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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 000-24455
 TORVEC, INC.
  New York
    
    16-1509512(State or other jurisdiction of incorporation or
 organization)
    
    (I.R.S. Employer Identification No.)
 1169 Pittsford Victor Road, Suite 125 Pittsford, New York 14534
(Address of principal executive offices and Zip Code)
 (585) 248-0740   Not Applicable
 þ o
  o o þ
 o þ
 APPLICABLE ONLY TO CORPORATE ISSUERS:
 Class
    
    Number of Shares Outstanding at
November 1, 2006Common Stock, $.01 par value
    
    31,162,025Options Outstanding & Not Exercised
    
    Shares to cover the options will not be issued until they are exercised.1,823,895




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##### 



2  
 
 INDEX
 PAGEPART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsTorvec, Inc. and Subsidiaries Condensed Consolidated Balance Sheets  September 30,
2006 (Unaudited) and December 31, 2005 (Derived from Audited Financial Statements)
    
    
    3Torvec, Inc. and Subsidiaries Condensed Consolidated Statements of Operations Three
and Nine Months Ended September 30, 2006 and 2005 (Unaudited) and September 25, 1996
(Inception) through September 30, 2006
    
    
    4Torvec, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows 
Three and Nine Months Ended September 30, 2006 and 2005 (Unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6  25Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    30Item 4.
    
    Controls and Procedures
    
    
    31PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    32Item 1A.
    
    Risk Factors
    
    
    33Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3.
    
    Defaults Upon Senior Securities
    
    
    33Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    34  39SIGNATURES PAGE
    
    
    40EXHIBIT INDEX
    
    
    41EX-31.1EX-32EX-31.1EX-32




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3 
 PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 
  December 31, 2005(Derived fromSeptember 30, 2006
    
    
    Audited Financial(Unaudited)
    
    
    
    Statements)ASSETSCurrent assets:Cash
    
    $
    160,000
    
    
    $
    51,000Prepaid expenses and other receivable
    
    
    72,000
    
    
    
    67,000Total current assets
    
    
    232,000
    
    
    
    118,000Property and Equipment:Office equipment
    
    
    44,000
    
    
    
    42,000Shop equipment
    
    
    126,000
    
    
    
    126,000Leasehold improvements
    
    
    3,000
    
    
    
    3,000Transportation equipment
    
    
    107,000
    
    
    
    99,000280,000
    
    
    
    270,000Less accumulated depreciation and amortization
    
    
    113,000
    
    
    
    82,000Net property and equipment
    
    
    167,000
    
    
    
    188,000Other Assets:License, less accumulated amortization of $2,190,000 and
$1,548,000, respectively
    
    
    1,071,000
    
    
    
    1,712,000Deposits
    
    
    252,000
    
    
    
    2,000Total Other Assets
    
    
    1,323,000
    
    
    
    1,714,000$
    1,722,000
    
    
    $
    2,020,000LIABILITIESCurrent liabilities:Notes payable, current portion
    
    $
    14,000
    
    
    $
    5,000Accounts payable
    
    
    192,000
    
    
    
    148,000Accrued liabilities
    
    
    1,541,000
    
    
    
    1,541,000Total current liabilities
    
    
    1,747,000
    
    
    
    1,694,000Deferred revenue
    
    
    150,000
    
    
    
    150,000Notes payable, net of current portion
    
    
    62,000
    
    
    
    19,000Advance from shareholder
    
    
    250,000
    
    
    
    Total liabilities
    
    
    2,209,000
    
    
    
    1,863,000Minority interest
    
    
    
    
    
    
    8,000Commitments and other mattersSTOCKHOLDERS (DEFICIENCY) EQUITYPreferred stock, $.01 par value, 100,000,000 shares authorized3,300,000 designated as Class A, Non-voting, cumulative
dividend $.40 per share, per annum, convertible
preferred, 621,243 and 459,243 shares issued and outstanding
(liquidation preference $2,894,027 and $2,085,179) at
September 30, 2006 and December 31, 2005, respectively.
    
    
    6,000
    
    
    
    5,000300,000 designated as Class B, Non-voting, cumulative
dividend $.50 per share, per annum, convertible
preferred, 42,500 shares issued and outstanding
(liquidation
preference $256,679 and $240,292) at September 30, 2006 and December 31, 2005, respectively
    
    
    
    
    
    
    Common stock, $.01 par value, 40,000,000 shares authorized,
31,099,115 and 30,052,630 issued and outstanding, at
September 30, 2006 and December 31, 2005, respectively
    
    
    311,000
    
    
    
    300,000Additional paid-in capital
    
    
    41,560,000
    
    
    
    37,267,000Shares issued for future consulting services
    
    
    (160,000
    )
    
    
    (103,000
    )Deficit accumulated during the development stage
    
    
    (42,204,000
    )
    
    
    (37,320,000
    )(487,000
    )
    
