)
$        .01     None                    72,000(e)
$        .01     None                     9,000(f)
$       5.00     Ten Years              210,000(g)
$        .01     None                     6,000(h)
$1.00; $ .01     None                    51,750(j)
$        .01     None                     7,500(k)
$       1.00     None                    20,500(l)
</TABLE>

(a)  Exercisable at IPO price and exercisable five years from IPO.

(b)  On April 15, 2002, the company issued 1,000,000 warrants to purchase common
     stock at prices ranging from $.30 to $.75 to its then chairman of the board
     of directors and chief executive officer. Of the total warrants, 250,000
     were exercisable at $.30, and 250,000 were exercisable at $.50 on the date
     the then board elected the executive to the board and named the chief
     executive officer. During the year ended December 31, 2002, 250,000
     warrants were exercised for $.30 per share, resulting in proceeds of
     $75,000. During the year ended December 31, 2003, 250,000 warrants were
     exercised for $.50 per share, resulting in proceeds of $125,000. The
     remaining 500,000 warrants are exercisable upon the execution of the
     company of a binding agreement for the sale, transfer, license or
     assignment for value of any and/or all of its company's technology at $.75
     per share. The company will record a charge representing the fair value of
     the warrants when the warrants become exercisable.

(c)  The company has issued 1,080,000 warrants, exercisable at $.01 per share,
     528,800 warrants were exercised for proceeds of aggregate $5,484 in
     accordance with purported agreements with a management consulting firm.
     (see Note F) Subsequent to March 31, 2006, as more fully described in Note
     I, the company issued an additional 245,000 warrants to the management
     consulting firm.

<PAGE>

                                       17


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY (CONTINUED)

(d)  For the quarter ended March 31, 2006, the company issued 3,000 warrants
     to each of four nonmanagement directors under the Nonmanagement Directors
     Stock Plan and 1,250 warrants to its audit committee chairman for services
     rendered to the Board and to the committee. The exercise price is $.01 per
     share with no expiration date. (see Note F [8]) During the quarter ended
     March 31, 2006, 15,000 warrants were exercised.

(e)  The company issued 120,000 warrants to a consultant, exercisable at .01 per
     share, 48,000 warrants were exercised in 2005. None were exercised for the
     quarter ended March 31, 2006.

(f)  In June 2005, the company issued 12,000 warrants to a consultant,
     exercisable at .01 per share, 3,000 warrants have been exercised through
     March 31, 2006.

(g)  During 2005, the company issued 210,000 warrants to consultants,
     exercisable at $5.00 per share. The warrants carry a ten year term. None
     have been exercised through March 31, 2006.

(h)  During 2005, the company issued 6,000 warrants to a consultant, exercisable
     at .01 per share. None have been exercised through March 31, 2006.

(i)  The company issued 25,000 warrants exercisable to each of two investors
     along with the purchase of 50,000 shares of Preferred Class A stock, at .01
     per share. All 50,000 warrants were exercised in 2005.

(j)  During 2005, the company issued 12,500 common stock warrants to an investor
     in connection with his purchase of 12,500 Class A Preferred. During the
     quarter ended March 31, 2006, the company issued 39,250 common stock
     warrants to investors along with their purchase of 38,250 shares of Class A
     Preferred.

(k)  During the quarter ended March 31, 2006, the company issued 7,500 common
     stock warrants, exercisable at $.01 per share for financial advice rendered
     by a consultant.

(l)  During the quarter ended March 31, 2006, one investor purchased 20,500
     common stock warrants exercisable at $1.00 per share for a purchase price
     of $2,000.

[7]  ISSUANCE OF STOCK AND WARRANTS BY SUBSIDIARY:

     During the quarters ended June 30, and September 30, 2003, the company's
     subsidiary Ice, issued 308,041 shares of its common stock at $.76 per share
     realizing aggregate proceeds of $234,000 in a private placement. These
     issuances reduced the company's interest in the subsidiary from 72% to
     approximately 69.26%. Based on the company's accounting policy, the change
     in the company's proportionate share of Ice's equity resulting from the
     additional equity raised by the subsidiary is accounted for as a capital
     transaction and has been reflected as an increase in stockholders' equity.
     Pursuant to Ice's private placement the company, has reserved the right but
     not the obligation, for a period not to exceed 30 months from June 9, 2003
     or any subsequent offering of Ice stock, to purchase all of the capital
     stock of Ice (including shares to be issued upon exercise of outstanding
     warrants of Ice) at a purchase price equal to the greater of $3.00 per
     share or the appraised value of Ice with such appraised value capped at
     $6.00 per share.

     In connection with the private placement, Ice issued 53,948 warrants to the
     placement agent exercisable at $.76 per share through June 9, 2008. In
     addition, 50,000 warrants were issued by Ice to a consultant exercisable at
     $.76 per common share through June 9, 2008. In connection therewith a fair
     value compensation charge of $36,000 was recognized.

<PAGE>

                                       18


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE F - STOCKHOLDERS' EQUITY (CONTINUED)

[8]  SHARES ISSUED FOR FUTURE CONSULTING SERVICES

     On September 17, 2005, certain consultants created a trust to enable them
     to sell business consultants shares issued to them by the company under
     their consultant agreements. The company issued 50,000 business consultant
     shares valued at $103,000 to such consultants on September 27, 2005,
     contingent on their performance of future services under such consultant
     agreements. Such services were rendered and the trustee distributed to the
     consultants the proceeds of sales of such shares directly to the
     consultants. During the first quarter March 31, 2006, the trustee sold
     39,470 shares for $56,000 from the trust to satisfy obligations to
     consultants. On April 18, 2006, the company issued another 50,000 business
     consultant shares valued at $82,500 to such consultants, contingent on
     their future performance of services under such consultant agreements. The
     company's payment obligations with respect to the consultant agreements are
     met once it has issued shares to the trust in accordance with directives
     received from the consultants and the consultants, not the company, bear
     the risk of loss in the event the proceeds of stock sales by the trustee
     are less than the value of the stock contributed to the trust by the
     company on the date of contribution.

NOTE G - COMMITMENTS AND OTHER MATTERS

[1]  EMPLOYMENT AGREEMENTS

     On June 30, 2005, the company entered into a non-exclusive two year
     consulting agreement for engineering design services. Under the terms of
     the consulting agreement, the company will issue annually 12,000 fully and
     immediately vested $.01 warrants exercisable into common stock of the
     company, payable on a quarterly basis. In addition, the company granted
     100,000 stock options under its 1998 Stock Option Plan to acquire shares of
     its common stock to its engineering design consultant during the three
     months ended June 30, 2005. The option vests immediately and has a term of
     ten years. The exercise price for the option is $5.00 per share. The
     company valued the options at $247,000 using the Black-Scholes
     option/pricing model and charged operations. This agreement was terminated
     in the third quarter of 2005.

     During 2005, the company entered into non-exclusive two year consulting
     agreements with various consultants. Under the terms of the consulting
     agreements, the company will issue payment to be made in cash, business
     consultants stock or a combination hereof, in the company's sole
     discretion. The consultants were issued $5.00 warrants exercisable into $
     .01 par value common stock of the company. Such warrants are fully vested,
     exercisable immediately and have a ten year term. The company issued
     210,000 warrants in 2005 and valued the warrants at $377,000 using the
     Black-Scholes option/pricing model and charged operations.

[2]  VARIABLE GEAR, LLC

     On January 1, 2008, the company is required to purchase the 51% membership
     interest it does not own in Variable Gear LLC at the then fair market value
     as defined. The company does not share in any profit or losses in this
     entity. At March 31, 2006 such fair market value cannot yet be reasonably
     estimated.

<PAGE>

                                       19


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE G - COMMITMENTS AND OTHER MATTERS (CONTINUED)

[3]  LEASES:

     The company has leased premises for use as its executive offices. The lease
     is for a period of 3 years, commencing July 1, 2004 expiring on June 30,
     2007 with monthly rental payments of approximately $2,200. The company is
     also responsible for its share of real estate taxes, certain maintenance
     and repair costs, and increases in utility costs associated with the
     premises.

     On August 1, 2004, the company sublet, as a tenant, a portion of a facility
     for a term of six months at a rental rate of $600 per month. On December
     31, 2004, the company purchased from the previous owner certain assets for
     approximately $68,000 and assumed the lease of the underlying tenant for
     the entire premises. The lease term expires on February 28, 2007 with a
     monthly rental payments of $2,100. Rent expense for the year ended December
     31, 2005 was approximately $311,000.

     On March 1, 2005 the company entered into a one year lease with a
     shareholder pursuant to which the company rents an office, conference room,
     shop and manufacturing facility. The company is also furnished with the
     services of three engineers and two machine operators at the facility. The
     company is obligated to pay 10,000 shares of its common stock on a monthly
     basis for the facility and services. This lease was not renewed.

