FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

(Mark One)

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

For the Quarter Ended      March 31, 2001

OR

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

Commission File No.   000-24455

TORVEC, INC.                                     (Exact name of Registrant as
Specified in its Charter)

New York                 	 	16-150951-2                (State or Other Jurisdiction of              (IRS Employer Identification Number)

                Incorporation or Organization)

11 Pond View Drive, Pittsford, New York                          14534   (Address of Principal Executive Offices)                                
    (Zip Code)

Registrant's telephone number, including area code:              (716) 248-8549

Securities registered under Sec. 12(g) of the Act:

$.01 Par Value Common Stock	                       
                                                   
                           (Title of Class)

The Registrant 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 and has been subject to such filing requirements for the past 90 days.

YES  [ X ]               NO [ 
    ]

As of  March 31, 2001, there were outstanding 22,805,492 shares of the company's common stock, $.01 Par Value.  Options for 809,000 shares of the company's common stock are outstanding but have not yet been exercised.  Shares to cover the options
will not be issued until they are exercised.



TORVEC, INC.

(A Development Stage Company)

INDEX



|PART I         | FINANCIAL INFORMATION                                                                                                                                                                                                      | PAGE
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Item 1.        | Financial Statements                                                                                                                                                                                                       |     
|               | Torvec, Inc. Condensed Consolidated Balance Sheets -
December 31, 2000 and March 31, 2001 (unaudited)                                                                                                                      | 3   
|               | Torvec, Inc. Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2001, 
Three Months Ended March 31, 2000, September 25, 1996
September 25, 1996 (Inception) through
March 31, 2001 | 4   
|               | Torvec, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2001,
Three Months Ended March 31, 2000, September 25, 1996
(Inception) through March 31, 2001                     | 5   
|               | Notes to Financial Statements                                                                                                                                                                                              | 6   
|Item 2.        | Plan of Operation                                                                                                                                                                                                          | 11  
|PART II        | OTHER INFORMATION                                                                                                                                                                                                          |     
|Item 1.        | Legal Proceedings                                                                                                                                                                                                          | 16  
|Item 2.        | Changes in Securities                                                                                                                                                                                                      | 20  
|Item 3.        | Defaults Upon Senior Securities                                                                                                                                                                                            | 20  
|Item 4.        | Submission of Matters to a Vote of Security Holders                                                                                                                                                                        | 21  
|Item 5.        | Other Information                                                                                                                                                                                                          | 21  
|Item 6.        | Exhibits and Reports on Form 8-K                                                                                                                                                                                           | 21  
|SIGNATURE PAGE | 25                                                                                                                                                                                                                        
|EXHIBIT INDEX  | 26                                                                                                                                                                                                                        



TORVEC, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | March 31, 2001(Unaudited)                         | December 31, 2000                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------
| | ASSETS
CURRENT ASSETS
        Cash
        Stock subscriptions receivable (collected April 2001 and
          January 2001 respectively)
        Prepaid expenses                                                                                                                                                                                                                                                                                                                                                                                                            | $   41,000
     90,000107,000                     | $34,000
109,000147,000                    
| | Total Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 238,000                                           | 290,000                                   
| | PROPERTY AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                   |                                           
| | Office equipment
        Transportation equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 9,00053,00062,000                                 | 9,00053,00062,000                         
| | LESS: ACCUMULATED DEPRECIATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 39,000                                            | 36,000                                    
| | Net Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 23,000                                            | 26,000                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | LICENSE, NET OF ACCUMULATED AMORTIZATION OF $57,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3,204,000                                         | 3,246,000                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | Total Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $3,465,000                                        | $3,562,000                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | LIABILITIES AND CAPITAL DEFICIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | CURRENT LIABILITIES
        Accounts payable and accrued expenses
        Consulting fees payable to related parties
        Current maturities of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                            | $       124,000
58,0006,000                       | $77,000
665,0006,000                      
| | Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 188,000                                           | 748,000                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | LONG TERM LIABILITIES
     Long-term debt, net of current maturities
     Deferred revenue-long-term                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7,000150,000                                      | 9,000150,000                              
| | Total Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 345,000                                           | 907,000                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | STOCKHOLDERS' EQUITY
     Preferred stock $.01 par value, 100,000,000 shares
        authorized, none issued
     Common stock, $.01 par value, 40,000,000 shares
       authorized, 22,805,492 (including 103,400 shares subject
       to put option) and  21,043,137 (including 63,256 shares
       subject to put option) issued and outstanding at
       March 31, 2001 and December 31, 2000, respectively
     Additional paid in capital
     Deficit accumulated during the development stage
     Unearned Compensation
              Total Stockholders' Equity | 227,000
14,160,000
(11,232,000)
(35,000)3,120,000 | 225,000
13,125,000
(10,695,000)
02,655,000
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                   |                                           
| | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $3,465,000                                        | $3,562,000                                

See Notes to Financial Statements

3

TORVEC, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                                                                           | Three Months
EndedMarch 31, 2001    | Three Months
EndedMarch 31, 2000    | September 25, 1996
(Inception) ThroughMarch 31, 2001
|-------------------------------------------------------------------------- | ----------------------------------- | ----------------------------------- | ----------------------------------------------------
|                                                                           |                                     |                                     |                                                     
|COSTS AND EXPENSES
  Research and development
  General and administrative | 294,000 
243,000 
----------------- | 147,000 
632,000 
----------------- | 3,338,000 
7,894,000 
-------------------           
|Net Loss                                                                   | ($537,000)
==========               | ($779,000)
==========               | ($11,232,000)
===========                           
|Basic and Diluted Loss Per  Share                                          | ($.02)
==========                   | ($0.04)
==========                  |                                                     
|Weighted average number
of shares of common stock
 - basic and diluted     | 22,525,000 
==========              | $21,059,000
==========              |                                                     



See Notes to Financial Statements









|TORVEC, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|------------------------------------------------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Three Months
EndedMarch 31, 2001                                  | Three Months
EndedMarch 31, 2000                                     | September 25, 1996
(inception) ThroughMarch 31, 2001                                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------
| | CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                   |                                                                      |                                                                                              
| | Net loss
     Adjustment to reconcile net loss
     to net cash used in operating activities:
        Depreciation and amortization
        Compensation expense attributable
           to common stock options
        Common stock issued for services
        Contribution of services
        Changes in other current assets
           and current liabilities:
        Decrease in other assets
        Increase/(decrease) in accounts payable
        and accrued expenses
        Increase in deferred revenue
           Net cash (used in) operating activities | ($537,000)
45,000
0
88,000
0
40,000
105,000
0
_________
(259,000) | ($779,000)
3,000
383,000
221,000
0
0
(25,000)
0
__________
(197,000) | ($11,232,000)
96,000
4,513,000
1,665,000
69,000
53,000
847,000
150,000
__________
(3,839,000)
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                   |                                                                      |                                                                                              
| | CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment
     Cost of acquisition
       Net cash (used in) investing activities                                                                                                                                                                                                                                                                                                                                                                                                                        | 00
              0                                                | 00              0                                                    | (62,000)(16,000)
      (78,000)                                                              
| | CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of common stock and
       exercise of options
     Proceeds from long-term borrowings
     Repayment of long-term borrowings
     Distributions
       Net cash provided by financing activities                                                                                                                                                                                                                                                                                                              | 268,000
0
(2,000)0
266,000
________                               | 200,000
0
(2,000)0
198,000
________                                  | 4,310,000
29,000
(16,000)(365,000)3,958,000
_________                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                   |                                                                      |                                                                                              
| | NET INCREASE IN CASH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7,000                                                             | 1,000                                                                | 41,000                                                                                       
| | CASH - BEGINNING OF PERIOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 34,000
________                                                   | 183,000
_________                                                    | 0
_________                                                                                  
| | CASH - END OF PERIOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $41,000
=======                                                   | $184,000
========                                                    | $41,000
========                                                                             

NON-CASH ACTIVITIES:
     During the three-months ended March 31, 2001, consulting fees payable
     of $665,000 were exchanged for 126,667 shares of common stock.