    
    149,000$
    1,722,000
    
    
    $
    2,020,000
 See notes to condensed consolidated financial statements




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4 
 
 
 September 25,1996(Inception)Three Months Ended
    
    
    Nine Months Ended
    
    
    ThroughSeptember 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Cost and expenses:Research and development
    
    
    334,000
    
    
    
    782,000
    
    
    
    1,252,000
    
    
    
    2,266,000
    
    
    
    14,029,000General and administrative
    
    
    1,957,000
    
    
    
    244,000
    
    
    
    3,640,000
    
    
    
    2,218,000
    
    
    
    29,447,000Loss before minority interest
    
    
    (2,291,000
    )
    
    
    (1,026,000
    )
    
    
    (4,892,000
    )
    
    
    (4,484,000
    )
    
    
    (43,476,000
    )Minority interest in loss
of consolidated
subsidiary
    
    
    
    
    
    
    68,000
    
    
    
    8,000
    
    
    
    205,000
    
    
    
    1,272,000Net loss
    
    
    (2,291,000
    )
    
    
    (958,000
    )
    
    
    (4,884,000
    )
    
    
    (4,279,000
    )
    
    
    (42,204,000)
    )Preferred stock
beneficial conversion
feature
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,000
    
    
    
    715,000Preferred stock dividend
    
    
    65,000
    
    
    
    41,000
    
    
    
    177,000
    
    
    
    111,000
    
    
    
    452,000Net loss attributable to
common stockholders
    
    $
    (2,356,000
    )
    
    $
    (999,000
    )
    
    $
    (5,061,000
    )
    
    $
    (4,549,000
    )
    
    $
    (43,371,000
    )Basic and diluted net loss
attributable to common
stockholders per share
    
    $
    (0.08
    )
    
    $
    (0.03
    )
    
    $
    (0.17
    )
    
    $
    (0.15
    )Weighted average number of
shares of common stock  basic
and diluted
    
    
    30,640,000
    
    
    
    29,692,000
    
    
    
    30,472,000
    
    
    
    29,417,000
 See notes to condensed consolidated financial statements




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5 
 
 
 September 25,1996(Inception)Nine Months Ended
    
    
    ThroughSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (4,884,000
    )
    
    $
    (4,279,000
    )
    
    $
    (42,204,000
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    672,000
    
    
    
    661,000
    
    
    
    2,326,000Gain on sale of fixed assets
    
    
    
    
    
    
    (10,000
    )
    
    
    (10,000
    )Minority interest in loss of consolidated subsidiary
    
    
    (8,000
    )
    
    
    (205,000
    )
    
    
    (1,272,000
    )Compensation expense attributable to common stock
in Subsidiary
    
    
    
    
    
    
    
    
    
    
    619,000Common stock issued for services
    
    
    921,000
    
    
    
    1,539,000
    
    
    
    10,302,000Shares issued for future consulting services
    
    
    (57,000
    )
    
    
    
    
    
    
    (68,000
    )Contribution of services
    
    
    225,000
    
    
    
    225,000
    
    
    
    2,034,000Compensatory common stock, options and warrants
    
    
    2,498,000
    
    
    
    1,071,000
    
    
    
    15,486,000Changes in:Prepaid expenses
    
    
    (5,000
    )
    
    
    122,000
    
    
    
    89,000Deposits
    
    
    (250,000
    )
    
    
    
    
    
    
    (252,000
    )Accounts payable and accrued expenses
    
    
    44,000
    
    
    
    (56,000
    )
    
    
    3,641,000Deferred revenue
    
    
    
    
    
    
    
    
    
    
    150,000Net cash used in operating activities
    
    
    (846,000
    )
    
    
    (932,000
    )
    
    
    (9,150,000
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (10,000
    )
    
    
    (49,000
    )
    
    
    (280,000
    )Cost of acquisition
    
    
    
    
    
    
    
    
    
    
    (16,000
    )Proceeds from sale of fixed asset
    
    
    
    
    
    
    10,000
    
    
    
    10,000Net cash used in investing activities
    
    
    (10,000
    )
    
    
    (39,000
    )
    
    
    (285,000
    )Cash flows from financing activities:Net proceeds from sales of common stock and upon
exercise of options and warrants
    
    
    11,000
    
    
    
    
    
    
    
    6,501,000Net proceeds from sales of preferred stock
    
    
    648,000
    
    
    
    577,000
    
    
    
    2,817,000Net proceeds from sale of subsidiary stock
    
    
    
    
    
    
    
    
    
    
    234,000Net proceeds from sale of warrants
    
    
    2,000
    
    
    
    
    
    
    
    2,000Proceeds from long  term borrowings
    
    
    306,000
    
    
    
    
    
    
    
    335,000Repayments of long-term debt
    
    
    (4,000
    )
    
    
    
    
    
    
    (33,000
    )Proceeds from stockholders loans-net
    
    
    
    
    
    
    
    
    
    
    103,000Distributions
    
    
    
    
    
    
    
    
    
    
    (365,000
    )Net cash provided by financing activities
    
    
    963,000
    
    
    
    577,000
    
    
    
    9,594,000Net increase (decrease) in cash
    
    
    109,000
    
    
    
    (394,000
    )
    
    
    160,000Cash at beginning of period
    
    
    51,000
    
    
    
    574,000
    
    
    
    Cash at end of period
    
    $
    160,000
    
    
    $
    180,000
    
    
    $
    160,000Supplemental disclosure of non-cash investing and
financing activities:Shares issued for future consulting services
    
    $
    160,000
    
    
    $
    103,000
 See notes to condensed consolidated financial statements




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6 
 
 
 Note A  The Company and Basis of Presentation
    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 September 30, 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.