NOTE H - MANAGEMENT AGREEMENT

On February 20, 2004 the company entered into an agreement with a
management-consulting firm to develop and execute a business plan to
commercialize its full terrain vehicle. Upon execution of the agreement, the
company granted 15,306 shares of common stock in settlement of $75,000 owed upon
execution of the agreement. Pursuant to the February 20th agreement, the company
issued 28,792 common shares in monthly fees and granted 620,000 warrants, of
which 153,600 were exercised during the third quarter of 2004 and none were
exercised during the third quarter of 2005. The February 20th agreement was
terminated with respect to all its terms and supposed to be replaced with a new
agreement effective June 30, 2004 with the same management consulting firm by
which the management of the company was taken over by the management consulting
firm which furnished individuals to serve as the company's chief executive
officer, chief financial officer and chairman of its board of directors. The
June 30th agreement was for an initial term of 24 months and could be renewed
for an additional 24 month periods unless either party provides notice to the
other at least sixty days prior to the end of the term. With one significant
exception, the June 30th agreement was supposed to provide compensation terms
similar to those contained in the February 20th agreement. As under the February
20th agreement, the company paid the management consulting firm $50,000, plus
20,000 warrants exercisable at $.01 per share on a monthly basis. In lieu of
such payment, upon the happening of a revenue producing event, the company will
grant 40,000 warrants per month, exercisable at $.01 per share. Pursuant to the
purported June 30th agreement, the company granted 200,000 warrants on August
20, 2004 and recorded a charge of $1,191,000 in connection with the issuance of
the warrant.

<PAGE>

                                       20


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE H - MANAGEMENT AGREEMENT (CONTINUED)

The purported June 30th agreement provided for additional success and other fees
payable in warrants. In connection therewith, the company may recognize
significant charges in the future if and when such events occur.

Under the February 20th agreement, the company was obligated to grant warrants
exercisable at $.01 per share based upon a formula if the closing bid price of
the company's common stock was equal to or greater than $5.00 per share ("equity
incentive provision"). In connection with this obligation the company granted
500,000 warrants with a fair value of $2,972,000 during the first quarter of
fiscal 2004 as a result of the stock price exceeding $5.00 per share. The
company recorded a charge of $444,000 respectively for these warrants for the
year ended December 31, 2005.

At its meeting held June 9, 2004, at which meeting approval of the June 30, 2004
agreement was supposed to be given, the Board of Directors specifically
considered and rejected the equity incentive provision and, in lieu thereof,
voted to increase the consulting firm's success fee from 3% to 8%. Thus, the
June 30, 2004 agreement, as approved by the Board, was not to contain the
"equity incentive provision." On August 11, 2004, the Board approved the minutes
of the June 9, 2004 meeting reflecting its rejection of the equity incentive
provision without objection.

On April 12, 2005 the Board voted to terminate the June 30th agreement, which it
believed did not contain any equity incentive provision, at the request of the
management consulting firm due to its internal reorganization. The Board
approved a new agreement with the reorganized consulting firm, conditioned upon
such consulting firm's representation that no material change would be made to
the June 30th agreement as such agreement had been approved by the Board on June
9, 2004. That is, the Board's understanding was that the purported April 12
agreement, like the purported June 30 agreement, did not contain any equity
incentive provision.

Upon its creation on July 8, 2005 the Executive Committee of the Board of
Directors reviewed both the June 30th and April 12th agreements in connection
with its examination of the relationship between the company and the consulting
firm. The text of the agreements reviewed by the Committee was as set forth in
the copies of the agreements filed with the Securities and Exchange Commission
as exhibits to certain of the company's periodic reports. The Committee
discovered that, despite Board rejection of the equity incentive provision, both
agreements, as filed, contained such provision and as filed, were filed in error
since such agreements had not been approved by the Board.

Based upon its comprehensive analysis of the circumstances surrounding the
negotiation and execution of the June 30th and April 12th agreements, including
the contents of a report furnished to it by an independent special counsel
engaged by it, the Committee concluded that the Board of Directors had never
approved either agreement as filed. Consequently, after consultation with
independent special counsel, the Executive Committee has concluded that the
agreements are null and void from inception and is withdrawing the June 30th and
April 12th agreements from the exhibits deemed filed with the Commission as part
of this report.

<PAGE>

                                       21


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE I - LITIGATION

On September 30, 2005, the company filed a declaratory judgment action in the
Supreme Court of the State of New York for the Seventh Judicial District seeking
that Court's determination that the company's agreements with the management
consulting firm were null and void and unenforceable as against the company, its
officers and directors.

On February 1, 2006, the company moved for an order granting summary judgment in
favor of the company and for such other and further relief as the Court deems
just and proper. The company's motion is based upon its contention that specific
provisions of the purported April 12, 2005 agreement are illegal and void as a
matter of law and that since the illegal provisions are central to the purported
agreement's main purpose, such provisions in the absence of a "severability"
provision, vitiates the entire document. The provisions in question require that
James and Keith Gleasman, as directors and majority shareholders of the company,
vote their shares to perpetuate members of the managing firm as directors and
officers of the company. Other provisions require Messrs. Gleasman to indemnify
members the managing firm from liability for their conduct. The company's motion
was also based upon its view that the enforcement of the purported agreement
would result in unjust enrichment since the company believes that the management
consulting firm has not provided the services called for under the agreements
and that the firm has already been paid far more than the value of the services
actually rendered to it by such firm. In addition, the members of the firm have
performed no services for the company since July, 2005 and no longer serve the
company as officers or directors, or in any other capacities. The enforcement of
the purported agreements would only compel the company and its shareholders to
pay the management consulting firm substantial sums for inadequate performance.

On April 27, 2006, the Court dismissed the company's summary judgment motion as
to the illegality of the agreements and, in addition, granted the management
consulting firm's motion for summary judgment as to a limited number of
counterclaims brought against the company solely with respect to the February
agreement. On May 8, 2006, the Court entered a judgment and order directing the
company to honor the exercise of two warrants (under both the February and June
agreements) which had previously presented to the company for an aggregate
40,000 common shares and, in addition, grant a warrant to the management
consulting firm for 245,000 common shares earned under the contested equity
incentive provision, exercisable at $.01 per share. The Court also ordered the
company to honor the approximately 511,200 additional warrants previously
granted to the firm under the contested June and April agreements.

The company's litigation counsel believe the Court has committed reversible
error and such counsel, on May 9, 2006, filed a notice of appeal with respect to
the Court's decision, judgment and order with the Appellate Division of the New
York Supreme Court, Fourth Department. In addition, on May 15, 2006, litigation
counsel filed a motion for readjustment or renewal with the trial Court on the
basis that such Court had overlooked significant facts supporting the company's
position and completely misstated certain facts in a manner to sustain
defendants position. The motion is also based upon counsels view that the trial
Court misapplied well settled legal principles in granting defendants summary
judgment motions.

Compliance with the Court's order has required the issuance of common stock and
the grant of warrants. Compliance with future adverse orders, if any, rendered
by the Court similarly would require the issuance of common stock.

The company has given due notice to the management consulting firm that, even if
the agreements were to be upheld in their entirety, they terminate in accordance
with their terms as of June 30, 2006.

<PAGE>

                                       22


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

Notes to Condensed Consolidated Financial Statements
March 31, 2006

NOTE J - SUBSEQUENT EVENT

On April 18, 2006, the company issued 50,000 business consultant shares valued
at $82,500 to such consultants, contingent on their future performance of
services under such consultant agreements. The company's payment obligations
with respect to the consultant agreements are met once it has issued shares to
the trust in accordance with directives received from the consultants and the
consultants, not the company, bear the risk of loss in the event the proceeds of
stock sales by the trustee are less than the value of the stock contributed to
the trust by the company on the date of contribution.

On May 17, 2006 the company sold 25,000 Class A Preferred to private investor
for proceeds of $100,000 and 25,000 common stock warrants with an exercise price
of $.01 per share.

<PAGE>

                                       23


TORVEC, INC. AND SUBSIDIARIES
(a development stage company)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

                                PLAN OF OPERATION

(a)  Overall Business Strategy

          The company's overall business strategy relating to the
          commercialization of its technologies continues to be:

               -    to license or sell any one or all of its technologies (i.e.
                    the infinitely variable transmissions, the hydraulic
                    pump/motor system, the Iso-Torque(TM) differential, the
                    spherical gearing constant velocity joint mechanism, the ice
                    technology) in order to provide the capital management
                    believes is necessary to successfully implement its stated
                    goal to manufacture and market its FTV(TM) worldwide,
                    especially in the Asian, African, South and Central
                    American, and Eastern European markets.