See Notes to Financial Statements

5



TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001



Note 1   Financial Statement Presentation



The information contained herein with respect to the three month periods ended March 31, 2001 and March 31, 2000 and the period from September 25, 1996 (inception) through March 31, 2001 has not been audited but was prepared in conformity with
generally accepted accounting principles for interim financial information and instructions for 10-QSB and Item 310(b) of Regulation S-B.  Accordingly, the condensed financial statements do not include information and footnotes required by generally
accepted accounting principles for financial statements.  Included are ordinary adjustments, which in the opinion of management are necessary for a fair presentation of the financial information for the three month periods ended March 31, 2001 and March
31, 2000, and since inception.  The results are not necessarily indicative of results to be expected for the year.



Note 2   The Company

Torvec, Inc. (the Company) was incorporated in New York on September 25, 1996.  The Company, which is in the development stage, specializes in automotive technology.

On November 29, 2000 the Company acquired Ice Surface Development, Inc. ("Ice").  Ice which is also in the development stages has a license and technology associated with ice removal and adhesion.



Note 3   Summary of Significant Accounting Policies

Consolidation

The financial statements include the accounts of the Company and its wholly owned subsidiary, Ice as at March 31, 2001 and December 31, 2000, and from the date of its acquisition.  All material intercompany transactions and account balances have been
eliminated in consolidation.



Equipment

Equipment is stated at cost less accumulated depreciation.  Depreciation is provided using the straight-line method over the useful lives of the assets.

6





TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

Research, Development and Patents

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



License

The license is being amortized over its remaining life of approximately 19 years, which correlates to an underlying patent.



Revenue Recognition

Revenue in connection with the granting of license to Variable Gear LLC is to be recognized when all conditions specified under recent accounting standards have been met.  Generally, revenue is only recorded when no future performance is required related
to the item.



Note 4   Related Party Transactions

The Company has entered into consulting agreements with members of the Gleasman family.  Included in research and development and general and administrative expenses for the periods ending March 31, 2001 and March 31, 2000 is $112,500 and $112,500
respectively for consulting expenses.

During the quarter ended March 31, 2001 the Company issued 126,667 shares of common stock to the Gleasmans in consideration of the outstanding consulting fees payable to the Gleasmans of $665,000 as of December 31, 2000.  This transaction was authorized
and ratified by the Board of Directors on March 26, 2001.

Note 5  Long-Term Debt

Long-term debt at March 31, 2001 consisted of a note payable in monthly installments of  $610 including interest at 10.13% through March, 2003.  The note is secured by transportation equipment.

7





TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

Note 6   Consultant Stock Plan

The Company's Business Consultant Stock Plan as amended, ("the Plan") provides for the granting of 400,000 shares of the Company's $.01 par value stock, which may be issued from time to time to business consultants and advisors.



For the three months ended March 31, 2001, 26,754 shares were issued under the Plan to consultants in exchange for services and amounts owed to these consultants.  The shares were valued at the market value of the shares at the date of issuance and
approximated $123,000.



Note 7   Equity Funding

In connection with the Company's equity funding commitment from Swartz Private Equity LLC the Company sold 59,865 shares of its common stock for aggregate  proceeds of  approximately $249,000 during the three months ended March 31, 2001.



Note 8   Arbitration



In June, 1999, McElroy filed an amended complaint in the United States District Court for the Northern District of Oklahoma seeking correction  of the inventorship of the subject patents and that the Gleasmans immediately reimburse McElroy for its
expense in the amount of $863,000 plus interest.  In addition, McElroy has demanded that the Company pay out of proceeds generated by sale of its stock the sums demanded of the Gleasmans.

8



TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

Note 8   Arbitration (cont'd)

On March 31, 2000, the Court remanded the case to the arbitrator to clarify certain ambiguities regarding the payment and terms of his April, 1999 decision.  In July, 2000, the arbitrator issued an "Addendum and Clarification Memorandum"
awarding $360,000 to McElroy in partial reimbursement of its expenses.  This amount is to be paid by Vernon and Keith Gleasman, not the Company.

Vernon and Keith Gleasman made an application to the arbitrator to vacate so much of the Addendum which related to the payment of $360,000 to McElroy and, if the application to vacate was not granted, to reopen the hearing before the arbitrator to allow
Vernon and Keith Gleasman to introduce additional evidence regarding their expenses.

In September, 2000, the arbitrator found that Vernon and Keith Gleasman's contentions to reopen the hearing were without merit and therefore denied in all respects Vernon and Keith Gleasman's application to vacate so such of the Addendum as relates to
the payment of $360,000 or, in the alternative, to reopen the hearing to allow them to introduce additional evidence regarding their expenses.

In rendering its decision, the arbitrator stated that the existence of the Company has nothing to do with the lawsuit or the arbitration and that the Gleasmans have an obligation to McElroy and McElroy to the Gleasmans.

Management of the Company believes that certain demands made by McElroy upon the Company constitute a complete misreading of the arbitrator's decision and are without merit since the contract was between the Gleasmans and McElroy, the Company did not
participate in the arbitration proceedings and that the arbitrator's decision did not direct payment of any sums from the Company to McElroy.

Should the Company's position not prevail, it would have an adverse effect on the Company's financial position and results of operations.  No provision for such contingency has been made in the financial statement.

9



TORVEC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

Note 8   Arbitration (cont'd)

In a related matter, the Company together with the Gleasmans, commenced an action in November 2000 in United States District Court for the Northern District of Oklahoma against McElroy.  The complaint sets forth five causes of action
against McElroy based on common - law fraud.  McElroy brought a motion to dismiss the complaint arguing that the action constituted an impermissible collateral attach on a previous arbitration and that the issues presented had already been determined in
arbitration.  The motion to dismiss is pending.



Note 9  Retroactive Adjustment

In the second half of 2000 the Company previously reported revenue from a worldwide license to Variable Gear LLC, which it is changing, based on accounting guidance derived from Staff Accounting Bulletin 101.  Accordingly, deferred revenue and deficit
accumulated during development stage have been increase by $11,000 as of December 31, 2000.

Note 10  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.  At March 31, 2001 such fair market value cannot yet be reasonably
estimated.

10

TORVEC, INC.
PLAN OF OPERATION

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Financial Statements and the Notes thereto included in this report.  This discussion contains certain forward-looking statements that involve
substantial risks and uncertainties.  When used in this report, the words "anticipate", "expect" and similar expressions as they relate to the company or its management are intended to identity such forward-looking statements.  The company's actual
results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements.  Historical operating results are not necessarily indicative of the trends in operating results for any further period.

The company's overall business strategy relating to its automotive inventions is

|  |                                                                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | to manufacture, market and sell, either directly, through others or jointly, the
FTVÔ
 to domestic and foreign customers, especially in the Asian, African, South
and Central American markets; and                                                             
|o | to manufacture, market and sell, either directly, through others or jointly, its
hydraulic pump and motor, its constant velocity joint and its infinitely variable
transmission to automotive and truck manufacturers, suppliers and component
parts assemblers.

The company's plan of operation relative to its automotive inventions over the next 12 months is

|  |                                                                                                                                                                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | to complete the infinitely variable transmission prototype by mid to late summer;                                                                                                                                                                                                                      
|o | to install the infinitely variable transaction into a company owned vehicle and
begin testing to document actual emission levels and fuel economy;                                                                                                                                                     
|o | to initiate discussions with national and state environmental agencies in the
United States and other countries to quantify exact fuel savings and emissions
levels and to determine the potential effect of the infinitely variable transmission
on the worldwide problem of diesel engine pollutants;
|o | to install the constant velocity joint, including its spherical gearing, into a
company owned vehicle and to test and evaluate its actual operation;                                                                                                                                                   
|o | to incorporate all of the company's completed prototypes into the FTVÔ
;                                                                                                                                                                                                                               



11





|o | continue negotiations with selected automotive and truck manufacturers to generate a letter of intent with respect to either a license, merger or joint partnership for the continued development and testing of all of the company's prototypes, their
manufacture, their marketing and their worldwide sale;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | to continue to improve the company's inventions and, where appropriate, to obtain patent protection on such new improvements.                                                                                                                                                                                 

While it is not management's preferred strategy, the company continues to investigate the possibility of manufacturing the FTV itself.  The company has
investigated and is investigating potential sites in Rochester, New York and other communities.  The company as, as yet, not found a facility suitable for manufacturing commercial quantities of the FTV itself.  During the next 12 months, management will
continue to attempt to locate a suitable facility.  The company has engaged in preliminary discussions with a number of financial institutions to formulate a financial package which, together with government based incentives, will enable the company to
pursue this approach with the actual production of the vehicle.  The company believes that it will need at least 12-15 million dollars initially in order to pursue this possibility.  Management is presently investigating ways in which to acquire this
amount of money, including the proceeds from Swartz as well as additional equity and/or debt financing.  However, no specific financial package with banks or other lenders has been negotiated to date.  If a suitable facility is found in the next 12
months, management will reinstitute discussions to obtain financing to acquire, refurbish, modernize, equip and staff such a facility.

