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, 2002

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, 2002, there were outstanding 24,088,884 shares of the company's common stock, 
$.01 par value.  Options for 909,000 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 Balance Sheets -
December 31, 2001 and March 31, 2002 (unaudited)                                                                                                                                                                         | 3   
|               | Torvec, Inc. Condensed Statements of Operations (Unaudited) - 
Three Months Ended March 31, 2002, Three Months Ended March 31, 2001, Three Months Ended March 31, 2002, Three Months Ended March 31, 2001, September 25, 1996 (Inception) through March 31, 2002 | 4   
|               | Torvec, Inc. Condensed Statements of Cash Flows (Unaudited) - 
Three Months Ended March 31, 2002, Three Months Ended March 31, 2001, September 25, 1996 (Inception) through March 31, 2002                                                                       | 5   
|               | Notes to Financial Statements                                                                                                                                                                                                                                    | 6   
|Item 2.        | Plan of Operation                                                                                                                                                                                                                                                | 12  
|PART II        | OTHER INFORMATION                                                                                                                                                                                                                                                |     
|Item 1.        | Legal Proceedings                                                                                                                                                                                                                                                | 18  
|Item 2.        | Changes in Securities                                                                                                                                                                                                                                            | 20  
|Item 3.        | Defaults Upon Senior Securities                                                                                                                                                                                                                                  | 29  
|Item 4.        | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                              | 29  
|Item 5.        | Other Information                                                                                                                                                                                                                                                | 31  
|Item 6.        | Exhibits and Reports on Form 8-K                                                                                                                                                                                                                                 | 31  
|SIGNATURE PAGE | 37                                                                                                                                                                                                                                                              
|EXHIBIT INDEX  | 38                                                                                                                                                                                                                                                              

2





TORVEC, INC.
(a development stage company)
CONDENSED BALANCE SHEET

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | March 31, 2002(Unaudited)                                          | December 31, 2001                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------------------------------------------------------------
|ASSETS
CURRENT ASSETS:
     Cash
     Stock subscriptions receivable (subsequently collected)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $30,000285,000                                                     | $    13,0000                                                          
|Total Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 315,000                                                            | 13,000                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                    |                                                                       
|PROPERTY AND EQUIPMENT:
     Office equipment
     Transportation equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 12,00053,000                                                       | 12,00053,000                                                          
|LESS:  ACCUMULATED DEPRECIATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 65,00052,000                                                       | 65,000(49,000)                                                        
|Net equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 13,000                                                             | 16,000                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                    |                                                                       
|LICENSE, net of accumulated amortization of
     $226,000 and $184,000, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 3,035,000                                                          | 3,077,000                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                    |                                                                       
|Total Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $ 3,363,000                                                        | $ 3,106,000                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                    |                                                                       
|LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued expenses
     Current maturities of long-term debt
     Loans payable-stockholders and officers 
     Consulting fees payable to related parties
          Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                           | $521,000
8,000
92,000483,0001,104,000                              | $1,221,000
7,000
    159,000  1,387,000                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                    |                                                                       
|LONG-TERM LIABILITIES
     Consulting fees payable to related parties
     Long-term debt, net of current maturities
     Deferred revenue-long term                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 0
0150,000
  1,254,000                                             | 370,000
    2,000150,000
  1,909,000                                  
|COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 850,000                                                            | 0                                                                     
|STOCKHOLDERS' EQUITY
     Series A Non-voting Cumulative Preferred Stock, $.01 par value,
          100,000,000 shares authorized, 38,500 issued and
          outstanding at March 31, 2002
     Common stock, $.01 par value, 40,000,000 shares authorized, 
          24,088,884 (including 78,355 shares subject to put option)
          and 23,139,838 (including 61,355 shares subject to put option)
          issued and outstanding at March 31, 2002 and
          December 31, 2001, respectively
Additional paid-in capital
Deficit accumulated during the development stage
          Total Stockholders' Equity
Total Liabilities and Stockholder's Equity | 0
240,000
17,003,000
(15,984,000)
__________1,259,000$   3,363,000 | 0
231,000
  15,532,000
 (14,566,000)
__________1,197,000
$   3,106,000
|See Notes to Financial Statements3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                   

TORVEC, INC.
(a development stage company)
CONDENSED STATEMENTS OF OPERATIONS

|                                                                             | Three Months
EndedMarch 31, 2002 | Three Months
EndedMarch 31, 2001 | September 25,
1996
(Inception)
ThroughMarch 31, 2001
|---------------------------------------------------------------------------- | -------------------------------- | -------------------------------- | ----------------------------------------------------
|COST AND EXPENSES:
   Research and development
   General and administrative | $         513,000905,000         | $        294,000243,000          | $     4,847,00011,137,000                           
|                                                                             |                                  |                                  |                                                     
|Net loss                                                                     | $1,418,000                       | $         537,000                | $   15,984,000                                      
|                                                                             |                                  |                                  |                                                     
|Basic and Diluted Loss Per Share                                             | ($0.06)                          | ($0.02)                          |                                                     
|                                                                             |                                  |                                  |                                                     
|Weighted average number of shares
   of common stock - basic and diluted     | 23,407,000                       | 22,525,000                       |                                                     







|See independent auditors' report and notes to financial statements | F-4
|------------------------------------------------------------------ | ---