          The company's plan of operation relative to its automotive inventions
          during fiscal 2006 is:

               -    to continue the ongoing real world testing of our modular,
                    hydromechanical infinitely variable transmission in both our
                    GM Tahoe and a diesel-powered vehicle and to showcase the
                    performance of such transmission to the worldwide automotive
                    industry, local, regional and national governments and to
                    private sector vehicle end-users, such as the U.S. military,
                    companies with large truck fleets and school bus companies;

               -    to continue demonstrating the Iso-Torque differential both
                    in the Nissan 350-Z as well in as other,
                    strategically-targeted vehicles to the worldwide auto
                    industry, local, regional and national governments and to
                    private sector end-users, such as the U.S. military,
                    companies with large truck fleets and school bus companies;

               -    to continue demonstrating the Full Terrain Vehicle (FTV) to
                    the worldwide auto industry, local, regional and national
                    governments and to private sector end users, such as the
                    U.S. military;

               -    to continue ongoing discussions with such governments and
                    private sector end-users as well as with automotive
                    manufacturers and 1st-Tier suppliers worldwide in order to
                    consummate one or more joint venture or other business
                    combinations that would lead to the commercialization of the
                    company's products;

               -    to continue ongoing discussions with glass manufacturers
                    regarding the joint development and commercialization of the
                    ice technology with a view to the license or sale of such
                    technology;

               -    to continue to improve the company's inventions and, where
                    appropriate, to obtain patent protection on such new
                    improvements.

<PAGE>

                                       24


     Information regarding the company and all of its inventions, including
regular updates on technological and business developments, can be found on the
company's website, www.torvec.com.

     The company's ice technology is held through its majority-owned subsidiary,
Ice Surface Development, Inc. Our subsidiary has made significant progress in
identifying three distinct methods for de-icing -- electrolysis, high frequency
and pulse. It is currently seeking a joint venture development, glass
manufacturer to finalize the development of the technology and bring it to
commercialization.

     The company's ice technology is licensed under an agreement with Dartmouth
College, which provides for a royalty of 3.5% based on the value of net sales of
licensed product with minimum annual payments of $10,000 for the first two
years, $15,000 for the third year and $25,000 per year thereafter. In addition,
the agreement provides for the payment of 50% of sub-license fee income.

(b)  Current Status of Product Development

     Based upon our experience and research to date, we believe the following
inventions will eventually become commercially viable:

     -    the FTV(TM), including the steering drive and suspension for tracked
          vehicles;

     -    the Iso-Torque(TM) differential;

     -    our infinitely variable transmissions;

     -    the hydraulic pump and motor;

     -    spherical gearing constant velocity mechanism;

     -    the ice technology.

These inventions are in the following stages of development:

-    The Iso-Torque(TM) differential - patent protection for this invention was
     issued July 8, 2004. Through our wholly-owned subsidiary, Iso-Torque
     Corporation, we built a prototype Iso-Torque differential and have been
     demonstrating these differentials to government and private sector visitors
     at our development facility and under real-world driving conditions. The
     successful testing and showcasing of the Iso-Torque differential has lead
     management to focus upon the strategy the company is employing to market
     and commercialize the Iso-Torque differential. A significant aspect of this
     strategy is highway safety.

     All differentials manufactured by the company's competitors are plagued by
     a fundamental flaw in the physics governing differentials --- a flaw which
     creates an imbalance of traction when one drive wheel is on dry pavement
     and the other is on loose gravel, grass, snow, ice or other slippery
     surface. Similarly, an imbalance of traction occurs when a vehicle is going
     around a sharp corner with less traction on the outside wheels.

     Management believes that the Iso-Torque differential dramatically solves
     the imbalance of traction problem characteristic of all other
     differentials. The Iso-Torque differential maintains proportionately
     balanced torque going to the drive wheels, at all times and under any and
     all conditions. The company has retained the services of Mr. Gary Eldlin to
     educate the auto insurance industry, the American Automobile Association,
     the National Safety Council and similar organizations with respect to the
     extraordinary safety implications of the Iso-Torque differential.

<PAGE>

                                       25


     During the quarter ended March 31, 2006, the Iso-Torque differential was
     tested in the race cars of a Nissan senior racing team at its facilities in
     California. The tests were very successful and the racing team has
     requested the company to provide additional Iso-Torque differentials for
     installation in its racing cars for the 2006 racing season.

     The full terrain vehicle (FTV) requires at least two Iso-Torque
     differentials and the company plans to incorporate the sale of Iso-Torque
     differentials in any strategic alliance or other business relationship
     involving the sale or other transaction incorporating our FTV technology.

-    The infinitely variable transmission - the company has developed three
     infinitely variable transmissions for diesel and gasoline engines, namely,
     the hydromechanical configured for the Dodge Ram diesel (2003), the all
     hydraulic for gasoline engines (2004) and the modular, hydromechanical for
     both gasoline as well as diesel engines.

     Essentially, we believe we have created transmissions for very different
     market applications.

     The all-hydraulic transmission has approximately 170 total parts, of which
     25 are separately manufactured parts (excluding nuts, bolts, screws and the
     like). This contrasts with an average of over 700 parts for an automatic
     transmission, the majority of which have to be separately manufactured. We
     believe our all-hydraulic transmission has solved the major problems of
     weight, size, noise, heat and lack of start-up ability at low revolutions
     per minute (rpm), all of which have heretofore prevented the development of
     a hydraulic transmission for automotive use.

     We believe that our all-hydraulic transmission, functioning as a stand
     alone transmission, is ideal for use in subcompact, compact and mid-sized
     cares where, according to the May 9, 2005 issue of Business Week, "Why GM's
     Plan Won't Work," the auto companies' profit margin is most narrow. We
     believe the market for the all-hydraulic transmission may very well be the
     rapidly emerging, but highly competitive Third World markets like China
     where cost reduction is essential, roads are difficult to traverse, city
     driving is generally congested and vehicle speeds are reduced.

     While the company's unique pumps and motors can function as a stand alone
     transmission, they also form the core of the company's infinitely variable,
     hydromechanical transmission. Our hydromechanical transmission operates
     both on our unique pumps and motors and on gears. The addition of a gear
     pack to the hydraulic transmission enables our transmission to operate
     under the greater torque (power) requirements demanded by SUVs, Hummers,
     trucks and buses, and is the ideal transmission for these types of
     vehicles.

     The combination of our hydraulic and hydromechanical transmissions
     constitutes the company's modular, hydromechanical transmission for which
     the company has recently filed for patent protection.

<PAGE>

                                       26


     The company believes that all its transmissions --- all hydraulic,
     hydromechanical and modular ---perform better than an automatic
     transmission for a number of reasons, including:

               -    No vehicle creep - we have all experienced sitting at a red
                    light and our foot comes off the brake. The vehicle creeps
                    forward or rolls backward which, if unanticipated, can be
                    extremely dangerous. We are confident that our transmissions
                    eliminate vehicle creep, whether forward or backward;

               -    Increased vehicle control - our transmissions enable a
                    driver to dramatically control vehicle speed, reducing
                    speeds to less than one-half mph ( i.e. approximately 16 ft.
                    per minute ), thus providing greater safety in inclement
                    weather, less fuel usage in traffic jams, greater control
                    and flexibility to maneuver through parking lots and narrow
                    streets (e.g. those in Eastern Europe and Asia), as well as
                    greater maneuverability on rough terrain and poor road
                    conditions;

               -    Greater mpg during rapid acceleration - a considerable
                    portion of typical city and suburban driving involves
                    "rapid" acceleration, that is, acceleration from zero to 30
                    mph at a rate exceeding 6 mph per second. In side-by-side
                    testing of the hydraulic transmission against a Tahoe's
                    automatic transmission in the zero to 30 mph acceleration
                    range, our test results indicated that the automatic
                    transmission used 100% more fuel than our transmission;

               -    Increased fuel economy - in response to inquiries made by
                    several auto companies, we have compared our transmission in
                    side-by-side tests under simulated city driving scenarios as
                    well as side-by-side comparisons utilizing the
                    EPA-sanctioned New York City cycle test. Over the course of
                    all of these tests, our transmission consistently achieved
                    an average of 4.33% improvement in fuel efficiency over the
                    Tahoe automatic.

               -    Greater operating efficiencies/durability - durability and
                    efficiency are directly related (i.e. the more efficient a
                    device is, the more durable it will also be under test
                    conditions). Heat generated is an extremely accurate measure
                    of efficiency. Our all hydraulic transmission operates in a
                    temperature range of 90 to 160 degrees ( the higher
                    temperature reflects high loads and more difficult driving
                    conditions), with a general operating temperature of
                    approximately 140 degrees. There is no oil cooler (radiator)
                    required, and the entire system utilizes only 6 quarts of
                    oil. In its operating range, our pump is 92% efficient and
                    the motor is 92% efficient, reflecting an overall operating
                    efficiency of 85% (92%x92%). These efficiencies are
                    validated by our operating temperatures. A further
                    confirmation of our transmission's efficiency is greater
                    fuel mileage during acceleration as previously described.
<PAGE>

                                       27


     During 2005, we installed our modular, hydromechanical, infinitely variable
     transmission in the Tahoe. Preliminary findings from tests designed to
     measure the engine's revolutions per minute (rpm) conducted under a "full
     load" (full vehicle weight, 5575 lbs., load resistance on our dynamometer)
     with the transmission accelerating through 15, 30, 45 and 60 miles per hour
     (mph) demonstrate that our modular, hydromechanical transmission reduces
     engine rpm dramatically in comparison to the stock, automatic transmission
     originally installed in the SUV.