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7 
 
 Note B  Summary of Significant Accounting Policies (continued)
 [4] License:
   Period EndingSeptember 30,
    
    Amount2007
    
    $
    856,0002008
    
    
    214,000$
    1,070,000
 [5] Use of estimates:
  [6] Loss per common share:
  [7] Fair value of financial instruments:




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8 
 
 Note B  Summary of Significant Accounting Policies (continued)
 [8] Stock-based compensation:




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Note B  Summary of Significant Accounting Policies (continued)
 [8] Stock-based compensation: (continued)
   Nine Months EndedSeptember 30, 2005Reported net loss attributable to common stockholders
    
    $
    (4,549,000
    )Add: Stock-based compensation expense under APB No. 25 included in
net loss, net of related tax effects
    
    
    Stock-based employee compensation determined under the fair value
based method prior to adoption of SFAS 123R, net of related tax
effects
    
    
    Pro Forma net loss attributable to common stockholders
    
    $
    (4,549,000
    )Loss per share:Basic and diluted attributable to common stockholders  as reported
    
    $
    (0.15
    )Basic and diluted attributable to common stockholders  pro forma
    
    $
    (0.15
    )
   WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueNumber of shares under option plan:Outstanding at January 1, 2006
    
    
    1,823,895
    
    
    $
    4.85GrantedExercisedCanceled or expiredOutstanding at September 30, 2006
    
    
    1,823,895
    
    
    $
    4.85
    
    
    
    3.25
    
    
    $
    38,000Exercisable at September 30, 2006
    
    
    1,823,895
    
    
    $
    4.85
    
    
    
    3.25
    
    
    $
    38,000
    290,000




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10 
 
 Note B  Summary of Significant Accounting Policies (continued)
 [9] Revenue recognition:
  [10] Impairment of long-lived assets:
  [11] Recent accounting pronouncements:




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11 
 
 NOTE C  LICENSES FROM THE TRUSTEES OF DARTMOUTH COLLEGE
  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 and as a
director, again on a noncompensated basis. In
accordance with this arrangement, for the three and
nine month periods ended September 30, 2006, the
company did not pay the Gleasmans any consulting fees
for their services. The company recorded
approximately $225,000 for the estimated value of
these services as a contribution to capital based
upon approved time and hours spent and recorded
$150,000 to research and development and $75,000 to
general and administrative.[2]
    
    During the three and nine month periods ended
September 30, 2006 and 2005 the company paid a member
of the Gleasman family for administrative,
technological and engineering services rendered. The
individual is paid as a consultant for services. For the three and
nine months period ended September 30, 2006 and 2005, this individual
was paid $12,600 and $7,425 and $30,390 and $21,600, respectively. Management believes the rate of compensation is
reasonable.[3]
    
    During the three month and nine month periods ended
September 30, 2005, the company issued to a
stockholder 30,000 and 70,000 common shares as rent
for the companys use of a facility valued at
approximately $83,000 and $225,000 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 three and nine
month periods ended September 30, 2006 and no further
amounts are due under the arrangement.[4]
    
    During the three and nine month periods ended
September 30, 2005 the company incurred approximately
$121,000 and $419,000 for consulting services
provided to the company by outside counsel exclusive
of legal services. There were no charges for the
three and nine month periods ended September 30,
2006.




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12 
 
 
 NOTE E  NOTE PAYABLE
 Notes Payable  Financial Institution
    Period EndingSeptember 30,2007
    
    $
    20,0002008
    
    
    20,0002009
    
    
    20,0002010
    
    
    20,0002011
    
    
    15,000Total Minimum payments
    
    
    95,000Less-amount representing interest
    
    
    19,00076,000Less-Current Maturities
    
    
    14,000Long Term Portion
    
    $
    62,000
 Advance from Shareholder




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13 
 
 Note F  Stockholders (Deficiency ) Equity
 [1] Class A Preferred stock:
    (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 the Preferred Stock Agreement, 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 will be issued. 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.