On April 25, 2000, the company inaugurated its website, www.torvec.com, for marketing, sales, education and information relating to the company's inventions.

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 purchase the 51% membership interest not owned.  Variable Gear is owned 51% by Robert C. Horton, Chairman and CEO of
Ultrafab, Inc. and a company shareholder.  The company owns the remaining 49%.  The company does not share in any profit or losses in this entity.  Variable Gear has initiated discussions with a number of boat manufacturers, but to date, it has not
commenced operations or sublicensed our automotive technology in its markets.

The company's overall business strategy relating to its ice technology is to:

|  |                                                                                                                                                                                                      
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | develop, in cooperation with Dr. Petrenko at Dartmouth, under his one
year consulting agreement, commercially viable de-icing and
ice adhesion systems for land-based motorized vehicle applications;





|o | to enter into appropriate licensing/joint venture arrangements; and         
|- | ----------------------------------------------------------------------------
|o | to otherwise promote utilization of the company's ice technology world-wide.

The company's license agreement with Dartmouth 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.  Based upon industry discussions, the company anticipates that it will
sublicense, joint-venture or otherwise commercialize this technology within the next 12 months.

The net loss for the three months ended March 31, 2001 was $537,000 as compared to the three months ended March 31, 2000 net loss of $779,000.   The decrease in
the net loss of $242,000 is principally related to a decrease in the amortization of unearned compensatory stock.  The amortization, which is a non-cash item, amounted to $0 for the three months ended March 31, 2001 compared to $383,000 for the three
months ended March 31, 2000.

Research and development expenses for the three months ended March 31, 2001 amounted to $294,000 as compared to $100,000 for the three months ended March 31,
2000.   This increase amounted to $194,000 and is due to increases in the amounts spent associated with improvements to the FTV and amounts spent on the transmission.

General and administrative expenses for the three months ended March 31, 2001amounted to $243,000 as compared to $679,000 for the three months ended March 31,
2000.  This decrease amounted to $436,000 and is primarily due to a decrease in unearned compensatory stock previously discussed.

13





Liquidity and Capital Resources

The company's operations during the quarter ended March 31, 2001 were funded through the sale of 76,650 shares of common stock to Swartz for aggregate proceeds of
approximately $268,000.  We estimate that at the current market prices, and our daily trading volume, we will be able to sell additional shares to Swartz during the next twelve months.

During the quarter ended March 31, 2001 the company issued 26,754 shares to business consultants under its Business Consultants Stock Plan in exchange for
ongoing corporate legal services, internal accounting services, expenses associated with our two lawsuits, marketing research expenses as well as legal fees and associated expenses for ongoing patent work.

Based upon the above, the company anticipates that the funding it will receive from Swartz as well as its continuing issuance of shares under its Business
Consultants Stock Plan will be adequate to fulfill its needs during the next 12 months.  However, the company also recognizes, based on its currently proposed plans and assumptions relating to its operations (including assumptions regarding the nature and
extent of its prototype development program, its testing program, the ability of the company to secure adequate manufacturing and distribution relationships and market acceptance of the company's products) that, over the next twelve months, the company
may be required to seek additional financing in the form of a significant equity investment by one or more investors in privately-negotiated transactions or through debt-financing or both.

The company's cash position at any time during the quarter ended March 31, 2001 was directly dependent upon its success in selling stock since the company did
not generate any revenues.  This trend is expected to continue throughout fiscal 2001.

The company has an obligation to purchase 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 contributions of cash flows from operations, financing and strategic alliances will produce sufficient cash flow to fund
this obligation.

14

Y2K Compliance

The company currently uses a software which management believes is in "Year 2000" (Y2K) compliance.  Management will continue to evaluate the current software and
implement any necessary changes to remain in "Year 2000" (Y2K) compliance.

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, 2001.

Quarterly Fluctuations

As of March 31, 2001, the company had not engaged in significant 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.



15





|PART II
OTHER INFORMATION
|-------------------------
|                         
|Item 1.                  
|                         
|                         
|                         
|                         
|                         
|                         



16



| | On June 3, 1999, MMI, by letter addressed to the Gleasmans' personal counsel, demanded that the Gleasmans reimburse MMI immediately for its expenses in the
amount of  $862,699.61, plus interest, to be paid from any monies received by the Gleasmans on account of the subject patents including, but not limited to, 20 % of all royalties or monies received by the Gleasmans from the sale of shares of stock in the
company.  Further, MMI demanded that the Gleasmans correct inventorship of the subject patents by requesting the Commission of Patents & Trademarks to issue a Certificate of Correction adding A.H. "Chip" McElroy, II and Dave Porter as co-inventors on
the subject patents.  While correction of inventorship was not addressed in the decision, such correction, if appropriate, is desirable and possible, and can be accomplished by application to the Commissioner of Patents and Trademarks.  MMI did not
contest the arbitrator's determination that the patents were assigned to the Gleasmans and are now owned by the company.  In the same letter, MMI demanded that the company pay, out of proceeds generated by sale of its stock, the same sums demanded of the
Gleasmans and notify any licensee, assignee or investor of MMI's right to recover expenses and its 20% interest in monies received on account of the subject patents.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 15, 1999, MMI filed its amended complaint in the United States District Court for the Northern District of Oklahoma.  There were two causes of action.
The first cause of action sought correction of the inventorship of the subject patents.   The second cause of action sought an order confirming the arbitrator's award and, in addition, sought an order directing that the Gleasmans reimburse MMI immediately
for its expenses in the amount of $862,699.61 plus interest accruing from the date of the arbitrator's award.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | On March 31, 2000, the Court remanded the case to the arbitrator to clarify certain ambiguities regarding the payment and terms of his April 22, 1999 decision.
On July 10, 2000, the arbitrator issued an "Addendum and Clarification Memorandum" awarding $360,000 to MMI in partial reimbursement of its expenses.  This amount is to be paid by Vernon and Keith Gleasman, not the company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Vernon and Keith Gleasman made an application to the arbitrator to vacate so much of the Addendum which related to the payment of $360,000 to MMI and if the
application to vacate was not granted, to reopen the hearing before the arbitrator to allow Vernon and Keith Gleasman to introduce additional evidence regarding their expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





17

| | On September 25, 2000, the arbitrator found that Vernon and Keith Gleasman's contentions to reopen the hearing were without merit and therefore denied in all
respects Vernon and Keith Gleasman's application to vacate so such of the Addendum as relates to the payment of $360,000 or, in the alternative, to reopen the hearing to allow them to introduce additional evidence regarding their expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In rendering its decision, the arbitrator stated that the existence of Torvec, Inc. has nothing to do with the lawsuit or the arbitration and that the Gleasmans
have certain obligations to MMI and MMI to the Gleasmans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | As indicated above, the company is not a party to this litigation.  Moreover, the arbitrator's statements made in his September 25, 2000 decision reinforce
management's belief that the demands (of reimbursement and a 20% interest in monies received) made by MMI upon the company (expressed only in a letter from MMI's counsel) constitute a complete misreading of the arbitrator's decision and are without merit
procedurally as well as substantively, since among other reasons, the contract was between the Gleasmans and MMI, the company did not participate in the arbitration proceedings and that the arbitrator's decision did not direct payment of any sums from the
company to MMI.                                                                                                                                                                                   
| | (b)     The Company's Lawsuits
(i)     On November 14, 2000, the company joined with Vernon and Keith Gleasman, as plaintiffs, in filing a lawsuit against McElroy
Manufacturing, Inc., Arthur H. McElroy, II and Tri-Mc (collectively, "MMI") in the United States District Court for the Northern District of Oklahoma.
Under the October 10, 1991 Agreement between MMI and the Gleasmans, McElroy was to manufacture from one to five prototypes of an hydraulic pump and motor designed
by the Gleasmans for use in a continuously variable gear transmission also designed by them.  The hydraulic pump and motor designed by the Gleasmans necessitated a constant velocity joint in order to be marketable, and the Gleasmans utilized a gimbal in
their designs for the constant velocity joint.  The designs and related technology were patented under U.S. Patent No. 5, 440,878.
| | MMI manufactured a first-generation prototype of the pump and motor using a gimbal for the constant velocity joint.  However, after such manufacture, on numerous
occasions, MMI stated to the Gleasmans that the first-generation prototype pulsated or oscillated during operation of the motor which rendered the pump and motor inoperable for its stated purposes and, thus, unmarketable, and that the gimbal was the
source of the pulsation or oscillation.                                                                                                                                                                                                                                                                                                                                                                                                                          