4

TORVEC, INC.
(a development stage company)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Three Months
Ended
March 31, 2002                         | Three Months
Ended
March 31, 2001                      | September 25,
1996
(Inception)
Through
March 31, 2002                                                                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------
|CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss
   Adjustments to reconcile net loss
    to net cash used in operating activities:
         Depreciation and amortization
         Compensation expense attributable to common
             stock in subsidiary and common stock options
         Common stock issued for services
         Contribution of services
         Changes in other current assets
            and current liabilities:
            Prepaid expenses
            Accounts payable and accrued expenses
            Increase in deferred revenue
               Net cash provided by (used in) operating activities | ($1,418,000)
45,000
618,000
552,000
0
0
46,000
0(157,000) | ($537,000)
45,000
0
88,000
0
40,000
105,000
0(259,000) | $   (15,984,000)
      278,000
      5,529,000
      3,140,000
      84,000
      160,000
      2,302,000
150,000     (4,341,000)
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                           |                                                        |                                                                                                                                  
|CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment
     Cost of acquisition
               Net cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 0
00                                                      | 0
00                                                   | (65,000)
      (16,000)
    (81,000)                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                           |                                                        |                                                                                                                                  
|CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from sales of preferred stock, common stock and
      exercise of options
   Proceeds from long-term borrowings
   Repayment of long-term debt
   Proceeds from (repayments of) stockholders' loans-net
   Distributions
               Net cash provided by financing activities                                                                                                                                                                                                                                                                                                             | 242,000
0
(1,000)
(67,000)0174,000                        | 268,000
0
(2,000)
00
266,000                           | 4,717,000
         29,000
        (21,000)
        92,000(365,000)
     4,452,000                                                
|NET INCREASE (DECREASE) IN CASH
CASH - BEGINNING OF PERIOD
CASH - END OF PERIOD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 17,000
13,000$30,000                                      | 7,000
34,000$41,000                                    | 30,000
0$30,000                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                           |                                                        |                                                                                                                                  
|Issuance of common stock in settlement of liabilities 
      Cash paid for interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $633,000
$0                                               | $0                                                     |                                                                                                                                  

|See notes to Financial Statements | 
|--------------------------------- | 

5

TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002



Note 1   Financial Statement Presentation

The information contained herein with respect to the three month periods ended March 31, 2002 and March 31, 2001 and the period from September 25, 1996 (inception) through March 31, 2002 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 all 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 and nine month periods ended March 31, 2001, and since inception.  The results are not necessarily indicative of results to be expected for the year.

For the period from inception through March 31, 2001, the Company has accumulated a deficit of $15,984,000, has a working capital deficiency of $789,000 and has been dependent upon equity financing, loans from shareholders and the exchange of stock for services to meet its obligations and sustain operations.  The Company is in the development stage and its efforts have been principally devoted to research and development, raising capital and marketing of principal products.  Substantial additional financing will be required by the Company to fund its activities.

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.  On March 31, 2002 the Company granted 28% of Ice to three former officers of Torvec, Inc. in exchange for forfeiting of the previously granted fully vested options.  The exchange was valued at $618,000 based upon the value of the options forfeited at March 31, 2002.  The difference between the Company's share of the deemed proceeds of $618,000 and the carrying about of the portion of the Company's investment deemed sold is reflected as a gain or loss in the consolidated statements Stockholders' Equity.



6



TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002

Note 3   Summary of Significant Accounting Policies

Consolidation

The financial statements include the accounts of the Company and its subsidiary, Ice as at March 31, 2002 and December 31, 2001, 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.

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   Common and Preferred Stock

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

7



TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002





Note 4  Common and Preferred Stock continued

In March 2002, the Company issued 423,000 common shares and 42,300 warrants in connection with a put option exercised for an aggregate net proceeds of $385,000.  The Company received $100,000 in proceeds during the quarter ending March 31, 2002, and the balance was subsequently received.

Note 5  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, 2002 and March 31, 2001 is $112,500 and $112,500 respectively for consulting expenses.

Effective March 31, 2002, the Company entered into an agreement with the Chief Executive Officer, Chief Operative Officer and Vice President - Manufacturing (collectively "individuals") which provides for among other things:





| | Payments of amounts owing under employment agreements aggregating $633,001 through the issuance of 448,865 warrants to purchase common stock at an exercise price of $.01.  (See Note 10)                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                              
| | Termination of such employment agreements and resignation as officers of the Company.  (See Note 10)                                                                                                                                                         
| |                                                                                                                                                                                                                                                              
| | The issuance of 2,000,000 common shares of Ice to the individuals representing approximately a 28% interest.  (See Note 2)                                                                                                                                   
| |                                                                                                                                                                                                                                                              
| | Execution of employment agreements by Ice with individuals, substantially similar to that previously executed.  Such amounts due under these employment agreements can be paid in cash or stock of Ice at the discretions of the board of Ice.  (See Note 10)
| |                                                                                                                                                                                                                                                              
| | Payments of out-of-pocket expenses aggregating $66,745 in cash to individuals.                                                                                                                                                                               

8



TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002







Note  5   Related Party Transactions continued



| | Payment of $269,250 for services performed by a related entity of individuals.  Such payment to be made in cash or stock.  If the payment is made in common stock and amount realized on ultimate sale of common stock is less than the $269,250, additional shares shall be issued and if amount received is greater than $269,250 such excess shall be refunded to the Company.  This amount is included in accounts payable at March 31, 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Note 6  Long-Term Debt



Long-term debt at March 31, 2002 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.

Note 7   Consultant Stock Plan and Option Plan



The Company's Business Consultant Stock Plan as amended, ("the Plan") provides for the granting of 1,500,000 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, 2002, 509,046 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 $552,000.



Note 8   Subsequent Events



On April 2, 2002 the principal of a loan in the amount of $50,000 was satisfied with 35,461 shares of common stock at the fair market value of such shares on such date.



On April 15, 2002 the Company issued 1,000,000 warrants to purchase common stock at prices ranging from $.30 to $.75 to a new chairman of the board of directors and chief executive officer.  The Company will record a charge for the difference between the then fair market value and the exercise price on the measurement date.



9



TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002



Note 9   Litigation

The Company's Lawsuits

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.

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 September 24, 2001 the Court denied MMI's motion and allowed the case to proceed to trial.