     At 15 mph, the engine rpm with the IVT was 600; at 30mph, the rpm was 700;
     at 45, the rpm was 1100 and at 60 mph, the rpm was 1400. In addition, the
     engine rpm increases in a steady progression as opposed to the rapid rise
     and fall characteristic of the automatic as it shifts gears. At "steady
     state" operation, the engine rpm with the IVT averaged 728 at 30 mph as
     against 1160 rpm with the automatic and at "steady state" operation at
     50mph, the engine rpm with our transmission averaged 1216 as against 1500
     rpm with the automatic.

     We also believe our modular hydromechanical transmission will generate
     impressive fuel savings. To this point, preliminary data gathered from
     repeatable tests are very positive:

     Test Vehicle:
     GM Tahoe 2004
     5.3L V8 295 HP
     5575 lbs.
     4-speed automatic
     3.73 rear axle ratio
     Test runs on IVT 12-27-05
     3785 ccm per U.S. gallon

     5 min long steady state at 15 mph, 30 mph, 50 mph
     Torvec IVT vs. 4-speed Automatic Tahoe

<TABLE>
<CAPTION>
                                      Avg. Fuel      IVT %
          Avg. Eng RPM    Avg. MPH      Usage     improvement      MPG
          ------------   ---------   ----------   -----------   ---------
<S>       <C>            <C>         <C>          <C>           <C>
IVT       437 RPM        15 MPH      44.5 ccm                   21.26 mpg
4-speed   1089 RPM       15 MPH      62.03 ccm       28.26%     15.25 mpg
IVT       718 RPM        30 MPH      82.32 ccm                  22.98 mpg
4-speed   1175 RPM       29.55 MPH   111.85 ccm       26.4%     16.66 mpg
IVT       1178 RPM       49 MPH      166.3 ccm                  18.58 mpg
4-speed   1504.9 RPM     50.1 MPH    183.17 ccm       9.20%     17.25 mpg
</TABLE>

While these findings are preliminary, they were generated by accurate,
repeatable tests and management is confident that these results will be
confirmed through more exhaustive testing. To this end, we have upgraded our
computer software program to maximize the performance of our modular
hydromechanical transmission so that we can successfully complete both the old
and new EPA sanctioned city and highway tests as well as successfully perform
real world driving scenarios.

When we have completed our testing with our hydromechanical transmission in the
SUV, we will install it in a diesel fueled vehicle and conduct similar tests
with this vehicle.

<PAGE>

                                       28


On June 29, 2000, the company announced that it had granted an exclusive,
world-wide license of all its automotive technology to Variable Gear, LLC for
the aeronautical and marine markets. Variable Gear will pay the company 4%
royalties for 7 years after which the company is obligated to repurchase the
license. Variable Gear is owned 51% by an individual who is also a company
shareholder. The company owns the remaining 49%. The company does not share in
any profit or losses in this entity. Variable Gear to date has not commenced
operations or sublicensed our automotive technology in its markets. In the light
of such inactivity, the company is in discussions with the shareholder with a
view to modifying and/or terminating the agreement.

Subsequent Event

On May 5, 2006, the company presented a detailed proposal on how its
technologies can benefit New York State to various New York State governmental
officials as well as to representatives of the Greater Rochester Enterprise, a
privately-funded organization devoted to encouraging entrepreneurship in upstate
New York. This proposal is set forth as Exhibit 99.1 to this Quarterly Report.

(c) Status of Certain, Publicly Announced Negotiations

     In April, 2005, Shanghai Automotive Industry Group (SAIC), China's largest
auto manufacturer, sent its Senior Engineer in charge of New Business
Development to visit the company's development facility. After this visit,
discussions continued and in June, 2005, SAIC invited the company to send a
delegation to Shanghai, China in order to explore more in depth possibilities
for a strategic alliance, joint venture opportunities and/or other business
transaction between the company, SAIC and/or one or more of SAIC's 70
subsidiaries.

     On July 22, 2005, Peng Pu Machine Building Plant Co., Ltd., a SAIC
subsidiary, announced that it was engaged with the company in discussions
concerning the company's Full Terrain Vehicle (FTV).

     In December, 2005, SAIC again visited the company's facilities, spending
several days driving our products, accumulating test data and gathering
information. Discussions were held on potential opportunities. A high-level
delegation from SAIC/Peng Pu visited the company's facilities in mid-May, 2006
to thoroughly review the status of the company's products and to discuss the
outlines of a future business combination between the companies.

     At the same time, the company continues to be engaged in discussions with
other private sector companies as well as governmental entities regarding
potential transactions involving all of its products.

(d) Company Expenses

     The net loss for the quarter ended March 31, 2006 was $861,000 as compared
to the quarter ended March 31, 2005 net loss of $1,428,000. The decrease in the
net loss of $567,000 is principally related to decreases in general and
administrative expense.

     Research and development expenses for the quarter ended March 31, 2006
amounted to $397,000 as compared to $501,000 for the quarter ended March 31,
2005. This decrease amounted to $104,000. This decrease is attributable to
decreased costs associated with commercializing our technologies.

     General and administrative expenses for the quarter ended March 31, 2006
amounted to $472,000 as compared to $996,000 for the quarter ended March 31,
2005. This decrease amounted to $524,000 and is principally due to a reduction
of costs resulting from our termination of a management consulting firm.

<PAGE>

                                       29


(e) Liquidity And Capital Resources

     The company's business activities during its fiscal quarter ended March 31,
2006 were funded principally through the sale of 58,250 shares of Class A
Preferred to a number of existing shareholders for aggregate proceeds of
$233,000. One investor also purchased 20,500 common stock warrants for a
purchase price of $2,000. The warrants are exercisable at $1.00 per common
share.

     During the fiscal quarter ended March 31, 2006, the company issued 133,636
shares to business consultants under its Business Consultants Stock Plan in
exchange for ongoing corporate legal services, internal accounting services,
business advisory services as well as legal fees and associated expenses for
ongoing patent work and litigation. As of March 31, 2006 there are 916,223
shares available for future grants under the plan.

     James and Keith Gleasman have developed a working arrangement with the
company that assures the company with continued access to the Gleasmans'
expertise without unduly burdening the company's financial statements with the
continuing expense of consulting fees. Under this arrangement, James and Keith
Gleasman will continue to provide consulting services and assign new patents,
existing patent improvements and all know-how in connection with all their
inventions to the company. In addition, Keith Gleasman will continue to serve as
president and as a director and James Gleasman will continue to serve as chief
executive officer, interim chief financial officer and as a director.

     For calendar 2006, each of the Gleasmans from time to time intends to sell,
from his own personal holdings of Torvec, an average of approximately 500 common
shares at prevailing market prices at the time of sale. The total number of
shares sold under this plan, if shares were sold on a daily basis throughout the
year, represents approximately 3% of the current Gleasman family holdings. No
shares were sold by the Gleasmans under this plan for the fiscal year 2006
through May 10, 2006.

     At March 31, 2006, the company's cash position was $75,000, and the company
had a working capital deficiency of $1,579,000. The company's cash position at
anytime during the fiscal quarter ended March 31, 2006 was directly dependent
upon its success in selling Class A Preferred since the company did not generate
any revenues. The company believes that current, ongoing discussions with
governmental and private sector companies worldwide could very well create a
revenue producing event during fiscal, 2006. However, it can not predict when
such a transaction will be consummated and therefore, the company does not know
whether it will generate revenues from its business activities during fiscal,
2006. On April 11, 2006, the company had secured a funding commitment from a
stockholder and officer to fund operations, of approximately $360,000 through
December 31, 2006.

     At March 31, 2006, the company had accounts payable and accrued expenses of
$1,705,000.

     The company has an obligation to repurchase 51% of Variable Gear, LLC on
January 1, 2008. The purchase price is equal to 51% of the then value of
Variable Gear as determined by an independent appraiser selected by the parties.
This liability can not be estimated at this time. We believe that a combination
of cash flows from operations, financing and strategic alliances will produce
sufficient cash flow to fund this obligation. The company is also exploring
alternatives with Variable Gear, LLC to relieve the company of this obligation.

<PAGE>

                                       30


(f) Critical Accounting Policies

Stock Based Compensation

     Effective January 1, 2006, the company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123R, "Share Based Payment." The company
elected to use the modified prospective transition method, therefore, prior
period results were not restated. Prior to the adoption of SFAS 123R,
stock-based compensation expense related to stock options was not recognized in
the results of operations if the exercise price was at least equal to the market
price of the common stock on the grant date, in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees". As
a result, the recognition of stock-based compensation expense was generally
limited to the expense attributed to restricted stock unit awards and stock
option modifications. The adoption of SFAS 123R did not have a material effect
on the company's financial statements.

