##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 000-24455
 TORVEC, INC.
  New York
    
    16-1509512(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)
 1169 Pittsford Victor Road, Suite 125 Pittsford, New York 14534
(Address of principal executive offices and Zip Code)
(585) 248-0740   Not Applicable
  þ o
  o o þ
  o þ
 APPLICABLE ONLY TO CORPORATE ISSUERS:
  Number of Shares Outstanding atClass
    
    April 30, 2007Common Stock, $.01 par value
    
    31,337,339
 Options Outstanding1,823,895




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##### 



2 
 INDEX
  
 PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsTorvec, Inc. and Subsidiaries Condensed Consolidated Balance Sheets  March 31, 2007
(Unaudited) and December 31, 2006 (Derived from Audited Financial Statements)
    
    
    3Torvec, Inc. and Subsidiaries Condensed Consolidated Statements of Operations Three
Months Ended March 31, 2007 and 2006 (Unaudited) and September 25, 1996 (Inception)
through March 31, 2007
    
    
    4Torvec, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows 
Three Months Ended March 31, 2007 and 2006 (Unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6 - 27Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    34PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    36Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3. Defaults Upon Senior Securities
    
    
    36Item 4. Submission of Matters to a Vote of Security Holders
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    37 - 42SIGNATURES PAGE
    
    
    43EXHIBIT INDEX
    
    
    44EX-10.51EX-31.1EX-32




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3 
 PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 
 March 31, 2007
    
    
    December 31, 2006(Unaudited)
    
    
    (Derived fromAudited FinancialStatements)ASSETSCurrent assets:Cash
    
    $
    451,000
    
    
    $
    720,000Prepaid expenses and other receivable
    
    
    52,000
    
    
    
    73,000Total current assets
    
    
    503,000
    
    
    
    793,000Property and Equipment:Office equipment
    
    
    44,000
    
    
    
    44,000Shop equipment
    
    
    126,000
    
    
    
    126,000Leasehold improvements
    
    
    3,000
    
    
    
    3,000Transportation equipment
    
    
    106,000
    
    
    
    106,000279,000
    
    
    
    279,000Less accumulated depreciation and amortization
    
    
    134,000
    
    
    
    123,000Net property and equipment
    
    
    145,000
    
    
    
    156,000Other Assets:Deposits
    
    
    252,000
    
    
    
    252,000Total Other Assets
    
    
    252,000
    
    
    
    252,000$
    900,000
    
    
    $
    1,201,000LIABILITIESCurrent liabilities:Notes payable, current portion
    
    $
    14,000
    
    
    $
    14,000Accounts payable
    
    
    171,000
    
    
    
    145,000Accrued liabilities
    
    
    1,541,000
    
    
    
    1,541,000Advance from
stockholder
    
    
    250,000
    
    
    
    250,000Total current liabilities
    
    
    1,976,000
    
    
    
    1,950,000Deferred revenue
    
    
    150,000
    
    
    
    150,000Notes payable, net of current portion
    
    
    56,000
    
    
    
    59,000Total liabilities
    
    
    2,182,000
    
    
    
    2,159,000Minority interest
    
    
    
    
    
    
    Commitments and other mattersCAPITAL DEFICIENCYPreferred stock, $.01 par value, 100,000,000 shares authorized3,300,000 designated as Class A, Non-voting, cumulative
dividend $.40 per share, per annum, convertible preferred,
732,493 shares issued and outstanding (liquidation preference
$3,481,766)
    
    
    9,000
    
    
    
    9,000300,000 designated as Class B, Non-voting, cumulative
dividend $.50 per share, per annum, convertible preferred,
97,500 shares issued and outstanding (liquidation preference
$275,373)
    
    
    
    
    
    
    Common stock, $.01 par value, 400,000,000 shares authorized,
31,366,769 and 31,307,792 shares issued and outstanding, at March
31, 2007 and December 31, 2006, respectively
    
    
    313,000
    
    
    
    313,000Additional paid-in capital
    
    
    44,274,000
    
    
    
    43,767,000Deficit accumulated during the development stage
    
    
    (45,878,000
    )
    
    
    (45,047,000
    )(1,282,000
    )
    
    
    (958,000
    )$
    900,000
    
    
    $
    1,201,000
 See notes to condensed consolidated financial statements




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4 
 
 September 25,1996(Inception)Three Months Ended
    
    
    ThroughMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Revenue
    
    $
    
    
    
    $
    
    
    
    $
    Cost and expenses:Research and development
    
    
    235,000
    
    
    
    397,000
    
    
    
    14,324,000General and administrative
    
    
    596,000
    
    
    
    472,000
    
    
    
    31,755,000Asset impairment
    
    
    
    
    
    
    
    
    
    
    1,071,000Loss before minority interest
    
    
    (831,000
    )
    
    
    (869,000
    )
    
    
    (47,150,000
    )Minority interest in loss of consolidated subsidiary
    
    
    