Note 10  Employment Agreements



Certain employment agreements dated February 6, 1998 were terminated effective August 1, 2001.  However, options previously granted pursuant to those agreements remain in effect.



On August 1, 2001, the Company entered into three-year employment agreements with Michael Martindale and Jacob Brooks as Chief Executive Officer and Chief Operating Officer respectively.  The employment agreements provide for annual base salary of $240,000 for the remainder of calendar 2001 and increasing thereafter by $20,000 per annum.  In addition, the agreements provide for an annual bonus of $60,000 for the remainder of calendar year 2001 and increasing thereafter by $60,000 per annum.  On September 1, 2001 the Company entered into a three-year employment agreement with David Marshall as Vice President - Manufacturing.  The employment agreement provides for annual base salary of $144,000 for the remainder of calendar 2001 and increasing by $16,000 for calendar year 2002, and increasing thereafter by $30,000 per annum.  In addition, the agreement provides for an annual bonuses of $25,000, $40,000 and $50,000 for calendar years 2001, 2002 and 2003 respectively.



As of March 31, 2002, the Company entered into an agreement  with the officers to terminate their employment effective immediately, and all amounts under accrued compensation was exchanged for a warrant.  New employment were executed for these individuals on March 31, 2002.  (See Note 5)



10



TORVEC, INC.



NOTES TO FINANCIAL STATEMENTS



March 31, 2002





Note 11  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, 2002 such fair market value cannot yet be reasonably estimated.





11



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 FTVä
 vehicle 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 during fiscal 2002 is:



|o | to complete the infinitely variable transmission prototype;                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | to install the infinitely variable transmission 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;



12





|o | to install the CV 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 FTV vehicle;                                                                                                                                                                                                                                   
|o | to continue its efforts to sell or license rights to the company's
CV Joint to raise capital necessary to develop and
commercialize its core technologies by selling rights to its
non-core technologies;                                                                                                        
|o | to 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.                                                                                                                                                                                    

The company continues to investigate the possibility of manufacturing the FTV vehicle itself.  The company has investigated and is investigating potential sites in Rochester, New York, Massachusetts, Connecticut, and other northeastern states.  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 actual manufacturing of the FTV.  Management is presently investigating ways in which to acquire financing to pursue this strategy, including the proceeds from Swartz  and Pittsford Capital 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 fiscal 2002, management will re-institute 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.

13





On June 29, 2000, the company announced that it had granted an exclusive, world-wide license of all its automotive technology to Variable Gear, LLC for the aeronautical and marine markets.  Variable Gear will pay the Company 4% royalties for 7 years after which the company is obligated to repurchase the license.  Variable Gear is owned 51% by 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 | to continue its efforts to sell or license its rights in the ice technology to raise funds for the continued development and commercialization of its core technologies;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|o | to 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.

The net loss for the three months ended March 31, 2002 was $1,418,000 as compared to the three months ended March 31, 2001 net loss of $537,000.  The increase in the net loss of $881,000 is principally related to a charge of $618,000 for the value of options forfeited in exchange for the interest in subsidiary and additional consulting expenses incurred.  (See Note 2 to Financial Statements)

Research and development expenses or the three months ended March 31, 2002 amounted to $513,000 as compared to $294,000 for the three months ended March 31, 2001.  This increase amounted to $219,000 and is due to additional expenses associated with the employment contracts.

General and administrative expenses for the three months ended March 31, 2002 amounted to $905,000 as compared to $243,000 for the three months ended March 31, 2001.  This increase amounted to $662,000 and is primarily due to increases in consulting expenses and the employment contracts and the charge of $618,000 for the value of the options forfeited in exchange for the interest in subsidiary.  (See Note 2 to Financial Statements).



14





Liquidity and Capital Resources

The company's operations during the quarter ended March 31, 2002 were funded, in part, through the sale of 423,000 shares of common stock to Swartz for aggregate proceeds of approximately $385,000.  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.

The company also sold 38,500 Class A Preferred Shares in connection with our private placement through Pittsford Capital for gross proceeds of approximately $154,000.

During the quarter ended March 31, 2002 the company issued 509,046 shares to business consultants under its Business Consultants Stock Plan in exchange for ongoing corporate legal services, internal accounting services, expenses associated with our lawsuit, marketing research expenses as well as legal fees and associated expenses for ongoing patent work.

March 31, 2002, the company's cash position was $30,000 and it had a working capital deficiency of $789,000.  During the quarter ended March 31, 2002 the company has been dependent on the Swartz equity funding, the issuance of stock for services, and the sale of Class A Preferred Shares to sustain operations.

The company's business activities during its fiscal year ended December 31, 2001 were funded principally through the sale of 101,910 shares of common stock to Swartz for aggregate proceeds of approximately $324,210.  During the fiscal year ended December 31, 2001, the company issued 361,100 shares to business consultants under its Business Consultants Stock Plan in exchange for ongoing corporate legal services, internal accounting services, expenses associated with our lawsuit, research expenses as well as legal fees and associated expenses for ongoing patent work.  Loans from directors and shareholders amounted to $159,000.

At December 31, 2001, the company's cash position was $13,000, and the company had a working capital deficiency of $1,374,000.  The company's cash position at anytime during the fiscal year ended December 31, 2001 was directly dependent upon its success in selling stock since the company did not generate any revenues.  The company does not anticipate generating any revenues from its business activities during fiscal year 2002.

At December 31, 2001, the company had $1,221,000 of accounts payable and accrued expenses consisting of $228,000 in professional fees, $393,000 accrued payroll and $600,000 in trade payables.  In fiscal 2002, the company has paid, in cash or common stock, approximately 90% of such payables and expenses.



15



At December 31, 2001, the company owed $159,000 in loans payable to shareholders and officers.  In fiscal 2002, the company had repaid $124,900 in cash or common stock.