     As of March 31, 2006, there was no remaining unrecognized stock
compensation related to unvested awards (net of estimated forfeitures).

Revenue Recognition

     Revenue in connection with the granting of the license to Variable Gear,
LLC is to be recognized when all conditions for earning such fee is complete.
Generally, revenue is only recorded when no future performance is required
related to the item.

Impairment of Long-Lived Assets

     The Company has adopted SFAS No. 144, "Accounting for the Impairment of
Disposal of Long-Lived Assets." Accordingly, whenever events or circumstances
indicate that the carrying amount of an asset may not be recoverable, management
assesses the recoverability of the assets.

(h) Impact of Inflation

     Inflation has not had a significant impact on the company's operations to
date and management is currently unable to determine the extent inflation may
impact the company's operations during its fiscal quarter ending March 31, 2006.

(i) Quarterly Fluctuations

     As of March 31, 2006, the company had not engaged in revenue producing
operations. Once the company actually commences significant revenue producing
operations, the company's operating results may fluctuate significantly from
period to period as a result of a variety of factors, including purchasing
patterns of consumers, the length of the company's sales cycle to key customers
and distributors, the timing of the introduction of new products and product
enhancements by the company and its competitors, technological factors,
variations in sales by product and distribution channel, product returns, and
competitive pricing. Consequently, once the company actually commences
significant revenue producing operations, the company's product revenues may
vary significantly by quarter and the company's operating results may experience
significant fluctuations.

<PAGE>

                                       31


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

At March 31, 2006, the company does not engage in investment activities and has
no material, outstanding indebtedness that would subject it to commodity price,
equity price and/or interest rate market risk. The company does not engage in
activities that would subject it to foreign currency exchange rate risk.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements that are based on current
expectations, estimates, and projections about the industries in which the
company operates, as well as management's beliefs and assumptions. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties, and assumptions ("Future
Factors") that are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such
forward-looking statements. The company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise.

The Future Factors that may affect the operations, performance, and results of
the company's business include the following:

     a.   the company's ability to raise significant capital to fund its plan of
          operation;

     b.   the company's ability to sell and/or commercialize one or more of its
          technologies, and/or to enter into collaborative joint working
          arrangements, formal joint venture arrangements with domestic and/or
          foreign governments, automotive industry manufacturers and suppliers
          to manufacture and promote the company's inventions;

     c.   industry and consumer acceptance of the company's inventions;

     d.   the level of competition and resistance to the company's inventions in
          the automotive and related industries;

     e.   general economic and competitive conditions in the markets and
          countries in which the company will operate, and the risks inherent in
          any future international operations;

     f.   the strength of the U.S. dollar against currencies of other countries
          where the company may operate, as well as cross-currencies between the
          company's future operations outside of the U.S. and other countries
          with whom it transacts business.

     g.   changes in business, political and economic conditions and the threat
          of future terrorist activity in the U.S. and other parts of the world
          and related military action.

<PAGE>

                                       32


ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed by the company in reports it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized, and reported on a timely basis and that such information
is accumulated and communicated to management, including the chief executive
officer and the chief financial officer, as appropriate, to allow for timely
decisions regarding required disclosure.

The company's management, including the chief executive officer and interim
chief financial officer, conducted an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act) as of March 31, 2006 pursuant to Rule 13a-15(b) under the Exchange Act and
has concluded that our disclosure controls and procedures were effective as of
March 31, 2006.

Changes in Internal Control Over Financial Reporting

The company's management, with the participation of the company's chief
executive officer and interim chief financial officer, has concluded that there
were no changes in the company's internal control over financial reporting that
occurred during the quarter ended March 31, 2006 that has materially affected,
or is reasonably likely to materially affect, the company's internal control
over financial reporting.

<PAGE>

                                       33


PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

          On September 30, 2005, the company filed a declaratory judgment action
     in the Supreme Court of the State of New York for the Seventh Judicial
     District seeking that Court's determination that the company's agreement
     with CXO of Delaware, LLC dated April 12, 2005 is null and void and
     unenforceable as against the company, its officers and directors.

          Management's position is that the purported April 12, 2005 agreement
     was never formally presented to the company's board of directors nor was it
     formally approved by the company's board. Since board approval for such an
     agreement is required, the April 12, 2005 agreement is null and void. In
     addition, Keith E. Gleasman, the company's president, asserts that he did
     not knowingly execute the purported April 12, 2005 agreement on behalf of
     the company.

          Management's view is that the purported April 12, 2005 agreement is
     unconscionable since its enforceability would result in the company, and
     hence its shareholders, paying potentially enormous sums to persons who
     failed to live up to their promises and whose substantive contribution to
     the company's financial success has been negligible at best.

          On November 8, 2005 the defendants answered the company's complaint by
     asserting that the purported April 12, 2005 agreement is valid and
     enforceable, that the company's alleged failure to honor the agreement has
     damaged defendants in amounts to be determined and seeking indemnification
     under the purported April 12, 2005 agreement for their expenses.

          On February 1, 2006, the company moved for an order granting summary
     judgment in favor of the company and for such other and further relief as
     the Court deems just and proper. The company's motion is based upon its
     contention that specific provisions of the purported April 12, 2005
     agreement are illegal and void as a matter of law and that since the
     illegal provisions are central to the purported agreement's main purpose,
     such provisions in the absence of a "severability" provision, vitiates the
     entire document. The provisions in question require that James and Keith
     Gleasman, as directors and majority shareholders of the company, vote their
     shares to perpetuate the provisions of members of CXO as directors and
     officers of the company. Other provisions require Messrs. Gleasman to
     indemnify members of CXO from liability for their conduct.

          The company's motion is also based upon its view that the enforcement
     of the purported agreement would result in unjust enrichment. The members
     of CXO have not performed services for the company since July, 2005 and no
     longer serve the company as officers or directors, or in any other
     capacities. The enforcement of the purported agreement would only compel
     the company and its shareholders to pay CXO for nonperformance.

          On April 27, 2006, the Court dismissed the company's summary judgment
     motion as to the illegality of the agreements and, in addition, granted the
     management consulting firm's motion for summary judgment as to a limited
     number of counterclaims brought against the company solely with respect to
     the February agreement. On May 8, 2006, the Court entered a judgment and
     order directing the company to honor the exercise of two warrants (under
     both the February and June agreements) which had previously presented to
     the company for an aggregate 40,000 common shares and, in addition, grant a
     warrant to the management consulting firm for 245,000 common shares earned
     under the contested equity incentive provision, exercisable at $.01 per
     share. The company placed the shares and warrants in escrow with the Monroe
     County Clerk's office. The Court also ordered the company to honor the
     approximately 511,200 additional warrants previously granted to the firm
     under the contested June and April agreements.

<PAGE>

                                       34


          The company's litigation counsel believe the Court has committed
     reversible error and such counsel, on May 9, 2006, filed a notice of appeal
     on behalf of the company with respect to the Court's decision, judgment and
     order with the Appellate Division of the New York Supreme Court, Fourth
     Department. In addition, on May 15, 2006, litigation counsel filed a motion
     for reargument or renewal with the trial Court on the basis that such Court
     had overlooked significant facts supporting the company's position and
     completely misstated certain facts in a manner to sustain defendants
     position. The motion is also based upon counsels view that the trial Court
     misapplied well settled legal principles in granting defendants summary
     judgment motions. Litigation counsel has also advised the company to file a
     motion to request the Court to review the facts and law relied on by the
     Court to render its decision.

          Compliance with the Court's order has required the issuance of common
     stock and the grant of warrants. Compliance with future adverse orders, if
     any, rendered by the Court similarly would require the issuance of common
     stock.

          Even if the purported agreement with CXO were to be upheld, the
     company has provided formal notice to CXO that the agreement, in accordance
     with its terms, terminates as of June 30, 2006.

          There is no other litigation involving the company. To the knowledge
     of management, no federal, state or local governmental agency is presently
     contemplating any proceeding against the company.

Item 1A. Risk Factors.

     There have been no significant changes to the risk factors facing the
     company as disclosed in the Company's Form 10-KSB for the year ended
     December 31, 2005, other than those described in Item 2, Management's
     Discussion and Analysis of Financial Condition and Results of Operation;
     Item 3, Quantitative and Qualitative Discussions About Market Risk; and
     Part II, Item 1, Legal Proceedings, all as set forth herein.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

     All sales of unregistered equity securities taking place during the quarter
     ended March 31, 2006 were timely reported in Current Reports on Form 8-K
     filed by the company.

Item 3. Defaults Upon Senior Securities.

     None

Item 4. Submission of Matters to a Vote of Security Holders.

     None

Item 5. Other Information.

     None

Item 6. Exhibits.

     Exhibits as required by Item 601 of Regulation S-K, as applicable, are
     attached to this Quarterly Report (Form 10-Q). The Exhibit Index is found
     on the page immediately succeeding the signatures page, and the Exhibits
     follow on the pages immediately succeeding the Exhibit Index.