18





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the summer of 2000, the company's engineers, based upon CAD/CAM studies, discovered that the first generation gimbal did not pulsate or oscillate.  The
Gleasmans and the company's management only then concluded that MMI had been misleading the Gleasmans, the company and the Court concerning the operability of the prototype of the pump and motor design which utilized the gimbal as a constant velocity joint.
As the result of such discovery, management of the company believes that MMI's earlier statements regarding the inoperability of the gimbal were false and
fraudulent and that MMI knew that the first-generation pump and motor utilizing a gimbal as the constant velocity joint, as specifically designed by the Gleasmans, did not pulsate or oscillate but was instead a valuable and marketable pump and motor
system which could have been rapidly commercialized.
Management therefore believes that the company has been harmed by MMI in the following important respects:
| | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | By reason of the foregoing, management believes that MMI is liable to the plaintiffs for considerable compensatory and punitive damages in an amount to be
determined at trial.  The plaintiffs have demanded a jury trial with respect to this litigation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | On January 2, 2001, MMI moved to dismiss the plaintiffs' complaint on the grounds that it constituted an impermissible collateral attack on the arbitration award
of April 22, 1999 and July 10, 2000.  Moreover, MMI alleged that the plaintiffs' fraud claims were reviewed and rejected by the arbitrator.
19                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





|        | On January 31, 2001 plaintiffs responded to MMI's motion to dismiss.  In its papers, the plaintiffs stated that the fraud complained of was never at issue in the
arbitration proceedings and that inasmuch as the company was not a party to the arbitration, it should be permitted a full and fair opportunity to litigate its claims.
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                          
|        | The company seeks compensatory and punitive damages against the defendant(s) in an amount to be determined at trial and has demanded a jury trial.  The complaint
has been filed but defendant(s) have yet to respond.                                                                                                                   
|Item 2: | Changes in SecuritiesNone                                                                                                                                                                                                                                                                                                                
|Item 3. | Defaults Upon Senior Securities
None
20                                                                                                                                                                                                                                                                                                  

|Item 4. | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                           
|        | None                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                           
|Item 5. | Other Information                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                           
|        | None                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                           
|Item 6. | Exhibits and Reports on Form 8-K                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                           
|        | a.                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                           
|        | The following Exhibits, as applicable, are attached to this Quarterly Report  (Form 10-QSB)  The Exhibit Index is found on the page immediate succeeding the Signature Page and the Exhibits follow on the pages immediately succeeding the Exhibit Index.
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           

21

| |  |      | 3.3                                                             | Certificate of Amendment to the Certificate of Incorporation dated August 30, 2000, incorporated by reference to Form SB-2 filed October 19, 2000.                                                                                                                                                                                                                                                                                                           
| |  | ---- | --------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |      |                                                                
| |  | (4)  | Instruments defining the rights of holders including indentures
| |  |      |                                                                
| |  |      | None                                                           
| |  |      |                                                                
| |  | (5)  | Opinion re: Legality                                           
| |  |      |                                                                
| |  |      | None                                                           
| |  |      |                                                                
| |  |      |                                                                
| |  | (8)  | Opinion re: Tax Matters                                        
| |  |      |                                                                
| |  |      | None                                                           
| |  |      |                                                                
| |  | (9)  | Voting Trust Agreement 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 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 shares of the Company's $.01 par value common stock reserved for issuance thereunder, effective October 5, 2000;

22

| |  |      |                                                       |                                                                                                                                                                        
| |  | ---- | ----------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |      | 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                                                  | 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. 
| |  |      |                                                       |                                                                                                                                                                        
| |  |      | 10.8                                                  | 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. 
| |  |      |                                                       |                                                                                                                                                                        
| |  |      | 10.9                                                  | 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.
| |  |      |                                                       |                                                                                                                                                                        
| |  |      | 10.10                                                 | Option and Consulting Agreement with Marquis Capital, LLC dated February 10, 1999;                                                                                     
| |  |      |                                                       |                                                                                                                                                                        
| |  |      | 10.11                                                 | Option and Consulting Agreement with PMC Direct Corp., dated February 10, 1999;                                                                                        
| |  |      |                                                       |                                                                                                                                                                        
| |  |      | 10.12                                                 | Investment Banking Services Agreement with Swartz Institutional Finance (Dunwoody Brokerage Services, Inc.) dated December 8, 2000.                                    
| |  |      |                                                      
| |  | (11) | Statement re computation of per share earnings (loss)
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      
| |  | (15) | Letter re unaudited interim financial information    
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      

23

| |    | (18)                                                                                                                                                                                                                         | Letter re change in accounting principles                               
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (19)                                                                                                                                                                                                                         | Report furnished to security holders                                    
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (22)                                                                                                                                                                                                                         | Published report regarding matters submitted to vote of security holders
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (23)                                                                                                                                                                                                                         | Consents of experts and counsel                                         
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (24)                                                                                                                                                                                                                         | Power of attorney                                                       
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (99)                                                                                                                                                                                                                         | Additional exhibits                                                     
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                             
| | b. | Reports Filed on Form 8-K                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                             
| |    | A Current Report on Form 8-K was filed by the company on February 12, 2001 to present certain financial and pro forma financial information in connection with the company's acquisition of ICE Surface Development, Inc.
24



SIGNATURES



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

|      |              |     | TORVEC, INC.                                                                            
|----- | ------------ | --- | ----------------------------------------------------------------------------------------
|DATE: | May 21, 2001 | By: | /S/ KEITH E. GLEASMAN           Keith E. Gleasman
President                             
|      |              |     |                                                                                         
|DATE: | May 21, 2001 | By: | /S/ SAMUEL M. BRONSKY           Samuel M. Bronsky
Chief Financial and Accounting Officer



25



EXHIBIT INDEX

|Exhibit |  | Page
|------- |  | ----
|        |  |     

| | (1) | Investment Agreement                                                         
| | --- | -----------------------------------------------------------------------------
| |     |                                                                              
| |     | 1.1                                                                          
| |     |                                                                              
| | (2) | Plan of Acquisition, reorganization, arrangement, liquidation, or succession.
| |     |                                                                              
| |     | 2.1                                                                          
| |     |                                                                              
| | (3) | Articles of Incorporation, By-laws                                           
| |     |                                                                              
| |     | 3.1                                                                          
| |     |                                                                              
| |     | 3.2                                                                          
| |     |                                                                              
| |     | 3.3                                                                          
| |     |                                                                              
| | (4) | Instruments defining the rights of holders including indentures              
| |     |                                                                              
| |     | None                                                                         
| |     |                                                                              
| | (5) | Opinion re: Legality                                                         
| |     |                                                                              
| |     | None                                                                         
| |     |                                                                              
| |     | 26                                                                           
| |     | (8)                                                                          
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     | (9)                                                                          
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     | (10)                                                                         
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              
| |     |                                                                              