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14 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [1] Class A Preferred stock: (continued)
    [2] Class B Preferred stock:




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15 
 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [3] Business Consultants Stock Plan:
  [4] Nonmanagement Directors Plan:
       [5] Shares issued for services and rent:




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16 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [6] Business and Financial Consultants:
  [7] Warrants:
  Number ofExercise
    
    
    
    SharesPrice
    
    Expiration
    
    Exercisable$1.52
    
    September 18, 2007
    
    
    2,500
    
    
    (Note F [1])(a)
    
    (a)
    
    
    125,000
    
    
    (a)$.75
    
    None
    
    
    500,000
    
    
    (b )$.01
    
    None
    
    
    756,200
    
    
    (c )$.01
    
    None
    
    
    84,500
    
    
    (d )(e)
    
    (e)
    
    
    (e
    )
    
    (e)$.01
    
    None
    
    
    3,000
    
    
    (f )$5.00
    
    Ten Years
    
    
    210,000
    
    
    (g )$.01
    
    None
    
    
    6,000
    
    
    (h)$.01
    
    None
    
    
    84,182
    
    
    (i)$1.00
    
    None
    
    
    20,500
    
    
    (j)(k)
    
    (k)
    
    
    (k
    )
    
    (k)$.01
    
    10 years
    
    
    2,083
    
    
    (l)$3.27
    
    10 years
    
    
    400,000
    
    
    (m)
 
 (a)
    
    Exercisable only if company has an IPO at the IPO price and
exercisable five years from IPO. To date, the company has not
conducted an 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.




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17 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [7] Warrants: (continued)
 
 (c)
    
    The company has issued 1,325,000 warrants, exercisable at $.01 per share, to a management
consulting firm in accordance with purported agreements between the company and the
management firm. 568,800 warrants were exercised for proceeds of aggregate $5,484 in
accordance with the purported agreements with the management consulting firm. In accordance
with the courts order rendered on May 8, 2006 in connection with the litigation described in
Note I, the company was required to honor immediately the exercise of 40,000 common stock
warrants at $.01 per common share, to issue 245,000 common stock warrants, exercisable at
$.01 per common share and to honor, if and when presented for
exercise, 511,200 previously
issued unexercised warrants (all included in above total). The 40,000 common shares and
245,000 common stock warrants were deposited with the Monroe County, New York Treasurer and
may not be accessed by the firm pending the appellate courts disposition of the companys
appeal of the May 8, 2006 court order. The Company valued the
245,000 warrants at $415,000 using the Black-Scholes option/pricing
model and charged operations. In addition, the exercise by the firm
of the 511,200
unexercised warrants is also stayed pending the company appeal. (See Notes H and I)(d)
    
    The company has issued an aggregate 127,000 warrants to its nonmanagement directors for
services rendered to the Board under its Nonmanagement Directors Stock Plan. For the three
and nine month periods ended September 30, 2006, 0 and 39,750 warrants were issued under the
Plan. The exercise price for each of the warrants is $.01 per share with a 10 year term. No
further warrants are issuable under the Plan as modified by the board of directors on October
13, 2006 (See Note F 4).3,000 and 19,000 warrants have been exercised for the three and nine
months ended September 30, 2006. The company has received proceeds of $390.(e)
    
    During 2005, the company issued 120,000 warrants to a consultant, exercisable at .01 per
share. 48,000 warrants were exercised in 2005. The remaining 72,000 warrants were exercised
on September 11, 2006. The exercise price was $.01 per common share and the company received
proceeds of $720.(f)
    
    In June 2005, the company issued 3,000 warrants to a consultant, exercisable at .01 per share.(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 of these warrants have been exercised through
September 30, 2006.(h)
    
    During 2005, the company issued 6,000 warrants to a
consultant, exercisable for ten years at .01 per share.
None of these warrants have been exercised through September 30, 2006.(i)
    
    During 2005, the company issued 62,500 common stock warrants to investors in connection with
their purchase of 62,500 Class A Preferred, exercisable at $.01 per common share. 50,000
of these warrants were exercised in 2005. During the three and nine month periods ended
September 30, 2006, the company issued 73,682 and 117,432 common
stock warrants with a ten year term to investors
along with their purchase of 78,750 and 162,000 Class A Preferred, exercisable at $.01 per
common share. During the three and nine month periods ended September 30, 2006, 33,250 and
45,750 warrants were exercised for proceeds of $333 and $458, respectively.




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18 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [7] Warrants: (continued)
 
 (j)
    
    During the quarter ended March 31, 2006, one investor purchased 20,500
common stock warrants exercisable at $1.00 per share exercisable for
ten years for a purchase price
at $2,000. None of these warrants have been exercised through September
30, 2006.(k)
    
    On June 19,2006, the company issued 360,000 common stock warrants to a
director for specific services rendered by such director as chairman of
the companys executive committee valued at $629,000 using the
Black-Scholes option/pricing model. These warrants were exercised on
September 1, 2006 and September 11, 2006 at $.01 per common share. The
company received proceeds of $3,600 with an intrinsic value of
1,440,000.(l)
    
    In connection with its business and financial operations for the three
and nine month periods ended September 30, 2006, the company issued
85,333 and 92,833 common stock warrants, exercisable for 10 years at $.01
per common share. During the three month period ended September 30, 2006,
90,750 of these warrants were exercised for proceeds of $908.(m)
    