     (2)  Plan of acquisition, reorganization, arrangement, liquidation, or
          succession

<PAGE>

                                       35


          2.1  Agreement and Plan of Merger, dated November 29, 2000 by and
               among Torvec Subsidiary Corporation, Torvec, Inc., UTEK
               Corporation and ICE Surface Development, Inc. incorporated by
               reference to Form 8-K filed November 30, 2000 and Form 8K/A filed
               February 12, 2001.

     (3)  Articles of Incorporation, By-laws

          3.1  Certificate of Incorporation, incorporated by reference to Form
               10-SB/A, Registration Statement, registering Company's $.01 par
               value common stock under section 12(g) of the Securities Exchange
               Act of 1934;

          3.2  Certificate of Amendment to the Certificate of Incorporation
               dated August 30, 2000, incorporated by reference to Form SB-2
               filed October 19, 2000;

          3.3  Certificate of Correction dated March 22, 2002, incorporated by
               reference to Form 10-KSB filed for fiscal year ended December 31,
               2002;

          3.4  By-laws, as amended by shareholders on January 24, 2002,
               incorporated by reference to Form 10-KSB filed for fiscal year
               ended December 31, 2002;

          3.5  Certification of Amendment to the Certificate of Incorporation
               dated October 21, 2004 setting forth terms and conditions of
               Class B Preferred, incorporated by reference to Form 10-QSB filed
               for fiscal quarter ended September 30, 2004.

     (4)  Instruments defining the rights of holders including indentures

          None

     (9)  Voting Trust Agreement

          None

     (10) Material Contracts

          10.1 Certain Employment Agreements, Consulting Agreements, certain
               assignments of patents, patent properties, technology and
               know-how to the Company, Neri Service and Space Agreement and
               Ford Motor Company Agreement and Extension of Term, all
               incorporated by reference to Form 10-SB/A, Registration
               Statement, registering Company's $.01 par value common stock
               under section 12(g) of the Securities Exchange Act of 1934;

          10.2 The Company's 1998 Stock Option Plan and related Stock Options
               Agreements, incorporated by reference to Form S-8, Registration
               Statement, registering 2,000,000 shares of the Company's $.01 par
               value common stock reserved for issuance thereunder, effective
               December 17, 1998;

          10.3 The Company's Business Consultants Stock Plan, incorporated by

<PAGE>

                                       36


               reference to Form S-8, Registration Statement, registering
               200,000 shares of the Company's $.01 par value common stock
               reserved for issuance thereunder, effective June 11, 1999, as
               amended by reference to Form S-8 Registration Statements
               registering an additional 200,000, 200,000, 100,000, 800,000,
               250,000, 250,000, 350,000, 250,000, and 2,500,000 shares of the
               Company's $.01 par value common stock reserved for issuance
               thereunder, effective October 5, 2000, November 7, 2001, December
               21, 2001, February 1, 2002, November 12, 2002, January 22, 2003,
               May 23, 2003, November 26, 2003, and April 20, 2004 respectively;

          10.4 Termination of Neri Service and Space Agreement dated August 31,
               1999, incorporated by reference to Form 10-QSB filed for the
               quarter ended September 30, 1999;

          10.5 Operating Agreement of Variable Gear, LLC dated June 28, 2000,
               incorporated by reference to Form 10-QSB filed for the quarter
               ended June 30, 2000;

          10.6 License Agreement between Torvec, Inc. and Variable Gear, LLC
               dated June 28, 2000, incorporated by reference to Form SB-2 filed
               October 19, 2000;

          10.7 Investment Agreement with Swartz Private Equity, LLC dated
               September 5, 2000, together with attachments thereto,
               incorporated by reference to Form 8-K filed October 2, 2000;

          10.8 Extension of and Amendment to Consulting Agreement with James A.
               Gleasman, incorporated by reference to Form 10-KSB filed for the
               fiscal year ended December 31, 2000;

          10.9 Extension of and Amendment to Consulting Agreement with Keith E.
               Gleasman, incorporated by reference to Form 10-KSB filed for the
               fiscal year ended December 31, 2000;

          10.10 Extension of and Amendment to Consulting Agreement with Vernon
               E. Gleasman, incorporated by reference to Form 10-KSB filed for
               the fiscal year ended December 31, 2000;

          10.11 Option and Consulting Agreement with Marquis Capital, LLC dated
               February 10, 1999, incorporated by reference to Form 10-QSB filed
               for quarter ended March 31, 2001;

          10.12 Option and Consulting Agreement with PMC Direct Corp., dated
               February 10, 1999, incorporated by reference to Form 10-QSB filed
               for quarter ended March 31, 2001;

          10.13 Investment Banking Services Agreement with Swartz Institutional
               Finance (Dunwoody Brokerage Services, Inc.) dated December 8,
               2000, incorporated by reference to Form 10-QSB filed for quarter
               ended March 31, 2001;

          10.14 Employment Agreement with Michael Martindale, Chief Executive

<PAGE>

                                       39


               Officer, dated August 1, 2001, incorporated by reference to Form
               10-QSB filed for fiscal quarter ended September 30, 2001;

          10.15 Employment Agreement with Jacob H. Brooks, Chief Operating
               Officer, dated August 1, 2001, incorporated by reference to Form
               10-QSB filed for fiscal quarter ended September 30, 2001;

          10.16 Employment Agreement with David K. Marshall, Vice-President of
               Manufacturing, dated September 1, 2001, incorporated by reference
               to Form 10-QSB filed for fiscal quarter ended September 30, 2001;

          10.17 Investment Banking Services Agreement with Swartz Institutional
               Finance (Dunwoody Brokerage Services, Inc.), as amended, dated
               October 23, 2001, incorporated by reference to Form 10-QSB filed
               for fiscal quarter ended September 30, 2001;

          10.18 Stock Option Agreement with Samuel Bronsky, Chief Financial and
               Accounting Officer, dated August 28, 2001, incorporated by
               reference to Form 10-QSB filed for fiscal quarter ended September
               30, 2001;

          10.19 Pittsford Capital Group, LLC Agreement dated January 30, 2002,
               incorporated by reference to Form 10-KSB filed for fiscal year
               ended December 31, 2001;

          10.20 Gleasman-Steenburgh Indemnification Agreement dated April 9,
               2002, incorporated by reference to Form 10-KSB filed for fiscal
               year ended December 31, 2001;

          10.21 Series B Warrant dated April 10, 2002, incorporated by reference
               to Form 10-KSB filed for fiscal year ended December 31, 2001;

          10.22 Billow Butler & Company, LLC investment banking engagement
               letter dated October 1, 2003, incorporated by reference to Form
               10-QSB filed for fiscal quarter ended September 30, 2003;

          10.23 Letter of Acknowledgement and Agreement with U.S. Environmental
               Protection Agency dated February 4, 2004, incorporated by
               reference to Form 10-KSB filed for fiscal year ended December 31,
               2003;

          10.24 Letter Agreement with CXO on the GO, L.L.C. dated February 20,
               2004, incorporated by reference to Form 10-KSB filed for fiscal
               year ended December 31, 2003;

          10.25 Letter Amendment with CXO on the GO, L.L.C. dated February 23,
               2004, incorporated by reference to Form 10-KSB filed for fiscal
               year ended December 31, 2003;

          10.26 Lease Agreement for premises at Powder Mills Office Park, 1169

<PAGE>

                                       38


               Pittsford-Victor Road, Suite 125, Pittsford, New York 14534,
               dated July 16, 2004; incorporated by reference to Form 10-QSB
               filed for fiscal quarter ended June 30, 2004;

          10.27 Lease Agreement for testing facility and Mustang dynamometer,
               dated July 21, 2004; incorporated by reference to Form 10-QSB
               filed for fiscal quarter ended June 30, 2004;

          10.28 Advisory Agreement with PNB Consulting, LLC, 970 Peachtree
               Industrial Blvd., Suite 303, Suwanee, Georgia 30024; incorporated
               by reference to Form 10-QSB filed for fiscal quarter ended June
               30, 2004;

          10.29 Agreement between Torvec and ZT Technologies, Inc. dated July
               21, 2004, incorporated by reference to Form 10-QSB filed for
               fiscal quarter ended September 30, 2004;

          10.30 Assignment and Assumption of Lease between William J. Green and
               Ronald J. Green and Torvec, Inc. effective as of December 31,
               2004, incorporated by reference to Form 10-KSB filed for fiscal
               year ended December 31,2004;

          10.31 Bill of Sale between Dynamx, Inc. and Torvec, Inc. for equipment
               and machinery, incorporated by reference to Form 10-KSB filed for
               fiscal year ended December 31, 2004;

          10.32 Lease and Services Agreement between Robert C. Horton as
               Landlord and Torvec, Inc. as Tenant dated March 18, 2005,
               incorporated by reference to Form 10-KSB filed for fiscal year
               ended December 31, 2004;