27

| |  |      | 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                                                  | 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
| |  |      |                                                       |                                                                                                                                                                                                                                         
| |  |      | 10.8                                                  | 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 
| |  |      |                                                       |                                                                                                                                                                                                                                         
| |  |      | 10.9                                                  | 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
| |  |      |                                                       |                                                                                                                                                                                                                                         
| |  |      | 10.10                                                 | Option and Consulting Agreement with Marquis
Capital, LLC dated February 10, 1999;                                  30                                                                                                                  
| |  |      |                                                       |                                                                                                                                                                                                                                         
| |  |      | 10.11                                                 | Option and Consulting Agreement with PMC
Direct Corp., dated February 10, 1999;                                 37                                                                                                                      
| |  |      |                                                       |                                                                                                                                                                                                                                         
| |  |      | 10.12                                                 | Investment Banking Services Agreement with
Swartz Institutional Finance (Dunwoody Brokerage
Services, Inc.) dated December 8, 2000.                                44                                                                   
| |  |      |                                                      
| |  | (11) | Statement re computation of per share earnings (loss)
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      
| |  | (15) | Letter re unaudited interim financial information    
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      
| |  | (18) | Letter re change in accounting principles            
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      
| |  | (19) | Report furnished to security holders                 
| |  |      |                                                      
| |  |      | Not applicable                                       
| |  |      |                                                      

28

| |    | (22)                                                                                                                                                                                                                         | Published report regarding matters submitted to vote of security holders
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (23)                                                                                                                                                                                                                         | Consents of experts and counsel                                         
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (24)                                                                                                                                                                                                                         | Power of attorney                                                       
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                              |                                                                         
| |    | (99)                                                                                                                                                                                                                         | Additional exhibits                                                     
| |    |                                                                                                                                                                                                                              |                                                                         
| |    |                                                                                                                                                                                                                              | Not applicable                                                          
| |    |                                                                                                                                                                                                                             
| | b. | Reports Filed on Form 8-K                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                             
| |    | A Current Report on Form 8-K was filed by the company on
February 12, 2001 to present certain financial and pro forma
financial information in connection with the company's
acquisition of ICE Surface Development, Inc.
29





OPTION AND CONSULTING AGREEMENT

February 10, 1999

Mr. Keith E. Gleasman, President
Torvec, Inc.
11 Pondview Drive
Pittsford, NY 14534
Dear Mr. Gleasman:
       This will confirm the arrangements, terms and conditions pursuant to which Marquis Capital LLC, a Colorado Limited Liability Corporation (the "Consultant"), has been retained to serve Torvee, Inc. ("Torvec") as a
consultant on a non-exclusive basis for a period of one (1) year commencing as of the date of this agreement.  The undersigned hereby agrees to the following terms and conditions.

1.  Duties of Consultant. Consultant shall, at the request of Torvec, upon reasonable notice, render the following services to Torvec from time to time:

a)  Consulting Services.  The consultation services shall consist of providing consulting advice in respect of financial corporate finance,
public relation matters, review of company and its subsidiaries respective historical financial performance and corporate finance objectives.  Consultation services to be rendered by the Consultant shall be conducted on a "best efforts" basis and
Consultant has not, cannot and does not guarantee that Consultant efforts will have any impact on Company's business or that any subsequent financial improvement will result from Consultant's efforts.

2. Expenses.  Torvec shall reimburse Consultant for any and all reasonable expenses incurred by Consultant in the performance of its duties hereunder upon submission of reasonably satisfactory
documentation to Torvec of such cost or expense.

3.  Grant of Option; Reservation of Shares.        In further consideration of the Consulting Services, Torvec hereby grants to the Consultant the continuing
right and option (the "Option") to purchase from Torvec, at any time or from time to time during the Exercise Period (as defined below), up to an aggregate of TWO HUNDRED AND FIFTY THOUSAND (250,000) shares of Common Stock (the "Option Shares") upon the
terms and conditions herein set forth.  Torvec shall at all times during the Exercise Period keep reserved and available for issuance upon exercise of the option the total number of Options Shares then subject to the option.

30



4. Exercise Price.  The Option shall be exercisable with respect to the TWO HUNDRED AND FIFTY THOUSAND (250,000) Option Shares issuable upon exercise of the Option for an exercise price equal to
$5.00 per Option Share.  The Option Shares, when issued upon payment of the applicable exercise price (the "Exercise Price"), shall be validly issued, fully paid and non-assessable and free from all liens, charges, taxes or other encumbrances.

5. Term of Option.  The Option shall be exercisable in whole or in part during the period (the "Exercise Period") commencing on the date hereof and ending on February 10, 2004.  Upon expiration of
the Option, the Option shall be of no further force and effect.

6. Mechanics of Exercise.  To exercise the Option, Consultant shall, at any time or from time to time during the Exercise Period, deliver to Torvec, (i) a written notice of exercise (each an
"Exercise Notice") stating the number of Option Shares with respect to which the Option is then being exercised, which number shall not be less and 1,000 Option Shares; and (ii) the Exercise Price payable in respect to the Option Shares which are the
subject of such Exercise Notice.  The Option shall be deemed to be exercised with respect to the Option Shares stated in an Exercise Notice, and such Option Shares shall be deemed to be issued (whether or not a certificate representing such Shares has
been delivered to Consultant), at the time such Option Notice and Exercise Price is received by Torvec.

7.  Non-Transferability.  The Option and the rights attendant thereto may be assigned, pledged, hypothecated or otherwise transferred by Consultant in its sole discretion at any time, in
whole or in part.

8.  Registration; Registration Rights.  Torvec hereby covenants and agrees that Consultant shall have the right to cause Torvec to register under the Securities Act of 1993, as amended
(the "Securities Act") the offer and sale of the Option Shares issuable upon the exercise of the Option in accordance with the procedures set forth in Appendix A attached hereto.

9. Non-Exclusive Services.  Torvec understands that Consultant is currently providing certain advisory and financial consulting services to other individuals and entities and agrees
that Consultant is not prevented or barred from rendering services of the same nature or a similar nature to any other individuals or entities and acknowledges that such services may from time to time conflict with the timing of and the rendering of the
Consultation Services.  In addition, Consultant understands and agrees that Torvec shall not be prevented or barred from retaining other persons or entities to provide services of the same or similar nature as those provided by Consultant.

31



10.  Consultant Not an Agent or Employee.  Consultant's obligations under this Agreement consist solely of the services described herein.  In no event shall Consultant be considered to be acting
as an employee or agent of Torvec or otherwise representing or binding Torvec.  For the purposes of this Agreement, Consultant is an independent contractor.  All final decisions with respect to acts of Torvec or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant hereunder, shall be those of Torvec or such affiliates and Consultant shall, under no circumstances, be liable for any expenses incurred or losses suffered by Torvec as a
consequence of such actions.  Consultant agrees that all of his work product relating to the Services to be rendered pursuant to this agreement, shall become the exclusive property of Torvec.  The parties acknowledge that the Consultation Services
provided by the Consultant hereunder are not in connection with the offering or sale of securities of Torvec in a capital raising transaction.

11.  Confidentiality.  Except in the course of the performance of its duties hereunder, Consultant agrees that it shall not disclose any trade secrets, know-how, or other proprietary
information not in the public domain learned as a result of this Agreement or otherwise unless and until such information becomes generally known.

12.  Indemnification.

a) Torvec will indemnify and hold harmless Consultant from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation reasonable attorneys' fees and costs incurred in the investigation, defense and settlement of the matter) suffered or incurred by Consultant which arise out of this Agreement or otherwise out of the performance by
Consultant of its obligations hereunder, unless such losses, claims, damages, liabilities or expenses are found by a final determination of a court of competent jurisdiction to have arisen out of bad faith, gross negligence or malfeasance of the
Consultant in performing his services hereunder (pending any such final determination, the indemnification and reimbursement provision of this Agreement shall apply and Torvec is obligated to reimburse the Consultant for his expenses if it is ultimately
determined that the Consultant was not entitled to indemnification hereunder). If for any reason the foregoing indemnification is unavailable to the Consultant, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or
payable by the Consultant as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect not only the relative benefits received by the Torvec on the one hand and the Consultant on the other hand, but also
the relative fault of Torvec and the Consultant, as well as any other relevant equitable considerations.  The reimbursement indemnity and contribution obligations of Torvec under this paragraph shall be in addition to any liability which the Company may
otherwise have and shall be binding and inure to the benefit of any respective successors, assigns, heirs and personal representatives of Torvec and Consultant.

32



(b) Consultant agrees to give Torvec an opportunity to participate in the defense or preparation of the defense of any action
brought against Consultant to enforce any such claim or liability and Torvec shall have the right to participate.