    On August 28, 2006, the company issued 400,000 common stock warrants
exercisable for ten years at an exercise price of $3.27 per common share
to a business consultant. [8]
    
    Issuance of Stock and Warrants by Subsidiary:The following is a summary of warrants outstanding for the Ice Subsidiary:
 Three and Nine Months EndedSeptember 30,2006
    
    
    2005Outstanding at the beginning of the year
    
    
    103,948
    
    
    
    103,948Granted
    
    
    
    
    
    
    Outstanding at the end of the period
    
    
    103,948
    
    
    
    103,948




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##### Table of Contents



19 
 
 Note F  Stockholders (Deficiency) Equity (continued)
 [9] Shares Issued for Future Consulting Services
   Number of Shares
    
    
    ValueOutstanding at January 1, 2006
    
    
    50,000
    
    
    $
    103,000Shares Issued
    
    
    150,000
    
    
    
    361,000Shares Sold to pay Consultants
    
    
    (164,270
    )
    
    
    (304,000
    )Balance at September 30, 2006
    
    
    35,730
    
    
    $
    160,000
 Note G  Commitments and Other Matters
 [1] Consulting Agreements




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20 
 
 Note G  Commitments and Other Matters (continued)
 [2] Variable Gear, LLC
  [3] Leases:




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21 
 
 Note H  Management Agreement
 th




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22 
 
 Note H  Management Agreement (continued)




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23 
 
 Note I  Litigation




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Note I  Litigation (continued)




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25 
 
 Note K  Subsequent Events
        A. Nonmanagement Directors Plan




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26 B. Commercializing Event Plan
     C. Increase in Number of Business Consultants Shares
    D. Increase in Number of Authorized Common Shares




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27 
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 PLAN OF OPERATION
 Overall Business Strategy
  o
    
    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 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 worldwide, especially in the
Asian, African, South and Central American, and Eastern European
markets.
  o
    
    to continue the ongoing real world testing of our
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;o
    
    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;o
    
    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;o
    
    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;o
    
    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;o
    
    to continue to improve the companys inventions and, where
appropriate, to obtain patent protection on such new
improvements.




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28 
  www.torvec.com
   Current Status of Product Development
  o
    
    the FTVTM, including the steering drive and suspension for tracked vehicles;o
    
    the Iso-TorqueTM differential;o
    
    our infinitely variable transmissions;o
    
    the hydraulic pump and motor;o
    
    spherical gearing constant velocity mechanism;
  o
    
    The Full Terrain Vehicle  The FTV is production-ready and during
the third quarter, 2006, was equipped with a Cummins 4-cylinder,
3.9 liter, 170 horsepower, turbo-charged diesel engine. The
companys discussions with interested parties with respect to the
commercialization of this technology, including but not limited to,
the Chinese, are progressing.o
    
    The Iso-Torque Differential  The Iso-Torque differential is
production-ready. Discussions with interested parties with respect
to the commercialization of this technology on a stand-alone basis
are progressing. However, our FTV requires at least two Iso-Torque
differentials in order to function. Thus, discussions concerning
the sale and/or license of the FTV perforce include discussions
concerning the commercialization of the Iso-Torque.o
    
    The Infinitely Variable Transmission  The IVT is nearly
production-ready. We are refining the electronic controls so that
the unit functions as an infinitely variable transmission, and not
as a multiple step-transmission, in our 2003 diesel-fueled Dodge
Ram 4x4.o
    
    The company has presented a detailed proposal on how its
technologies, specifically its IVT and its Iso-Torque differential,
can benefit New York State, especially with respect to fuel
savings, enhanced safety and reduced pollution generated by
retrofitting approximately 55,000 school buses statewide with a
number of local and statewide representatives. Based upon
discussions we have had to date, we are encouraged that New York
State Legislature will act favorably on our school bus proposal in
the next legislative session.We are continuing our testing which is designed to compare the
fuel efficiently and pollution reduction capabilities of our IVT
versus the fuel consumption and pollution generated by New Yorks
and our nations school buses, the majority which use the same or
comparable diesel-fueled engine as our Dodge Ram 4-X-4. The
comparisons are being made based upon actual school bus routes
furnished to us by local school districts that are actively
collaborating with us on the project. We also are continuing our
testing in our diesel-fueled Dodge Ram 4-X-4 because most of the
automotive markets for our products worldwide make use of and are
committed to diesel-fueled engines. In addition, the United States
automotive industry is awaking to the benefits of diesel.
   Company Expenses




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29 Liquidity And Capital Resources




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30 Critical Accounting Policies
        Impact of Inflation
  Quarterly Fluctuations




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31 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  Forward-Looking Statements
   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.




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32 
 
 Item 4. CONTROLS AND PROCEDURES .
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting




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33 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings




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34        
 Item 1A. Risk Factors .
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds .
  
 Item 3. Defaults Upon Senior Securities .
  
 Item 4. Submission of Matters to a Vote of Security Holders .
  