          10.33 Settlement Agreement and Mutual Release between Torvec, Inc. and
               ZT Technologies, Inc. dated March 29, 2005, incorporated by
               reference to Form 10-QSB filed for fiscal quarter ended March 31,
               2005;

          10.34 Advisory Agreement between Robert C. Horton and Torvec, Inc.
               dated February 15, 2005, incorporated by reference to Form 10-QSB
               filed for fiscal quarter ended March 31, 2005;

          10.35 Lease and Services Agreement between Dennis J. Trask as Landlord
               and Torvec, Inc. as Tenant dated April 18, 2005, incorporated by
               reference to Form 10-QSB filed for fiscal quarter ended March 31,
               2005; 10.36 Consulting Agreement with Matthew R. Wrona, dated
               June 30, 2005, incorporated by reference to Form 10-QSB filed for
               fiscal quarter ended June 30, 2005;

          10.37 Option Agreement between Matthew R. Wrona and Torvec, Inc. dated
               June 30, 2005, incorporated by reference to Form 10-QSB filed for
               fiscal quarter ended June 30, 2005;

<PAGE>

                                       39


          10.38 Trust Agreement between Matthew R. Wrona, Donald Gabel, Lawrence
               Clark, Steven Urbanik, Floyd G. Cady,Jr., and Michael Pomponi as
               Grantors and Richard B. Sullivan as Trustee, dated September 22,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.39 Consultant Agreement with Floyd G. Cady, Jr., dated October 1,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.40 Consultant Agreement with Lawrence W. Clark, dated October 1,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.41 Consultant Agreement with Donald W. Gabel, dated October 1,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.42 Consultant Agreement with Michael A. Pomponi, dated October 1,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.43 Consultant Agreement with Steven Urbanik, dated October 1, 2005,
               incorporated by reference to Form 10-QSB filed for fiscal quarter
               ended September 30, 2005;

          10.44 Consultant Agreement with Kiwee Johnson, dated September 30,
               2005, incorporated by reference to Form 10-QSB filed for fiscal
               quarter ended September 30, 2005;

          10.45 Confidentiality Agreement with Joseph B. Rizzo, dated October
               24, 2005, incorporated by reference to Form 10-QSB filed for
               fiscal quarter ended September 30, 2005.

          10.46 Minutes of meeting Board of Directors Torvec, Inc., held October
               19, 2004, creating the non-management directors plan,
               incorporated by reference to Form 10-KSB filed for the fiscal
               year ended December 31, 2006.

     (11) Statement re computation of per share earnings (loss)

          Not applicable

     (14) Code of Ethics

     (16) Letter on change in certifying accountant

          None

     (18) Letter re change in accounting principles

          None

<PAGE>

                                       40


     (20) Other documents or statements to security holders

          None

     (21) Subsidiaries of the registrant

          Ice Surface Development, Inc. (New York)
          Iso-Torque Corporation (New York)
          IVT Diesel Corp. (New York)
          Variable Gear, LLC (New York)

     (22) Published report regarding matters submitted to vote of security
          holders

          None

     (23.1) Consents of experts and counsel

          Eisner LLP Consent

     (24) Power of attorney

          None

     (31) Rule 13(a)-14(a)/15(d)-14(a) Certifications

     (32) Section 1350 Certifications

     (99) Additional exhibits

     (99.1) New York State Proposal

<PAGE>

                                       41


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        TORVEC, INC.


Date: May, 2006                         By: S - James Y. Gleasman
                                            ------------------------------------
                                            James Y. Gleasman, Chief Executive
                                            Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


Dated: May 22, 2006                     By: S - James Y. Gleasman
                                            ------------------------------------
                                            James Y. Gleasman, Chief Executive
                                            Officer, Interim Chief Financial
                                            Officer and Director


Dated: May 22, 2006                     By: S - Keith E. Gleasman
                                            ------------------------------------
                                            Keith E. Gleasman, President and
                                            Director


Dated: May 22, 2006                     By: S - Herbert H. Dobbs
                                            ------------------------------------
                                            Herbert H. Dobbs, Secretary and
                                            Director


Dated: May 22, 2006                     By: S - Daniel R. Bickel
                                            ------------------------------------
                                            Daniel R. Bickel, Director


Dated: May 22, 2006                     By: S - Joseph B. Rizzo
                                            ------------------------------------
                                            Joseph B. Rizzo, Director


Dated: May 22, 2006                     By: S - Gary A. Siconolfi
                                            ------------------------------------
                                            Gary A. Siconolfi, Director
<PAGE>

                                       42


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT                                                                            PAGE
-------                                                                            ----
<S>      <C>                                                                       <C>
(2)      Plan of acquisition, reorganization, arrangement, liquidation, or
         succession

         2.1     Agreement and Plan of Merger, dated November 29, 2000 by and
                 among Torvec Subsidiary Corporation, Torvec, Inc., UTEK
                 Corporation and ICE Surface Development, Inc. incorporated by
                 reference to Form 8-K filed November 30, 2000 and Form 8K/A
                 filed February 12, 2001.                                          N/A

(3)      Articles of Incorporation, By-laws

         3.1     Certificate of Incorporation, incorporated by reference to Form
                 10-SB/A, Registration Statement, registering Company's $.01 par
                 value common stock under section 12(g) of the Securities
                 Exchange Act of 1934;                                             N/A

         3.2     Certificate of Amendment to the Certificate of Incorporation
                 dated August 30, 2000, incorporated by reference to Form SB-2
                 filed October 19, 2000;                                           N/A

         3.3     Certificate of Correction dated March 22, 2002, incorporated by
                 reference to Form 10-KSB filed for fiscal year ended December
                 31, 2002;                                                         N/A

         3.4     By-laws, as amended by shareholders on January 24, 2002,
                 incorporated by reference to Form 10-KSB filed for fiscal year
                 ended December 31, 2002;                                          N/A

         3.5     Certification of Amendment to the Certificate of Incorporation
                 dated October 21, 2004 setting forth terms and conditions of
                 Class B Preferred, incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended September 30, 2004.                N/A

(4)      Instruments defining the rights of holders including indentures

         None                                                                      N/A

(9)      Voting Trust Agreement

         None                                                                      N/A

(10)     Material Contracts

         10.1    Certain Employment Agreements, Consulting Agreements, certain
                 assignments of patents, patent properties, technology and
                 know-how to the Company, Neri Service and Space Agreement and
                 Ford Motor Company Agreement and Extension of Term, all
                 incorporated by reference to Form 10-SB/A, Registration
                 Statement, registering Company's $.01 par value common stock
                 under section 12(g) of the Securities Exchange Act of 1934;       N/A
</TABLE>

<PAGE>

                                       43


<TABLE>
<S>      <C>                                                                       <C>
         10.2    The Company's 1998 Stock Option Plan and related Stock Options
                 Agreements, incorporated by reference to Form S-8, Registration
                 Statement, registering 2,000,000 shares of the Company's $.01
                 par value common stock reserved for issuance thereunder,
                 effective December 17, 1998;                                      N/A

         10.3    The Company's Business Consultants Stock Plan, incorporated by
                 reference to Form S-8, Registration Statement, registering
                 200,000 shares of the Company's $.01 par value common stock
                 reserved for issuance thereunder, effective June 11, 1999 as
                 amended by reference to Form S-8 Registration Statement
                 registering an additional 200,000, 200,000, 100,000, 800,000,
                 250,000, 250,000, 350,000, 250,000 and 2,500,000 shares of the
                 Company's $.01 par value common stock reserved for issuance
                 thereunder, effective October 5, 2000, November 7, 2001,
                 December 21, 2001, February 1, 2002, November 12, 2002, January
                 22, 2003, May 23, 2003, November 26, 2003 and April 20, 2004
                 respectively;                                                     N/A

         10.4    Termination of Neri Service and Space Agreement dated August
                 31, 1999, incorporated by reference to Form 10-QSB filed for
                 the quarter ended September 30, 1999;                             N/A

         10.5    Operating Agreement of Variable Gear, LLC dated June 28, 2000,
                 incorporated by reference to Form 10-QSB filed for the quarter
                 ended June 30, 2000;                                              N/A

         10.6    License Agreement between Torvec, Inc. and Variable Gear, LLC
                 dated June 28, 2000, incorporated by reference to Form SB-2
                 filed October 19, 2000;                                           N/A

         10.7    Investment Agreement with Swartz Private Equity, LLC dated
                 September 5, 2000, together with attachments thereto,
                 incorporated by reference to Form 8-K filed October 2, 2000;      N/A

         10.8    Extension of and Amendment to Consulting Agreement with James
                 A. Gleasman, incorporated by reference to Form 10-KSB filed for
                 the fiscal year ended December 31, 2000;                          N/A

         10.9    Extension of and Amendment to Consulting Agreement with Keith
                 E. Gleasman, incorporated by reference to Form 10-KSB filed for
                 the fiscal year ended December 31, 2000;                          N/A

         10.10   Extension of and Amendment to Consulting Agreement with Vernon
                 E. Gleasman, incorporated by reference to Form 10-KSB filed for
                 the fiscal year ended December 31, 2000;                          N/A