13. Governing Law.  This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the laws of said State.

14. Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original and all of which when taken together shall constitute one agreement.

15. This Agreement supersedes and cancels prior Consulting Warrant Agreements between Torvec and Todd Roberti and Lawrence Principato.



| | /S/ KEG      Initial  
| | ----------------------
| | /S/ R          Initial
| | /S/ LR        Initial 



| | In Witness Whereof, this Agreement is executed on the date first above written.                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | Very truly yours,
Marquis Capital, LLC a Colorado limited liability company
By:     /S/ LISA ROBERTI
              Lisa Roberti, General Partner
|
|

AGREED AND ACCEPTED:
Torvec, Inc.

By:   /S/ KEITH E. GLEASMAN
         Keith E. Gleasman, President



33

Appendix A

REGISTRATION PROCEDURES

1.        Registration.

a.       Demand Registration. Consultant may at any time, on any two separate occasions,
from August 10, 1999 hereof until February 10, 2004, request that Torvec, at Torvec's sole cost and expense (other than the fees and disbursements of counsel for Consultant and the underwriting discounts, if any, payable in respect of the Option Shares
sold by Consultant) register the sale of all or part of the Option Shares. Upon receipt of any such request, Torvec shall as promptly as practicable, prepare and file with the Commission a registration statement sufficient to permit the public offering
and sale of the Option Shares through the facilities of the Nasdaq National Market or any other securities exchange, if any, on which the Common Stock is being sold or on the over-the-counter market, and will use its reasonable best efforts through its
officer, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable.

b.       Piggyback Registration.  In addition to Torvec's obligation under Section 1.a.
of this Appendix A and not in limitation thereof, Torvec shall give Consultant at least 30 days' prior written notice of each filing by Torvec of a registration statement (other than a registration statement on Form S-4 or Form S-8 or on any successor
form thereto) with the Commission.  If requested by Consultant in writing at any time and from time to time, from the date hereof until February 10, 2004, within 20 days after receipt of any such notice, Torvec shall, at Torvec's sole expense (other than
the fees and disbursements of counsel for Consultant, and the underwriting discounts, if any, payable in respect of the Option Shares sold by Consultant), register all or, at Consultant's option, any portion of the Option Shares, concurrently with the
registration of such other securities, all to the extent requisite to permit the public offering and sale of the Option Shares through the facilities of the Nasdaq National Market or any other securities exchange, if any, on which the Common Stock is
being sold or on the over-the- counter market, and will use its reasonable best efforts through its officer, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable.  For purposes of this
Appendix A "Option Shares" shall not include Options Shares which have been previously sold pursuant to a registration statement or Rule 144 promulgated under the Securities Act.  If, the managing underwriter of any such offering shall determine and
advise Torvec that, in its opinion, the distribution of all or a portion of the Option Shares requested to be included in the registration concurrently with the securities being registered by Torvec would materially adversely affect the distribution of
such securities by Torvec then Torvec will include in such registration first, the securities that Torvec proposes to sell and second, the Option Shares requested to be included in such registration, to the extent permitted by the managing underwriter.
In the event, Torvec is advised by the staff of the Commission, NASDAQ, self-regulatory or state securities agency that the inclusion of the Option Shares will prevent, preclude or materially delay the effectiveness of a registration statement filed,
Torvec, in good faith, may amend such registration statement to exclude the Option Shares.

34



c.        In the event of a registration pursuant to the provisions of this Appendix A, Torvec shall use its reasonable
best efforts to cause the Option Shares so registered to be registered of qualified for sale under the securities or blue sky laws of such jurisdictions as Consultant may reasonably request; provided, however, that Torvec shall not be required to qualify to do business in any state by reason of this paragraph d. in which is not otherwise required to qualify to do business.

d.        Torvec shall keep effective any registration or qualification contemplated by this Appendix A and shall from
time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication until the earlier of (i) one year from the effective date thereof and (ii) the date on which all
Option Shares issuable upon the exercise of the Option covered by such registration statement shall have been sold.

e.        In the event of a registration pursuant to the provisions of this Appendix A, Torvec shall furnish to
Consultant such reasonable number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), of each prospectus contained in such registration statement and each supplement or amendment
thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Securities Act and the rules and regulations thereunder, and such other documents, as Consultant may reasonably request to facilitate the disposition of
the Option Shares included in such registration.

f.       Torvec shall notify Consultant promptly when such registration statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been field.

g.       Torvec shall advise Consultant, promptly after it shall receive notice or obtain knowledge of the issuance of
any stop order by the Commission suspending the effectiveness of such registration statement, or the initiation or threatening of any proceeding for that purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.

35



h.       Torvec shall promptly notify Consultant at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, would include an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the reasonable request of Consultant prepare and furnish to it such number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers or such Option Shares or securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made.

i.        If requested by the underwriter for any unwritten offering of Option Shares, Torvec
and Consultant will enter into an underwriting agreement with such underwriter for such offering, which shall be reasonably satisfactory in substance and form to Torvec, Torvec's counsel, Consultant, Consultant's counsel and the underwriter, and such
agreement shall contain such representations and warranties by Torvec and Consultant and such other terms and provisions as are customarily contained in an underwriting agreement with respect to secondary distributions solely by selling stockholders,
including, without limitation, indemnities substantially to the effect and to the extent provided in Section 2 of this Appendix A.

j.       Torvec agrees that until all the Option Shares have been sold under a registration
statement or pursuant to Rule 144 promulgated under the Securities Act, it shall upon becoming subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), use its reasonable best efforts to keep current
in filing all reports, statements and other materials required to be filed with the Commission to permit Torvec to maintain its eligibility to use a Form S-3 registration statement and to permit Consultant to sell the Option Shares under Rule 144.

36





OPTION AND CONSULTING AGREEMENT

February 10, 1999

Mr. Keith E. Gleasman, President
Torvec, Inc.
11 Pondview Drive
Pittsford, NY 14534
Dear Mr. Gleasman:
       This will confirm the arrangements, terms and conditions pursuant to which PMC Direct Corp. (the "Consultant"), has been retained to serve Torvee, Inc. ("Torvec") as a consultant on a non-exclusive basis for a
period of one (1) year commencing as of the date of this agreement.  The undersigned hereby agrees to the following terms and conditions.

1.  Duties of Consultant. Consultant shall, at the request of Torvec, upon reasonable notice, render the following services to Torvec from time to time:

a)  Consulting Services.  The consultation services shall consist of providing consulting advice in respect of financial corporate finance,
public relation matters, review of company and its subsidiaries respective historical financial performance and corporate finance objectives.  Consultation services to be rendered by the Consultant shall be conducted on a "best efforts" basis and
Consultant has not, cannot and does not guarantee that Consultant efforts will have any impact on Company's business or that any subsequent financial improvement will result from Consultant's efforts.

2. Expenses.  Torvec shall reimburse Consultant for any and all reasonable expenses incurred by Consultant in the performance of its duties hereunder upon submission of reasonably satisfactory
documentation to Torvec of such cost or expense.

3.  Grant of Option; Reservation of Shares.        In further consideration of the Consulting Services, Torvec hereby grants to the Consultant the continuing
right and option (the "Option") to purchase from Torvec, at any time or from time to time during the Exercise Period (as defined below), up to an aggregate of ONE HUNDRED AND TWENTY-FIVE THOUSAND (125,000) shares of Common Stock (the "Option Shares") upon
the terms and conditions herein set forth.  Torvec shall at all times during the Exercise Period keep reserved and available for issuance upon exercise of the option the total number of Options Shares then subject to the option.

37



4. Exercise Price.  The Option shall be exercisable with respect to the ONE HUNDRED AND TWENTY-FIVE THOUSAND (125,000) Option Shares issuable upon exercise of the Option for an exercise price
equal to $5.00 per Option Share.  The Option Shares, when issued upon payment of the applicable exercise price (the "Exercise Price"), shall be validly issued, fully paid and non-assessable and free from all liens, charges, taxes or other encumbrances.

5. Term of Option.  The Option shall be exercisable in whole or in part during the period (the "Exercise Period") commencing on the date hereof and ending on February 10, 2004.  Upon expiration of
the Option, the Option shall be of no further force and effect.