 Item 5. Other Information .




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A. Nonmanagement Directors Plan
      B. Commercializing Event Plan




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36 C. Increase in Number of Business Consultants Shares
    D. Increase in Number of Authorized Common Shares




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37 
 Item 6. Exhibits
  (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.
 (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 indenturesNone
 (9)
    
    Voting Trust AgreementNone
 (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;




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38 
 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 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;




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39 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 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;




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##### Table of Contents



40 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 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;




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41 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, 2006.10.47
    
    Excerpts from minutes of
the meeting of Board of
Directors Torvec, Inc.,
adopting changes to the
non-management directors
plan creating a
commercialized event plan,
approving an increase in
shares to be issued under
business consulting plan
and adopting
recommendation that
shareholders increase
number of authorized
common shares,
incorporated by reference
to Form 8-K filed on
October 16, 2006.10.48
    
    Letter agreement with
American Continental
Group, LLC, executed on
October 22, 2006,
incorporated in reference
to Form 8-K filed on
October 30, 2006.
 (11)
    
    Statement re computation of per share earnings (loss)Not applicable
 (14)
    
    Code of Ethics(16)
    
    Letter on change in certifying accountantNone
 (18)
    
    Letter re change in accounting principlesNone




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##### Table of Contents



(20)
    
    Other documents or statements to security holders
  (21)
    
    Subsidiaries of the registrant
 
 (22)
    
    Published report regarding matters submitted to vote of security holdersNone(23.1)
    
    Consents of experts and counselEisner LLP Consent(24)
    
    Power of attorneyNone(31)
    
    Rule 13(a)-14(a)/15(d)-14(a) Certifications(32)
    
    Section 1350 Certifications(99)
    
    Additional exhibitsNone




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43 
 
   TORVEC, INC.Date: November 14, 2006
    By:
    /s/ James Y. GleasmanJames Y. Gleasman, Chief Executive Officer  Dated: November 14, 2006
    By:
    /s/ James Y. GleasmanJames Y. Gleasman, Chief Executive Officer andInterim Chief Financial Officer




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44  
 EXHIBIT INDEX
 EXHIBIT
    
    
    
    
    
    PAGE(2)
    
    Plan of acquisition, reorganization, arrangement, liquidation, or succession2.1
    
    Agreement and Plan of Merger, dated November 29, 2000 by and among TorvecSubsidiary Corporation, Torvec, Inc., UTEK Corporation and ICE SurfaceDevelopment, Inc. incorporated by reference to Form 8-K filed November 30, 2000and Form 8K/A filed February 12, 2001.
    
    N/A(3)
    
    Articles of Incorporation, By-laws3.1
    
    Certificate of Incorporation, incorporated by reference to Form 10-SB/A,Registration Statement, registering Company's $.01 par value common stock undersection 12(g) of the Securities Exchange Act of 1934;
    
    N/A3.2
    
    Certificate of Amendment to the Certificate of Incorporation datedAugust 30, 2000, incorporated by reference to Form SB-2 filedOctober 19, 2000;
    
    N/A3.3
    
    Certificate of Correction dated March 22, 2002, incorporated by reference to Form10-KSB filed for fiscal year ended December 31, 2002;
    
    N/A3.4
    
    By-laws, as amended by shareholders on January 24, 2002, incorporated byreferenceto Form 10-KSB filed for fiscal year ended December 31, 2002;
    
    N/A3.5
    
    Certification of Amendment to the Certificate of Incorporation dated October 21,2004 setting forth terms and conditions of Class B Preferred, incorporated byreference to Form 10-QSB filed for fiscal quarter ended September 30, 2004.
    
    N/A(4)
    
    Instruments defining the rights of holders including indenturesNone
    
    N/A(9)
    
    Voting Trust AgreementNone
    
    N/A(10)
    
    Material Contracts10.1
    
    Certain Employment Agreements, Consulting Agreements, certainassignments of patents, patent properties, technology and know-howto the Company, Neri Service and Space Agreement and Ford MotorCompany Agreement and Extension of Term, all incorporated byreference to Form 10-SB/A, Registration Statement, registeringCompany's $.01 par value common stock under section 12(g) of theSecurities Exchange Act of 1934;
    
    N/A




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45 EXHIBIT
    
    
    
    
    
    PAGE10.2
    
    The Company's 1998 Stock Option Plan and related Stock OptionsAgreements, incorporated by reference to Form S-8, RegistrationStatement, registering 2,000,000 shares of the Company's $.01 parvalue common stock reserved for issuance thereunder, effectiveDecember 17, 1998;
    
    N/A10.3
    
    The Company's Business Consultants Stock Plan, incorporated byreference to Form S-8, Registration Statement, registering 200,000shares of the Company's $.01 par value common stock reserved forissuance thereunder, effective June 11, 1999 as amended by referenceto 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 2,500,000shares of the Company's $.01 par value common stock reserved for issuancethereunder, 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/A10.4
    