         10.11   Option and Consulting Agreement with Marquis Capital, LLC dated
                 February 10, 1999, incorporated by reference to Form 10-QSB
                 filed for quarter ended March 31, 2001;                           N/A
</TABLE>

<PAGE>

                                       44


<TABLE>
<S>      <C>                                                                       <C>
         10.12   Option and Consulting Agreement with PMC Direct Corp., dated
                 February 10, 1999, incorporated by reference to Form 10-QSB
                 filed for quarter ended March 31, 2001;                           N/A

         10.13   Investment Banking Services Agreement with Swartz Institutional
                 Finance (Dunwoody Brokerage Services, Inc.) dated December 8,
                 2000, incorporated by reference to Form 10-QSB filed for
                 quarter ended March 31, 2001;                                     N/A

         10.14   Employment Agreement with Michael Martindale, Chief Executive
                 Officer, dated August 1, 2001, incorporated by reference to
                 Form 10-QSB filed for fiscal quarter ended September 30, 2001;    N/A

         10.15   Employment Agreement with Jacob H. Brooks, Chief Operating
                 Officer, dated August 1, 2001, incorporated by reference to
                 Form 10-QSB filed for fiscal quarter ended September 30, 2001;    N/A

         10.16   Employment Agreement with David K. Marshall, Vice-President of
                 Manufacturing, dated September 1, 2001, incorporated by
                 reference to Form 10-QSB filed for fiscal quarter ended
                 September 30, 2001;                                               N/A

         10.17   Investment Banking Services Agreement with Swartz Institutional
                 Finance (Dunwoody Brokerage Services, Inc.), as amended, dated
                 October 23, 2001, incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended September 30, 2001;                N/A

         10.18   Stock Option Agreement with Samuel Bronsky, Chief Financial and
                 Accounting Officer, dated August 28, 2001, incorporated by
                 reference to Form 10-QSB filed for fiscal quarter ended
                 September 30, 2001;                                               N/A

         10.19   Pittsford Capital Group, LLC Agreement dated January 30, 2002,
                 incorporated by reference to Form 10-KSB filed for fiscal year
                 ended December 31, 2001;                                          N/A

         10.20   Gleasman-Steenburgh Indemnification Agreement dated April 9,
                 2002, incorporated by reference to Form 10-KSB filed for fiscal
                 year ended December 31, 2001;                                     N/A

         10.21   Series B Warrant dated April 10, 2002, incorporated by
                 reference to Form 10-KSB filed for fiscal year ended December
                 31, 2001;                                                         N/A

         10.22   Billow Butler & Company, LLC investment banking engagement
                 letter dated October 1, 2003, incorporated by reference to Form
                 10-QSB filed for fiscal quarter ended September 30, 2003;         N/A

         10.23   Letter of Acknowledgement and Agreement with U.S. Environmental
                 Protection Agency dated February 4, 2004, incorporated by
                 reference to Form 10-KSB filed for fiscal year ended December
                 31, 2003;                                                         N/A
</TABLE>

<PAGE>

                                       45


<TABLE>
<S>      <C>                                                                       <C>
         10.24   Letter Agreement with CXO on the GO, L.L.C. dated February 20,
                 2004, incorporated by reference to Form 10-KSB filed for fiscal
                 year ended December 31, 2003;                                     N/A

         10.25   Letter Amendment with CXO on the GO, L.L.C. dated February 23,
                 2004, incorporated by reference to Form 10-KSB filed for fiscal
                 year ended December 31, 2003;                                     N/A

         10.26   Lease Agreement for premises at Powder Mills Office Park, 1169
                 Pittsford-Victor Road, Suite 125, Pittsford, New York 14534,
                 dated July 16, 2004, incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended June 30, 2004;;                    N/A

         10.27   Lease Agreement for testing facility and Mustang dynamometer,
                 dated July 21, 2004; incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended June 30, 2004;                     N/A

         10.28   Advisory Agreement with PNB Consulting, LLC, 970 Peachtree
                 Industrial Blvd., Suite 303, Suwanee, Georgia 30024;
                 incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended June 30, 2004;                                      N/A

         10.29   Agreement between Torvec and ZT Technologies, Inc. dated July
                 21, 2004, incorporated by reference to Form 10-QSB filed for
                 fiscal quarter ended September 30, 2004;                          N/A

         10.30   Assignment and Assumption of Lease between William J. Green and
                 Ronald J. Green and Torvec, Inc. effective as of December 31,
                 2004, incorporated by reference to Form 10-KSB filed for fiscal
                 year ended December 31, 2004;                                     N/A

         10.31   Bill of Sale between Dynamx, Inc. and Torvec, Inc. for
                 equipment and machinery, incorporated by reference to Form
                 10-KSB filed for fiscal year ended December 31, 2004;             N/A

         10.32   Lease and Services Agreement between Robert C. Horton as
                 Landlord and Torvec, Inc. as Tenant dated March 18, 2005,
                 incorporated by reference to Form 10-KSB filed for fiscal year
                 ended December 31, 2004;                                          N/A

         10.33   Settlement Agreement and Mutual Release between Torvec, Inc.
                 and ZT Technologies, Inc. dated March 29, 2005, incorporated by
                 reference to Form 10-QSB filed for fiscal quarter ended March
                 31, 2005;                                                         N/A

         10.34   Advisory Agreement between Robert C. Horton and Torvec, Inc.
                 dated February 15, 2005, incorporated by reference to Form
                 10-QSB filed for fiscal quarter ended March 31, 2005;             N/A

         10.35   Lease and Services Agreement between Dennis J. Trask as
                 Landlord and Torvec, Inc. as Tenant dated April 18, 2005,
                 incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended March 31, 2005;                                     N/A
</TABLE>

<PAGE>

                                       46


<TABLE>
<S>      <C>                                                                       <C>
         10.36   Consulting Agreement with Matthew R. Wrona, dated June 30,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended June 30, 2005;                                      N/A

         10.37   Option Agreement between Matthew R. Wrona and Torvec, Inc.
                 dated June 30, 2005, incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended June 30, 2005;                     N/A

         10.38   Trust Agreement between Matthew R. Wrona, Donald Gabel,
                 Lawrence Clark, Steve Urbanik, Floyd G. Cady, Jr. and Michael
                 Pomponi as Grantors and Richard B. Sullivan as Trustee, dated
                 September 22, 2005, incorporated by reference to Form 10-QSB
                 filed for fiscal quarter ended September 30, 2005;                N/A

         10.39   Consultant Agreement with Floyd G. Cady, Jr., dated October 1,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended September 30, 2005;                                 N/A

         10.40   Consultant Agreement with Lawrence W. Clark, dated October 1,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended September 30, 2005;                                 N/A

         10.41   Consultant Agreement with Donald W. Gabel, dated October 1,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended September 30, 2005;                                 N/A

         10.42   Consultant Agreement with Michael A. Pomponi, dated October 1,
                 2005, incorporated by reference to Form 10-QSB filed for
                 fiscal quarter ended September 30, 2005;                          N/A

         10.43   Consultant Agreement with Steven Urbanik, dated October 1,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended September 30, 2005;                                 N/A

         10.44   Consultant Agreement with Kiwee Johnson, dated September 30,
                 2005, incorporated by reference to Form 10-QSB filed for fiscal
                 quarter ended September 30, 2005;                                 N/A

         10.45   Confidentiality Agreement with Joseph B. Rizzo, dated October
                 24, 2005, incorporated by reference to Form 10-QSB filed for
                 fiscal quarter ended September 30, 2005                           N/A

         10.46   Minutes of meeting Board of Directors Torvec, Inc., held
                 October 19, 2004, creating the non-management directors plan,
                 incorporated by reference to Form 10-KSB for fiscal year ended
                 December 31, 2005                                                 N/A

(11)     Statement re computation of per share earnings (loss)                     N/A

         Not applicable
</TABLE>

<PAGE>

                                       47


<TABLE>
<S>      <C>                                                                       <C>
(14)     Code of Ethics                                                            N/A

(16)     Letter on change in certifying accountant                                 N/A

         None

(18)     Letter re change in accounting principles                                 N/A

         None

(20)     Other documents or statements to security holders                         N/A

         None

(21)     Subsidiaries of the registrant                                            N/A
         Ice Surface Development, Inc. (New York)
         Iso-Torque Corporation (New York)
         IVT Diesel Corp. (New York)
         Variable Gear, LLC (New York)

(22)     Published report regarding matters submitted to vote of security
         holders                                                                   N/A

         None

(23)     Consents of experts and counsel                                           N/A

(24)     Power of attorney                                                         N/A

         None

(31)     Rule 13(a)-14(a)/15(d)-14(a) Certifications                               49

(32)     Section 1350 Certifications                                               50

(99)     Additional exhibits                                                       N/A

(99.1)   New York State Proposal                                                   51

         None
</TABLE>