6. Mechanics of Exercise.  To exercise the Option, Consultant shall, at any time or from time to time during the Exercise Period, deliver to Torvec, (i) a written notice of exercise (each an
"Exercise Notice") stating the number of Option Shares with respect to which the Option is then being exercised, which number shall not be less and 1,000 Option Shares; and (ii) the Exercise Price payable in respect to the Option Shares which are the
subject of such Exercise Notice.  The Option shall be deemed to be exercised with respect to the Option Shares stated in an Exercise Notice, and such Option Shares shall be deemed to be issued (whether or not a certificate representing such Shares has
been delivered to Consultant), at the time such Option Notice and Exercise Price is received by Torvec.

7.  Non-Transferability.  The Option and the rights attendant thereto may be assigned, pledged, hypothecated or otherwise transferred by Consultant in its sole discretion at any time, in
whole or in part.

8.  Registration; Registration Rights.  Torvec hereby covenants and agrees that Consultant shall have the right to cause Torvec to register under the Securities Act of 1993, as amended
(the "Securities Act") the offer and sale of the Option Shares issuable upon the exercise of the Option in accordance with the procedures set forth in Appendix A attached hereto.

9. Non-Exclusive Services.  Torvec understands that Consultant is currently providing certain advisory and financial consulting services to other individuals and entities and agrees
that Consultant is not prevented or barred from rendering services of the same nature or a similar nature to any other individuals or entities and acknowledges that such services may from time to time conflict with the timing of and the rendering of the
Consultation Services.  In addition, Consultant understands and agrees that Torvec shall not be prevented or barred from retaining other persons or entities to provide services of the same or similar nature as those provided by Consultant.

38



10.  Consultant Not an Agent or Employee.  Consultant's obligations under this Agreement consist solely of the services described herein.  In no event shall Consultant be considered to be acting
as an employee or agent of Torvec or otherwise representing or binding Torvec.  For the purposes of this Agreement, Consultant is an independent contractor.  All final decisions with respect to acts of Torvec or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant hereunder, shall be those of Torvec or such affiliates and Consultant shall, under no circumstances, be liable for any expenses incurred or losses suffered by Torvec as a
consequence of such actions.  Consultant agrees that all of his work product relating to the Services to be rendered pursuant to this agreement, shall become the exclusive property of Torvec.  The parties acknowledge that the Consultation Services
provided by the Consultant hereunder are not in connection with the offering or sale of securities of Torvec in a capital raising transaction.

11.  Confidentiality.  Except in the course of the performance of its duties hereunder, Consultant agrees that it shall not disclose any trade secrets, know-how, or other proprietary
information not in the public domain learned as a result of this Agreement or otherwise unless and until such information becomes generally known.

12.  Indemnification.

a) Torvec will indemnify and hold harmless Consultant from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation reasonable attorneys' fees and costs incurred in the investigation, defense and settlement of the matter) suffered or incurred by Consultant which arise out of this Agreement or otherwise out of the performance by
Consultant of its obligations hereunder, unless such losses, claims, damages, liabilities or expenses are found by a final determination of a court of competent jurisdiction to have arisen out of bad faith, gross negligence or malfeasance of the
Consultant in performing his services hereunder (pending any such final determination, the indemnification and reimbursement provision of this Agreement shall apply and Torvec is obligated to reimburse the Consultant for his expenses if it is ultimately
determined that the Consultant was not entitled to indemnification hereunder). If for any reason the foregoing indemnification is unavailable to the Consultant, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or
payable by the Consultant as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect not only the relative benefits received by the Torvec on the one hand and the Consultant on the other hand, but also
the relative fault of Torvec and the Consultant, as well as any other relevant equitable considerations.  The reimbursement indemnity and contribution obligations of Torvec under this paragraph shall be in addition to any liability which the Company may
otherwise have and shall be binding and inure to the benefit of any respective successors, assigns, heirs and personal representatives of Torvec and Consultant.

39



(b) Consultant agrees to give Torvec an opportunity to participate in the defense or preparation of the defense of any action
brought against Consultant to enforce any such claim or liability and Torvec shall have the right to participate.

13. Governing Law.  This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the laws of said State.

14. Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original and all of which when taken together shall constitute one agreement.

15. This Agreement supersedes and cancels prior Consulting Warrant Agreements between Torvec and Richard Paone.



| | /S/ KEG      Initial 
| | ---------------------
| |                      
| | /S/ RP        Initial



| | In Witness Whereof, this Agreement is executed on the date first above written.                    
| | ---------------------------------------------------------------------------------------------------
| | Very truly yours,
PMC Direct Corp.
By:     /S/ RICHARD PAONE
              Richard Paone, President
|
|

AGREED AND ACCEPTED:
Torvec, Inc.

By:   /S/ KEITH E. GLEASMAN
         Keith E. Gleasman, President



40

Appendix A

REGISTRATION PROCEDURES

1.        Registration.

a.       Demand Registration. Consultant may at any time, on any two separate occasions,
from August 10, 1999 hereof until February 10, 2004, request that Torvec, at Torvec's sole cost and expense (other than the fees and disbursements of counsel for Consultant and the underwriting discounts, if any, payable in respect of the Option Shares
sold by Consultant) register the sale of all or part of the Option Shares. Upon receipt of any such request, Torvec shall as promptly as practicable, prepare and file with the Commission a registration statement sufficient to permit the public offering
and sale of the Option Shares through the facilities of the Nasdaq National Market or any other securities exchange, if any, on which the Common Stock is being sold or on the over-the-counter market, and will use its reasonable best efforts through its
officer, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable.

b.       Piggyback Registration.  In addition to Torvec's obligation under Section 1.a.
of this Appendix A and not in limitation thereof, Torvec shall give Consultant at least 30 days' prior written notice of each filing by Torvec of a registration statement (other than a registration statement on Form S-4 or Form S-8 or on any successor
form thereto) with the Commission.  If requested by Consultant in writing at any time and from time to time, from the date hereof until February 10, 2004, within 20 days after receipt of any such notice, Torvec shall, at Torvec's sole expense (other than
the fees and disbursements of counsel for Consultant, and the underwriting discounts, if any, payable in respect of the Option Shares sold by Consultant), register all or, at Consultant's option, any portion of the Option Shares, concurrently with the
registration of such other securities, all to the extent requisite to permit the public offering and sale of the Option Shares through the facilities of the Nasdaq National Market or any other securities exchange, if any, on which the Common Stock is
being sold or on the over-the- counter market, and will use its reasonable best efforts through its officer, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable.  For purposes of this
Appendix A "Option Shares" shall not include Options Shares which have been previously sold pursuant to a registration statement or Rule 144 promulgated under the Securities Act.  If, the managing underwriter of any such offering shall determine and
advise Torvec that, in its opinion, the distribution of all or a portion of the Option Shares requested to be included in the registration concurrently with the securities being registered by Torvec would materially adversely affect the distribution of
such securities by Torvec then Torvec will include in such registration first, the securities that Torvec proposes to sell and second, the Option Shares requested to be included in such registration, to the extent permitted by the managing underwriter.
In the event, Torvec is advised by the staff of the Commission, NASDAQ, self-regulatory or state securities agency that the inclusion of the Option Shares will prevent, preclude or materially delay the effectiveness of a registration statement filed,
Torvec, in good faith, may amend such registration statement to exclude the Option Shares.

41



c.        In the event of a registration pursuant to the provisions of this Appendix A, Torvec shall use its reasonable
best efforts to cause the Option Shares so registered to be registered of qualified for sale under the securities or blue sky laws of such jurisdictions as Consultant may reasonably request; provided, however, that Torvec shall not be required to qualify to do business in any state by reason of this paragraph d. in which is not otherwise required to qualify to do business.

d.        Torvec shall keep effective any registration or qualification contemplated by this Appendix A and shall from
time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication until the earlier of (i) one year from the effective date thereof and (ii) the date on which all
Option Shares issuable upon the exercise of the Option covered by such registration statement shall have been sold.

e.        In the event of a registration pursuant to the provisions of this Appendix A, Torvec shall furnish to
Consultant such reasonable number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), of each prospectus contained in such registration statement and each supplement or amendment
thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Securities Act and the rules and regulations thereunder, and such other documents, as Consultant may reasonably request to facilitate the disposition of
the Option Shares included in such registration.

f.       Torvec shall notify Consultant promptly when such registration statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been field.

g.       Torvec shall advise Consultant, promptly after it shall receive notice or obtain knowledge of the issuance of
any stop order by the Commission suspending the effectiveness of such registration statement, or the initiation or threatening of any proceeding for that purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.