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 not be adequate to enable the company to implement its total 36-month business plan during fiscal 2002.  The company recognizes, based on its current financial status, its business plan and assumptions relating to its business plan (including assumptions regarding the nature and extent of its prototype development program, its environmental and feasibility testing program, the ability of the company to sell rights to its non-core assets, its ability to secure adequate manufacturing and distribution relationship and market acceptance of the company's products) that, to fully implement its business plan, the company will be required to obtain significant additional financing in the form of an equity investment by one or more investors in privately negotiated transactions or through debt financing or both.

To this end, the company has developed a strategy to sell its non-core technologies in order to raise capital for implementation of its business plan.  It also has engaged the services of nonexclusive agents to assist it raise needed capital.  Specifically, the company engaged the services of The NOVA Group to sell or license rights to the CV Joint and ice technology, and the Pittsford Capital Group to raise up to $5,000,000 through the sale of the company's Class A Preferred Stock.  In addition, management is directly negotiating with private investors and state agencies to formulate one or more financial packages to raise substantial monies.

As of March 31, 2002, the company had sold 38,500 Class A Preferred Shares for approximate gross proceeds of $154,000.

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.

Y2K Compliance

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



16







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, 2002.

Quarterly Fluctuations

As of March 31, 2002, 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.



17





|PART II
OTHER INFORMATION
|-------------------------
|                         

Item 1.     Legal Proceedings

Except as provided below, the company is not a party to any pending, material litigation.  To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the company.

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 an 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.

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.



18



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 | The Gleasmans and, later, the company were induced to proceed with expensive and time-consuming design, manufacturing and marketing of an alternative to the gimbal.  Specifically, the Gleasmans and, later, the company, expended an aggregate sum of approximately $1,000,000 in the design, manufacture and marketing of spherical gear technology, in significant part, to replace the gimbal and subsequent pump and motor prototypes;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | The Gleasmans, and later, the company, lost significantly valuable business opportunities available to them;                                                                                                                                                                                                                                                                                                                                
| | o | The Gleasmans, and later, the company, were induced to forebear the exercise of their rights to obtain worldwide patents on the pump and motor design which implemented a gimbal as the constant velocity joint.                                                                                                                                                                                                                            

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.

On September 24, 2001, the Court denied MMI's motion.  The case is in the discovery phase and the trial with jury selection is scheduled to begin on August 22, 2002.



19

Item 2:     Changes in Securities

Our certificate of incorporation authorizes the issuance of up to 100,000,000 preferred shares from time to time in one or more series with such designations, rights, preferences and restrictions as may be determined by the board of directors. Accordingly, the board of directors may, without prior shareholder approval, issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the relative voting power or other rights of the holders of the preferred stock or the common stock. Preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in our control.

On January 30, 2002, the company engaged Pittsford Capital Group as its nonexclusive agent to raise up to $5,000,000 in capital through the sale of up to 2,000,000 shares of the company's preferred stock.  The board designated the preferred stock to be issued in the fund raising effort as Class A Preferred Shares.  The relative rights, preferences and limitations of the Class A Preferred Shares are as follows:

| | A. | Number of Shares                                                                                                                                                                                                                                                                                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                             
| |    | The number of Class A Preferred Shares initially authorized is 3,300,000 Class A Preferred Shares.  The initial number authorized shall be increased as required to provide Class A Preferred Shares for payment of dividends as described in Section B, distribution to holders in accordance with Section C and as described in Section F.
| |    |                                                                                                                                                                                                                                                                                                                                             
| | B. | Dividends                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                             
| |    | (i)                                                                                                                                                                                                                                                                                                                                         

20



| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii)  | When and as declared by the Board, dividends payable on the Class A Preferred Shares will be paid in cash out of any funds legally available for the payment of dividends or, in the discretion of the Board, will be paid in Class A Preferred Shares at a rate of 1 Class A Preferred Share for each $4.00 of dividends.  No fractions of Class A Preferred Shares shall issue.  The Company shall pay cash in lieu of paying fractions of Class A Preferred Shares on a pro rata basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | (iii) | Dividends shall be cumulative from the date of issuance of Class A Preferred Shares, whether or not declared and whether or not, in any annual dividend period(s), there are net profits or net assets of the Company legally available for the payment of dividends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | (iv)  | Accumulated and unpaid dividends on the Class A Preferred Shares will not bear interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | (v)   | So long as any Class A Preferred Shares are outstanding, the Company may not declare or pay any dividend, make any distribution, or fund, set aside or make monies available for a sinking fund for the purchase or redemption of, any shares or stock of the Company ranking junior to the Class A Preferred Shares with respect to the payment of dividends, including the $.01 par value common stock of the Company ("Junior Stock"), unless all dividends in respect of the Class A Preferred Shares for all past annual dividend periods have been paid and such dividends for the current annual dividend period have been paid or declared and duly provided for.  Subject to the foregoing, and not otherwise, the dividends (payable in cash, stock or otherwise) as may be determined by the Board, may be declared and paid on any Junior Stock from time to time out of any funds legally available therefor, and the Class A Preferred Shares will be entitled to participate in any such dividends, whether payable in cash, stock or otherwise on a pro rata basis.