    Termination of Neri Service and Space Agreement dated August 31,1999, incorporated by reference to Form 10-QSB filed for the quarterended September 30, 1999;
    
    N/A10.5
    
    Operating Agreement of Variable Gear, LLC dated June 28, 2000,incorporated by reference to Form 10-QSB filed for the quarter endedJune 30, 2000;
    
    N/A10.6
    
    License Agreement between Torvec, Inc. and Variable Gear, LLCdated June 28, 2000, incorporated by reference to Form SB-2 filedOctober 19, 2000;
    
    N/A10.7
    
    Investment Agreement with Swartz Private Equity, LLC dated September 5,2000, together with attachments thereto, incorporated by reference to Form8-K filed October 2, 2000;
    
    N/A10.8
    
    Extension of and Amendment to Consulting Agreement with James A. Gleasman,incorporated by reference to Form 10-KSB filed for the fiscal year endedDecember 31, 2000;
    
    N/A10.9
    
    Extension of and Amendment to Consulting Agreement with Keith E. Gleasman,incorporated by reference to Form 10-KSB filed for the fiscal year endedDecember 31, 2000;
    
    N/A10.10
    
    Extension of and Amendment to Consulting Agreement with Vernon E. Gleasman,incorporated by reference to Form 10-KSB filed for the fiscal year endedDecember 31, 2000;
    
    N/A10.11
    
    Option and Consulting Agreement with Marquis Capital, LLC dated February 10,1999, incorporated by reference to Form 10-QSB filed for quarter ended March31, 2001;
    
    N/A




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46 EXHIBIT
    
    
    
    
    
    PAGE10.12
    
    Option and Consulting Agreement with PMC Direct Corp., dated February 10,1999, incorporated by reference to Form 10-QSB filed for quarter ended March31, 2001;
    
    N/A10.13
    
    Investment Banking Services Agreement with Swartz Institutional Finance(Dunwoody Brokerage Services, Inc.) dated December 8, 2000, incorporated byreference to Form 10-QSB filed for quarter ended March 31, 2001;
    
    N/A10.14
    
    Employment Agreement with Michael Martindale, Chief Executive Officer,dated August 1, 2001, incorporated by reference to Form 10-QSB filedfor fiscal quarter ended September 30, 2001;
    
    N/A10.15
    
    Employment Agreement with Jacob H. Brooks, Chief Operating Officer,dated August 1, 2001, incorporated by reference to Form 10-QSB filedfor fiscal quarter ended September 30, 2001;
    
    N/A10.16
    
    Employment Agreement with David K. Marshall, Vice-President ofManufacturing, dated September 1, 2001, incorporated by reference toForm 10-QSB filed for fiscal quarter ended September 30, 2001;
    
    N/A10.17
    
    Investment Banking Services Agreement with SwartzInstitutional Finance (Dunwoody Brokerage Services, Inc.),as amended, dated October 23, 2001, incorporated by reference toForm 10-QSB filed for fiscal quarter ended September 30, 2001;
    
    N/A10.18
    
    Stock Option Agreement with Samuel Bronsky, Chief Financial andAccounting Officer, dated August 28, 2001, incorporated by reference toForm 10-QSB filed for fiscal quarter ended September 30, 2001;
    
    N/A10.19
    
    Pittsford Capital Group, LLC Agreement dated January 30, 2002, incorporatedby reference to Form 10-KSB filed for fiscal year ended December 31, 2001;
    
    N/A10.20
    
    Gleasman-Steenburgh Indemnification Agreement dated April 9, 2002,incorporated by reference to Form 10-KSB filed for fiscal year endedDecember 31, 2001;
    
    N/A10.21
    
    Series B Warrant dated April 10, 2002, incorporated by reference to Form10-KSB filed for fiscal year ended December 31, 2001;
    
    N/A10.22
    
    Billow Butler & Company, LLC investment banking engagement letter datedOctober 1, 2003, incorporated by reference to Form 10-QSB filed for fiscalquarter ended September 30, 2003;
    
    N/A10.23
    
    Letter of Acknowledgement and Agreement with U.S. Environmental ProtectionAgency dated February 4, 2004, incorporated by reference to Form 10-KSBfiled for fiscal year ended December 31, 2003;
    
    N/A




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##### Table of Contents



47 EXHIBIT
    
    
    
    
    
    PAGE10.24
    
    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 endedDecember 31, 2003;
    
    N/A10.25
    
    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 endedDecember 31, 2003;
    
    N/A10.26
    
    Lease Agreement for premises at Powder Mills Office Park, 1169Pittsford-Victor Road, Suite 125, Pittsford, New York 14534, dated July 16,2004, incorporated by reference to Form 10-QSB filed for fiscal quarterended June 30, 2004;;
    
    N/A10.27
    
    Lease Agreement for testing facility and Mustang dynamometer, dated July 21,2004; incorporated by reference to Form 10-QSB filed for fiscal quarterended June 30, 2004;
    