42



h.       Torvec shall promptly notify Consultant at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, would include an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the reasonable request of Consultant prepare and furnish to it such number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers or such Option Shares or securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made.

i.        If requested by the underwriter for any unwritten offering of Option Shares, Torvec
and Consultant will enter into an underwriting agreement with such underwriter for such offering, which shall be reasonably satisfactory in substance and form to Torvec, Torvec's counsel, Consultant, Consultant's counsel and the underwriter, and such
agreement shall contain such representations and warranties by Torvec and Consultant and such other terms and provisions as are customarily contained in an underwriting agreement with respect to secondary distributions solely by selling stockholders,
including, without limitation, indemnities substantially to the effect and to the extent provided in Section 2 of this Appendix A.

j.       Torvec agrees that until all the Option Shares have been sold under a registration
statement or pursuant to Rule 144 promulgated under the Securities Act, it shall upon becoming subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), use its reasonable best efforts to keep current
in filing all reports, statements and other materials required to be filed with the Commission to permit Torvec to maintain its eligibility to use a Form S-3 registration statement and to permit Consultant to sell the Option Shares under Rule 144.

43

S W A R T Z



|Company:                                                                                             | Torvec, Inc. ("Torvec")                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Investment Banker:                                                                                   | Dunwoody Brokerage Services, Inc. d/b/a Swartz Institutional Finance ("Swartz").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Strategic Partnerships,
Licensing Agreements,
Mergers and
Acquisition Partners
introduced by Swartz: | Entities introduced by Swartz to Torvec and entities introduced to Torvec by the aforementioned entities shall be referred to as "Strategic Partners."  All potential introductions shall be initially submitted in writing by Swartz and
confirmed in writing via Schedule A by Torvec prior to being pursued by Swartz.  For Strategic Partners, or affiliates thereof, who make an investment into Torvec or into whom Torvec makes an investment or enters into a strategic partnership, licensing
agreement, stock swap deal, merger, acquisition or any other transaction with Torvec (collectively referred to as "Covered Transactions"), Torvec shall pay Swartz a fee of 4% of the Transaction Value (as defined below) of the transaction between Torvec
and the Strategic Partners payable in cash or Torvec Common Stock ("Stock"), at Swartz' option, at the time of closing of each transaction.  To the extent that Swartz is paid in Stock, then the Stock will be valued at the Market Price (as defined below)
on the closing date of such transaction.  In addition to the payment of the cash or Stock fee, Swartz shall receive Warrants to purchase a number of shares of Torvec Common Stock equal to 4% of the Transaction Value divided by the Market Price on the
closing date of such transaction, exercisable at such Market Price.
|                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Transaction Value and
Transactions with no
Defined Transaction
Value:                                | "Transaction Value" shall mean the dollar amount or value of the subject transaction, provided that the value of any transaction arranged by Swartz, which does not entail a defined dollar amount will be a defined dollar or Stock value
determined by Torvec and Swartz in writing prior to closing (the "Defined Value").  For any such transaction, Swartz shall receive from Torvec 4% of the Defined Value payable in cash or Stock at Swartz' option.  In addition, Swartz shall receive a Warrant
to purchase a number of Common Shares equal to 4% of the Defined Value, divided by Market Price, exercisable at Market Price.  On each anniversary of the closing date thereafter, a new Defined Value shall be determined by two independent third parties,
knowledgeable and experienced in that particular field or industry, acceptable to both Swartz and Torvec.  In the event the Defined Value on any anniversary is greater than the highest Defined Value upon which Swartz has been compensated (the amount of
such difference being referred to as a "Compensation Shortfall Amount"), Swartz shall receive the above stated fee and Warrants on such Compensation Shortfall Amount.                                                                                                                                                     



300 Colonial Center Parkway, Suite 300
Roswell, GA  30076
phone 770-640-8130   fax 770-643-0279
Securities offered through Dunwoody Brokerage Services, Inc.  A registered broker/dealer, Atlanta, GA  770.640.0011.   Member NASD/SIPDC



44



|Market Price:                                                    | Market Price shall equal the lesser of (i) the lowest closing bid price of the Common Stock for the 5 trading days immediately preceding the date of execution by Torvec of a Letter of Intent to complete a Covered Transaction, or (ii) the
lowest closing bid price of the Common Stock for the 5 trading days immediately preceding the closing date of a Covered Transaction.                                                                                
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Other Funding sources
Introduced by Swartz:                      | In the event Swartz introduces Torvec to a Third Party Funding Source (as defined below), Swartz shall receive a fee equal to 4% of the amount invested or placed by the Third Party Funding Source plus a number of Warrants equal to 4% of
the amount invested divided by Market Price exercisable at such Market Price.  A third Party Funding Source is, but not limited to, an Investment Bank, Broker/Dealer or Securities Broker.                          
|                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Disputes as to
Transaction Value,
Defined Value or Market
Price: | Should the parties hereto not agree on the Defined Value, Transaction Value, or Market Price as each is defined above, Torvec agrees to forego and not circumvent Swartz with respect to any transaction with any Strategic Partners, or any
affiliate thereof, until such time as the parties hereto can agree on the Defined Value.                                                                                                                             
|                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Non-Circumvention:                                               | Any potential Investor or Strategic Partner (a Swartz Client) to whom Swartz introduces Torvec shall be considered, for purposes of this Agreement, the property of Swartz ("Swartz Client").  In the event that Torvec enters into a Covered
Transaction with a Swartz Client for a period of 36 months from the date of written confirmation of introduction of said Swartz Client, Torvec agrees to pay to Swartz a fee as stated above at the time of closing.
|                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|No Obligation:                                                   | Torvec may, in its sole and absolute discretion, choose not to close any Covered Transaction with any Swartz Client.  Torvec shall have no obligation to pay Swartz any fees or issue any Stock or warrants to Swartz to the extent Torvec
rejects such Covered Transaction.                                                                                                                                                                                      
|                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Warrants Referenced in
this Agreement:                           | Warrants referenced herein shall have piggyback registration rights, reset provisions, shall have anti-dilution provisions following any reverse-stock-splits and shall have a 5-year term.  Anti-dilution rights are activated upon certain
events which include but are not limited to stock splits, stock reclassifications, stock dividends, corporate reorganizations and mergers.                                                                           



45





|Termination: | Torvec and Swartz have the right to submit written notice of their respective intent to terminate the Agreement.  This Agreement, except as to the Non-Circumvention Section, shall be deemed terminated within 30 days of receipt of the
written notice of termination from either Torvec or Swartz.
|------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|DUNWOODY BROKERAGE SERVICES, INC.
By: /S/ ROBERT HOPKINS
Robert Hopkins, President
DateDECEMBER 8, 2000
SWARTZ INSTITUTIONAL FINANCE
By: /S/ ERIC SWARTZ
Eric Swartz, OSJ
Date: DECEMBER 8, 2000 | TORVEC, INC.
By: /S/ KEITH E. GLEASMAN
Print Name: Keith E. Gleasman
Title: President
Date: DECEMBER 8, 2000
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------



46



S W A R T Z





Pursuant to the executed Investment Banking Services Agreement ("Agreement"), dated December 8, 2000, Torvec hereby confirms that Swartz has permission to introduce Torvec to:

o          The Goodyear Tire & Rubber Company

The above named company(ies) shall be covered under the terms as agreed upon in the executed Agreement.  This signed Schedule A will act as written confirmation for Swartz to make this/these introduction(s).





TORVEC, INC.

By:  /S/ KEITH E. GLEASMAN
Print Name: KEITH E. GLEASMAN
Title:  President
Date: December 8, 2000

300 Colonial Center Parkway, Suite 300
Roswell, GA  30076
phone 770-640-8130   fax 770-643-0279
Securities offered through Dunwoody Brokerage Services, Inc.  A registered broker/dealer, Atlanta, GA  770.640.0011.   Member NASD/SIPDC

Torvec Investment Banking Svcs                                     
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