21



| | C. | Liquidation Rights
| | -- | ------------------
| |    |                   
| |    | (i)               

| |  |       | and unpaid dividends (including a prorated dividend from the last Dividend Accrual Date) in respect of any liquidation, dissolution or winding up consummated except that, notwithstanding the provisions of Section B(ii), all of such accumulated and unpaid dividends will be paid in Class A Preferred Shares at a rate of 1 Class A Preferred Share for each $4.00 of dividends.  No fractions of Class A Preferred Shares shall issue.  The Company shall pay cash in lieu of paying fractions of Class A Preferred Shares on a pro rata basis.
| |  | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | (ii)  | The Class A Preferred Shares will be entitled to participate on a pro rata basis in any distribution of assets as may be made or paid on Junior Stock upon the liquidation, dissolution or winding up of the Company.                                                                                                                                                                                                                                                                                                                                
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | (iii) | A consolidation or merger of the Company with or into any other corporation or corporations or any other legal entity will not be deemed to constitute a liquidation, dissolution or winding up of the Company as those terms are used in this Section C.                                                                                                                                                                                                                                                                                            

22



| | D. | Redemption |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | (i)        | The Company may, in the absolute discretion of its Board, redeem at any time and from time to time from any source of funds legally available any and all of the Class A Preferred Shares at the Redemption Price.                                                                                                                                                                                                                                                                                                                     
| |    |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | (ii)       | For each redemption, the Redemption Price for each Class A Preferred Share shall be equal to amount paid per Class A Preferred Share payable in cash, plus an amount payable (not withstanding the provisions of Section B (ii)) in cash equal to the sum of all accumulated unpaid dividends per Class A Preferred Share (including a prorated annual dividend from the last Dividend Accrual Date) to the respective date for each redemption on which the Company shall redeem any Class A Preferred Shares (the "Redemption Date").
| |    |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | (iii)      | In the event of a redemption of only a portion of the then outstanding Class A Preferred Shares, the Company will affect the redemption pro rata according to the number shares held by each holder of Class A Preferred Shares.                                                                                                                                                                                                                                                                                                       
| |    |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | (iv)       | At least 20 days and not more than 60 days prior to the date fixed by the Board for any redemption of Class A Preferred Shares, written notice (the "Redemption Notice") will be mailed, postage prepaid, to each holder of record of the Class A Preferred Shares at his or her post office address last shown on the records of the Company.  The Redemption Notice will state:                                                                                                                                                      
| |    |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | o          | whether all or less than all of the outstanding Class A Preferred Shares are to be redeemed and the total number of Class A Preferred Shares being redeemed;                                                                                                                                                                                                                                                                                                                                                                           
| |    | o          | the number of Class A Preferred Shares held by the holder that the Company intends to redeem;                                                                                                                                                                                                                                                                                                                                                                                                                                          

23



| |      | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Redemption Date and Redemption Price; and                                                                                                                                                          
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | that the holder is to surrender to the Company, in the manner and at the place designated in Section D(v), his or her certificate or certificates representing Class A Preferred Shares to be redeemed.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (v)  | On or before the date fixed for redemption, each holder of Class A Preferred Shares must surrender the certificate or certificates representing Class A Preferred Shares to the Company, accompanied by instruments of transfer satisfactory to the Company and sufficient to transfer the Class A Preferred Shares being redeemed to the Company free and clear of any adverse interest, at the place designated in the Redemption Notice.  The Redemption Price for the Class A Preferred Shares redeemed will be payable in cash on the Redemption Date to the person whose name appears on the certificate(s) as the owner of such certificate(s) as of the date of the Redemption Notice.  In the event that less than all of the Class A Preferred Shares represented by any certificate(s) are redeemed, a new certificate will issued by the Company representing the unredeemed Class A Preferred Shares to the same record owner.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (vi) | As promptly as practicable after surrender of the certificate(s) representing the redeemed Class A Preferred Shares, the Company will pay the Redemption Price to the record holder of the redeemed Class A Preferred Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





| | (vii)  | Unless the Company defaults in the payment in full of the Redemption Price, the obligation of the Company to pay dividends on the Class A Preferred Shares redeemed shall cease on the Redemption Date, and the holders of the Class A Preferred Shares redeemed will cease to have any further rights with respect to such redeemed Class A Preferred Shares on the Redemption Date, other than to receive the Redemption Price.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (viii) | The holders of the Class A Preferred Shares have no right to seek or to compel redemption of the Class A Preferred Shares.                                                                                                                                                                                                                                                                                                       

| | E. | Voting Rights                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| |    |                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |    | The holders of Class A Preferred Shares are not be entitled to vote in any and all elections of directors and with respect to any and all other matters as to which the vote or consent of shareholders of the Company shall be required or taken.
| |    |                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | F. | Conversion Privilege                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |    | (i)                                                                                                                                                                                                                                                | The holders of the Class A Preferred Shares have the right, at each holder's option but subject to Board approval in each case, to convert each Class A Preferred Share into 1 fully paid and nonassessable share of the $.01 par value common stock of the Company ("Common Share") without payment of any conversion price or other consideration.  Such 1 for 1 rate of conversion is subject to adjustment as set forth in F(x).



25

| |  | (ii)  | The Conversion Privilege set forth in this Section F may not be exercised by the holder of Class A Preferred Shares until 1 year shall have elapsed from the issue date of the Class A Preferred Shares held by such holder and may not be exercised if the Board shall not have approved the actual exercise of such Conversion Privilege by such holder of Class A Preferred Shares.  Such approval shall not be unreasonably withheld.  Upon receipt of the Notice of Conversion described in Section F(iii) below and the Board's approval of such conversion, the Company shall give a Notice of Approval to the holder within 48 hours of the receipt of the Notice of Conversion that the exercise of the Conversion Privilege by such holder is approved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | (iii) | In order to exercise the Conversion Privilege, the holder of Class A Preferred Shares must give written notice to the Company that the holder elects to covert the number of Class A Preferred Shares as specified in the Notice of Conversion.  The Notice of Conversion will also state the name(s) and address(es) in which the certificate(s) for Common Shares issuable upon the conversion are to be issued.  Upon receipt of the Company's Notice of Approval, the holder of the Class A Preferred Shares must surrender the certificate(s) representing the Class A Preferred Shares being converted to the Company, accompanied by instruments of transfer satisfactory to the Company and sufficient to transfer the Class A Preferred Shares being converted to the Company free and clear of any adverse interest at the office maintained for such purpose by the Company.  As promptly as practicable after the surrender of the certificate(s) representing the Class A Preferred Shares converted, the Company will issue and deliver to the holder, or to such other person designated by the holder's written order, a certificate(s) for the number of full Common Shares issuable upon the conversion of the Class A Preferred Shares in accordance with the provisions of this Section F(iii).