    N/A10.28
    
    Advisory Agreement with PNB Consulting, LLC, 970 Peachtree Industrial Blvd.,Suite 303, Suwanee, Georgia 30024; incorporated by reference to Form 10-QSBfiled for fiscal quarter ended June 30, 2004;
    
    N/A10.29
    
    Agreement between Torvec and ZT Technologies, Inc. dated July 21, 2004,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2004;
    
    N/A10.30
    
    Assignment and Assumption of Lease between William J. Green and Ronald J.Green and Torvec, Inc. effective as of December 31, 2004, incorporated byreference to Form 10-KSB filed for fiscal year ended December 31, 2004;
    
    N/A10.31
    
    Bill of Sale between Dynamx, Inc. and Torvec, Inc. for equipment andmachinery, incorporated by reference to Form 10-KSB filed for fiscal yearended December 31, 2004;
    
    N/A10.32
    
    Lease and Services Agreement between Robert C. Horton as Landlord andTorvec, Inc. as Tenant dated March 18, 2005, incorporated by reference toForm 10-KSB filed for fiscal year ended December 31, 2004;
    
    N/A10.33
    
    Settlement Agreement and Mutual Release between Torvec, Inc. and ZTTechnologies, Inc. dated March 29, 2005, incorporated by reference to Form10-QSB filed for fiscal quarter ended March 31, 2005;
    
    N/A10.34
    
    Advisory Agreement between Robert C. Horton and Torvec, Inc. dated February15, 2005, incorporated by reference to Form 10-QSB filed for fiscal quarterended March 31, 2005;
    
    N/A10.35
    
    Lease and Services Agreement between Dennis J. Trask as Landlord and Torvec,Inc. as Tenant dated April 18, 2005, incorporated by reference to Form10-QSB filed for fiscal quarter ended March 31, 2005;
    
    N/A




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##### Table of Contents



48 EXHIBIT
    
    
    
    
    
    PAGE10.36
    
    Consulting Agreement with Matthew R. Wrona, dated June 30, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter ended June30, 2005;
    
    N/A10.37
    
    Option Agreement between Matthew R. Wrona and Torvec, Inc. dated June 30,2005, incorporated by reference to Form 10-QSB filed for fiscal quarterended June 30, 2005;
    
    N/A10.38
    
    Trust Agreement between Matthew R. Wrona, Donald Gabel, Lawrence Clark,Steve Urbanik, Floyd G. Cady, Jr. and Michael Pomponi as Grantors andRichard B. Sullivan as Trustee, dated September 22, 2005, incorporated byreference to Form 10-QSB filed for fiscal quarter ended September 30, 2005;
    
    N/A10.39
    
    Consultant Agreement with Floyd G. Cady, Jr., dated October 1, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.40
    
    Consultant Agreement with Lawrence W. Clark, dated October 1, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.41
    
    Consultant Agreement with Donald W. Gabel, dated October 1, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.42
    
    Consultant Agreement with Michael A. Pomponi, dated October 1, 2005,incorporated b y reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.43
    
    Consultant Agreement with Steven Urbanik, dated October 1, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.44
    
    Consultant Agreement with Kiwee Johnson, dated September 30, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005;
    
    N/A10.45
    
    Confidentiality Agreement with Joseph B. Rizzo, dated October 24, 2005,incorporated by reference to Form 10-QSB filed for fiscal quarter endedSeptember 30, 2005
    
    N/A10.46
    
    Minutes of meeting Board of Directors Torvec, Inc., held October 19, 2004,creating the non-management directors plan, incorporated by reference toForm 10-KSB for fiscal year ended December 31, 2005
    
    N/A10.47
    
    Excerpts from minutes of the meeting of Board of Directors Torvec, Inc., adoptingchanges to the non-management directors plan creating a commercializes event plan,approving an increase in shares to be issued under business consulting plan andadopting recommendation that shareholders increase number of authorized commonshares, incorporated by reference to Form 8-K filed on October 16, 2006.
    
    N/A10.48
    
    Letter agreement with American Continental Group, LLC executed on October 22, 20,2006, incorporated in reference to Form 8-K filed on October 30, 2006.
    
    N/A




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##### Table of Contents



49 EXHIBIT
    
    
    
    
    
    PAGE(11)
    
    Statement re computation of per share earnings (loss)
    
    N/ANot applicable(14)
    
    Code of Ethics
    
    N/A(16)
    
    Letter on change in certifying accountant
    
    N/ANone(18)
    
    Letter re change in accounting principles
    
    N/ANone(20)
    
    Other documents or statements to security holders
    
    N/ANone(21)
    
    Subsidiaries of the registrant
    
    N/AIce 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/ANone(23)
    
    Consents of experts and counsel
    
    N/A(24)
    
    Power of attorney
    
    N/ANone(31.1)
    
    Rule 13(a)-14(a)/15(d)-14(a) Certifications
    
    51(32)
    
    Section 1350 Certifications
    
    52(99)
    
    Additional exhibits
    
    N/ANone