26



| |  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |  | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  | (iv) | The Conversion Privilege may be exercised in whole or in part and, if exercised in part, a certificate(s) will be issued for the remaining Class A Preferred Shares in any case in which fewer than all of the Class A Preferred Shares represented by a certificate(s) are converted to the same record holder of Class A Preferred Shares converted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (v)  | Each conversion will be deemed to have been effective immediately prior to the close of business on the date on which the Class A Preferred Shares will have been so surrendered as provided in Section F(iii) (the "Conversion Date") and the person(s) in whose name(s) any certificate(s) for Common Shares will be issuable upon the conversion will be deemed to have become the holder(s) of record of the Common Shares on the Conversion Date.  Effective as of the Conversion Date, the Company will have no obligation to pay dividends on the Class A Preferred Shares converted provided that effective as of the Conversion Date, the Company shall pay all accumulated and unpaid dividends (including the prorated dividend from the last Dividend Accrual Date) on the Class A Preferred Shares converted, payable in the discretion of the Board, in cash out of any funds legally available for payment of such dividends or in Class A Preferred Shares.
| |  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (vi) | The Conversion Privilege shall terminate with respect to Class A Preferred Shares called for redemption by the mailing of a Redemption Notice described in Section D(iv) on the close of business on the date immediately preceding the Redemption Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   





| |  | (vii)  | Notwithstanding the requirement for Board approval and the 1 year limit set forth in Section F(ii), in case of any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the surviving corporation or in case of any sale or conveyance to another corporation of all or substantially all of the assets of the Company or in the case of any statutory exchange of securities representing an excess of 50% of the total outstanding securities of the Company with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the holders of Class A Preferred Shares then outstanding will have the right to convert the Class A Preferred Shares into the kind and amount of securities, cash or other property which the holder would have owned or have been entitled to receive immediately after the consolidation, merger, statutory exchange, sale or conveyance, had the Class A Preferred Shares been converted immediately prior to the effective date of the consolidation, merger, statutory exchange, sale or conveyance as the case may be.
| |  | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | (viii) | Notwithstanding the 1 year holding period set forth in Section F(ii), in the event the highest bid price for the Company's $.01 par value common stock quoted on any exchange, automated quotation system or the OTC Bulletin Board on which such stock is actively traded is $20 or more on 5 consecutive trading days, the holders of Class A Preferred Shares shall have the right to convert such Class A Preferred Shares upon Board approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | (ix)   | Common Shares delivered upon conversion of Class A Preferred Shares will be, upon delivery, validly issued, fully paid and nonassessable, free of all liens and charges and not subject to any preemptive rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



28



| |  | (x)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | In case the Company
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | o                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | o                  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | o                  
| |  | the number of Common Shares issuable upon the conversion of the Class A Preferred Shares shall be adjusted at the time of the record date for the dividend or distribution or the effective date of the subdivision or a combination so that after such record or effective date, the holder of Class A Preferred Shares will be entitled to receive the same percentage of ownership of the Company's $.01 par value common stock as such holder would have been entitled to receive immediately prior to such record or effective date.

As of March 31, 2002, the company had issued 38,500 Class A Preferred Shares for aggregate proceeds of $154,000.

|Item 3. | Defaults Upon Senior Securities
None               
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders

The annual meeting of the company's shareholders was held on January 24, 2002.  At the meeting, at which a quorum of the requisite number of shares under the company's by-laws for the conduct of business was present either in person or by proxy, the following items were voted on by the shareholders with the following results:



29





|1. | Election of Directors:* | For:       | Withheld
|-- | ----------------------- | ---------- | --------
|   |                         |            |         
|   | Herbert H. Dobbs        | 20,637,150 | 4,645   
|   |                         |            |         
|   | Keith E. Gleasman       | 20,623,950 | 17,845  
|   |                         |            |         
|   | Michael Martindale      | 20,624,050 | 17,745  
|   |                         |            |         
|   | Jacob H. Brooks         | 20,624,050 | 17,745  
|   |                         |            |         
|   | Morton A. Polster       | 20,637,150 | 4,645   
|   |                         |            |         
|   | James A. Gleasman       | 20,634,870 | 6,925   

|2. | Ratification of the appointment of Richard A. Eisner & Company, LLP by The Board of Directors as independent auditors for the fiscal year ending December 31, 2001.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                    
|   | For20,635,110                                                                                                                                                      

|3. | Increase the number of shares we can issue under our Business Consultants Stock Plan from 600,000 to 1,500,000 shares.
|-- | ----------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                       
|   | For20,542,410                                                                                                         

|4. | To permit special shareholder meetings to be called only by board of directors.
|-- | -------------------------------------------------------------------------------
|   |                                                                                
|   | For18,293,494                                                                  
|   |                                                                                
|5. | To provide that directors may be removed only for cause by the shareholders.   
|   |                                                                                
|   | For18,101,745                                                                  

|6. | To provide procedures to govern shareholder proposals at annual meetings.                                          
|-- | -------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                    
|   | For18,304,236                                                                                                      
|   |                                                                                                                    
|*  | Effective April 1, 2002, Messrs. Martindale and Brooks resigned as directors as part of a management restructuring.

30







|Item 5. | Other Information               
|------- | --------------------------------
|        |                                 
|        | None                            
|        |                                 
|Item 6. | Exhibits and Reports on Form 8-K
|        |                                 

(a)     Exhibits

The following Exhibits, as applicable, are attached to this Quarterly Report (Form 10-QSB).  The Exhibit Index is found on the page immediately succeeding the signature page and the Exhibits follow on the pages immediately succeeding the Exhibit Index.



| | (2) | Plan of acquisition, reorganization, arrangement, liquidation, or succession
| | --- | ----------------------------------------------------------------------------
| |     |                                                                             
| |     | 2.1                                                                         
| |     |                                                                             
| | (3) | Articles of Incorporation, By-laws                                          
| |     |                                                                             
| |     | 3.1                                                                         
| |     |                                                                             
| |     | 3.2                                                                         
| |     |                                                                             
| |     | 3.3                                                                         







| |      |                                                                     
| | ---- | --------------------------------------------------------------------
| |      | 3.4                                                                 
| |      |                                                                     
| | (4)  | Instruments defining the rights of holders including indentures
None
| |      |                                                                     
| | (10) | Material Contracts                                                  
| |      |                                                                     
| |      | 10.1                                                                
| |      |                                                                     
| |      | 10.2                                                                
| |      |                                                                     
| |      | 10.3                                                                
| |      |                                                                     
| |      | 10.4                                                                
| |      |                                                                     



32



| |  | 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, incorporated by reference to Form 10-QSB filed for quarter ended March 31, 2001;                                                 
| |  |       |                                                                                                                                                                                                                     
| |  | 10.11 | Option and Consulting Agreement with PMC Direct Corp., dated February 10, 1999, incorporated by reference to Form 10-QSB filed for quarter ended March 31, 2001;                                                    
| |  |       |                                                                                                                                                                                                                     
| |  | 10.12 | Investment Banking Services Agreement with Swartz Institutional Finance (Dunwoody Brokerage Services, Inc.) dated December 8, 2000, incorporated by reference to Form 10-QSB filed for quarter ended March 31, 2001;
| |  |      
| |  | 10.13 | Employment Agreement with Michael Martindale, Chief Executive Officer, dated August 1, 2001, incorporated by reference to Form 10-QSB filed for fiscal quarter ended September 30, 2001;                            
| |  |      



33



| |      | 10.14                                                 | Employment Agreement with Jacob H. Brooks, Chief Operating Officer, dated August 1, 2001, incorporated by reference to Form 10-QSB filed for fiscal quarter ended September 30, 2001;                                                       
| | ---- | ----------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                       |                                                                                                                                                                                                                                             
| |      | 10.15                                                 | Employment Agreement with David K. Marshall, Vice-President of Manufacturing, dated September 1, 2001, incorporated by reference to Form 10-QSB filed for fiscal quarter ended September 30, 2001;                                          
| |      |                                                      
| |      | 10.16                                                 | Investment Banking Services Agreement with Swartz Institutional Finance (Dunwoody Brokerage Services, Inc.), as amended, dated October 23, 2001, incorporated by reference to Form 10-QSB filed for fiscal quarter ended September 30, 2001;
| |      |                                                      
| |      | 10.17                                                 | Stock Option Agreement with Samuel Bronsky, Chief Financial and Accounting Officer, dated August 28, 2001, incorporated by reference to Form 10-QSB filed for fiscal quarter ended September 30, 2001;                                      
| |      |                                                      
| |      | 10.18                                                 | Pittsford Capital Group, LLC Agreement dated January 30, 2002, incorporated by reference to Form 10-KSB filed for fiscal year ended December 31, 2001;                                                                                      
| |      |                                                      
| |      | 10.19                                                 | Gleasman-Steenburgh Indemnification Agreement dated April 9, 2002, incorporated by reference to Form 10-KSB filed for fiscal year ended December 31, 2001;                                                                                  
| |      |                                                       |                                                                                                                                                                                                                                             
| |      | 10.20                                                 | Series B Warrant dated April 10, 2002, incorporated by 
reference to Form 10-KSB filed for fiscal year ended
December 31, 2001;                                                                                                             
| |      |                                                       |                                                                                                                                                                                                                                             
| | (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                                       
| |      |                                                      

34



| | (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

None.

(c)     Forward Looking Information

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



35



The Future Factors that may affect the company, its plans for its future operations and performance and results of the company's future business include, but are not limited to, the following:

| |    |                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | the company's ability to raise or borrow significant capital to fund its business plan;                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                             
| | b. | the company's ability to enter into collaborative joint working arrangements, formal joint venture arrangements and/or licensing arrangements with domestic and/or foreign governments, automotive industry manufacturers and suppliers to manufacture and promote the company's inventions;
| |    |                                                                                                                                                                                                                                                                                             
| | c. | industry and consumer acceptance of the company's inventions;                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                             
| | d. | the level of competition and resistance in the automotive and related industries;                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                             
| | e. | general economic and competitive conditions in the markets and countries in which the company will operate, and the risks inherent in any future international operations;                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                             
| | f. | the strength of the U.S. dollar against currencies of other countries where the company may operate, as well as cross-currencies between the company's future operations outside of the U.S. and other countries with whom it transacts business.                                           
| |    |                                                                                                                                                                                                                                                                                             

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements.  The Company does not intend to update forward-looking statements.

36



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 14, 2002 | By:   /S/ KEITH E. GLEASMAN         Keith E. Gleasman
         President

|Date:  May 14, 2002 | By:   /S/ SAMUEL M. BRONSKY                                      
|------------------- | -----------------------------------------------------------------
|                    | Samuel M. Bronsky
         Chief Financial and Accounting Officer
|                    |                                                                  



37



EXHIBIT INDEX



|EXHIBIT | PAGE
|------- | ----
|        |     
|(2)     |     
|        |     
|        |     
|        |     
|(3)     |     
|        |     
|        |     
|        |     
|        |     
|        |     
|        |     
|        |     
|        |     
|        |     
|(4)     |     
|        |     



38



|EXHIBIT |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | PAGE
|------- | ------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(10)    | Material Contracts |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.1               | Certain Employment Agreements, Consulting Agreements, certain
assignments of patents, patent properties, technology and know-
how to the Company, Neri Service and Space Agreement and Ford 
Motor Company Agreement and Extension of Term, all 
incorporated by reference to Form 10-SB/A, Registration 
Statement, registering Company's $.01 par value common stock 
under section 12(g) of the Securities Exchange Act of 1934;                                                                                                                                       | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.2               | The Company's 1998 Stock Option Plan and related Stock Options
Agreements, incorporated by reference to Form S-8, Registration
Statement, registering 2,000,000 shares of the Company's $.01 par
value common stock reserved for issuance thereunder, effective
December 17, 1998;                                                                                                                                                                                                                                                                                        | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     
|        | 10.3               | The Company's Business Consultants Stock Plan, incorporated by
reference to Form S-8, Registration Statement, registering 200,000
shares of the Company's $.01 par value common stock reserved 
for issuance thereunder, effective June 11, 1999 as amended by 
reference to Form S-8 Registration Statement registering an 
additional 200,000, 200,000, 100,000 and 800,000 shares of the 
Company's $.01 par value common stock reserved for issuance 
thereunder, effective October 5, 2000,  November 7, 2001, 
December 21, 2001 and February 1, 2002 respectively; | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     
|        | 10.4               | Termination of Neri Service and Space Agreement dated
August 31, 1999, incorporated by reference to Form 10-QSB
filed for the quarter ended September 30, 1999;                                                                                                                                                                                                                                                                                                                                                                                                           | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     
|        | 10.5               | Operating Agreement of Variable Gear, LLC dated June 28, 2000,
incorporated by reference to Form 10-QSB filed for the quarter 
ended June 30, 2000;                                                                                                                                                                                                                                                                                                                                                                                                                       | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     
|        | 10.6               | License Agreement between Torvec, Inc. and Variable Gear, LLC
dated June 28, 2000, incorporated by reference to Form SB-2 filed
October 19, 2000;                                                                                                                                                                                                                                                                                                                                                                                                                         | N/A 
|        |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     

39



|EXHIBIT |  |  | PAGE
|------- |  |  | ----

| | 10.7  | Investment Agreement with Swartz Private Equity, LLC dated
September 5, 2000, together with attachments thereto, 
incorporated by reference to Form 8-K filed October 2, 2000; | N/A                                                                                                                                                                                                                                         
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| | 10.8  | Consulting Agreement Extension with Keith E. Gleasman, 
effective January 1, 2001;                                                                                             | N/A                                                                                                                                                                                                                                         
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| | 10.9  | Consulting Agreement Extension with James A. Gleasman, 
effective January 1, 2001;                                                                                             | N/A                                                                                                                                                                                                                                         
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| | 10.10 | Consulting Agreement Extension with Vernon E. Gleasman, 
effective January 1, 2001,                                                                                            | N/A                                                                                                                                                                                                                                         
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| |       | 10.11                                                                                                                                                                          | Option and Consulting Agreement with PMC Direct Corp.,
dated February 10, 1999, incorporated by reference to
Form 10-QSB filed for quarter ended April 31, 2001;                                                                            
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| |       | 10.12                                                                                                                                                                          | Investment Banking Services Agreement with Swartz
Institutional Finance (Dunwoody Brokerage Services, Inc.)
dated December 8, 2000, incorporated by reference to
Form 10-QSB filed for quarter ended April 31, 2001;                        
| |       |                                                                                                                                                                               
| |       | 10.13                                                                                                                                                                          | Employment Agreement with Michael Martindale, Chief 
Executive Officer, dated August 1, 2001, incorporated by 
reference to Form 10-QSB filed for fiscal quarter ended 
September 30, 2001;                                                 
| |       |                                                                                                                                                                               
| |       | 10.14                                                                                                                                                                          | Employment Agreement with Jacob H. Brooks, Chief Operating 
Officer, dated August 1, 2001, incorporated by reference to
Form 10-QSB filed for fiscal quarter ended September 30, 2001;                                                      
| |       |                                                                                                                                                                                |                                                                                                                                                                                                                                             
| |       | 10.15                                                                                                                                                                          | Employment Agreement with David K. Marshall, Vice-President 
of Manufacturing, dated September 1, 2001, incorporated by 
reference to Form 10-QSB filed for fiscal quarter ended 
September 30, 2001;                                       
| |       |                                                                                                                                                                               
| |       | 10.16                                                                                                                                                                          | Investment Banking Services Agreement with Swartz
Institutional Finance (Dunwoody Brokerage Services, Inc.),
as amended, dated October 23, 2001, incorporated by reference to
Form 10-QSB filed for fiscal quarter ended September 30, 2001;

40



|EXHIBIT |      |                                                                          | PAGE                                                                                                                                                                                                     
|------- | ---- | ------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |      |                                                                         
|        |      | 10.17                                                                    | Stock Option Agreement with Samuel Bronsky, Chief Financial 
and Accounting Officer, dated August 28, 2001, incorporated by 
reference to Form 10-QSB filed for fiscal quarter ended 
September 30, 2001;
|        |      |                                                                         
|        |      | 10.18                                                                    | Pittsford Capital Group, LLC Agreement dated January 30, 2002,
incorporated by reference to Form 10-KSB filed for fiscal year 
ended December 31, 2001;                                                  
|        |      |                                                                         
|        |      | 10.19                                                                    | Gleasman-Steenburgh Indemnification Agreement dated April 9, 
2002, incorporated by reference to Form 10-KSB filed for fiscal 
year ended December 31, 2001;                                             
|        |      |                                                                          |                                                                                                                                                                                                          
|        |      | 10.20                                                                    | Series B Warrant dated April 10, 2002, incorporated by reference
to Form 10-KSB filed for fiscal year ended December 31, 2001;                                                                           
|        |      |                                                                          |                                                                                                                                                                                                          
|        | (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                                                          
|        |      |                                                                         
|        | (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                                                          

41