    
    
    
    8,000
    
    
    
    1,272,000Net loss
    
    
    (831,000
    )
    
    
    (861,000
    )
    
    
    (45,878,000
    )Preferred stock beneficial conversion feature
    
    
    
    
    
    
    
    
    
    
    763,000Preferred stock dividend
    
    
    85,000
    
    
    
    55,000
    
    
    
    613,000Net loss attributable to common stockholders
    
    $
    (916,000
    )
    
    $
    (916,000
    )
    
    $
    (47,254,000
    )Basic and diluted net loss attributable to common
stockholders per share
    
    $
    (0.03
    )
    
    $
    (0.03
    )Weighted
average number of shares of common stock outstanding 
basic and diluted
    
    
    31,334,000
    
    
    
    30,128,000
 See notes to condensed consolidated financial statements




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5 
 
 September 25,1996(Inception)Three Months Ended
    
    
    ThroughMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (831,000
    )
    
    $
    (861,000
    )
    
    $
    (45,878,000
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    11,000
    
    
    
    225,000
    
    
    
    2,347,000Loss on impairment of license
    
    
    
    
    
    
    
    
    
    
    1,071,000Gain on sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Minority interest in loss of consolidated subsidiary
    
    
    
    
    
    
    (8,000
    )
    
    
    (1,272,000
    )Compensation expense attributable to common stock in subsidiary
    
    
    
    
    
    
    
    
    
    
    619,000Common stock issued for services
    
    
    183,000
    
    
    
    236,000
    
    
    
    10,789,000Shares issued for future consulting services
    
    
    
    
    
    
    56,000
    
    
    
    103,000Stockholder contribution of services
    
    
    75,000
    
    
    
    75,000
    
    
    
    2,184,000Compensatory common stock, options and warrants
    
    
    249,000
    
    
    
    39,000
    
    
    
    16,851,000Changes in:Prepaid expenses
    
    
    21,000
    
    
    
    9,000
    
    
    
    109,000Deposits
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Accounts payable and accrued expenses
    
    
    26,000
    
    
    
    19,000
    
    
    
    3,620,000Deferred revenue
    
    
    
    
    
    
    
    
    
    
    150,000Net cash used in operating activities
    
    
    (266,000
    )
    
    
    (210,000
    )
    
    
    (9,319,000
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    
    
    
    
    
    
    
    
    (279,000
    )Cost of acquisition
    
    
    
    
    
    
    
    
    
    
    (16,000
    )Proceeds from sale of fixed asset
    
    
    
    
    
    
    
    
    
    
    10,000Net cash used in investing activities
    
    
    
    
    
    
    
    
    
    
    (285,000
    )Cash flows from financing activities:Net proceeds from sales of common stock and upon exercise of options and
warrants
    
    
    
    
    
    
    2,000
    
    
    
    6,500,000Net proceeds from sales of preferred stock
    
    
    
    
    
    
    233,000
    
    
    
    3,537,000Net proceeds from sale of subsidiary stock
    
    
    
    
    
    
    
    
    
    
    234,000Proceeds from long  term borrowings
    
    
    
    
    
    
    
    
    
    
    85,000Repayments of long  term debt
    
    
    (3,000
    )
    
    
    (1,000
    )
    
    
    (39,000
    )Proceeds from stockholders loans-net
    
    
    
    
    
    
    
    
    
    
    103,000Distributions
    
    
    
    
    
    
    
    
    
    
    (365,000
    )Net cash
(used in) provided by financing activities
    
    
    (3,000
    )
    
    
    234,000
    
    
    
    10,055,000Net (decrease) increase in cash
    
    
    (269,000
    )
    
    
    24,000
    
    
    
    451,000Cash at beginning of period
    
    
    720,000
    
    
    
    51,000Cash at end of period
    
    $
    451,000
    
    
    $
    75,000
    
    
    $
    451,000Supplemental Disclosures:Interest paid
    
    $
    6,000
 See notes to condensed consolidated financial statements




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6 
 
   Note A  The Company and Basis of Presentation
      Note B  Summary of Significant Accounting Policies
 [1] Consolidation:
  [2] Property and Equipment:




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7 
 Note B  Summary of Significant Accounting Policies (continued)
 [3] Research and development and patents:
  [4] License:
  [5] Use of estimates:
  [6] Loss per common share:
  [7] Fair value of financial instruments:
  [8] Stock-based compensation:




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8 
 Note B  Summary of Significant Accounting Policies (continued)
 [8] Stock-based compensation:(continued)
   [9] Revenue recognition:
  [10] Recent accounting Pronouncements:




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9 
 NOTE C  LICENSE FROM THE TRUSTEES OF DARTMOUTH COLLEGE
   NOTE D  RELATED PARTY TRANSACTIONS
 [1]
 [2]
 NOTE E
 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
  March 31,
    
    December 31,2007
    
    2006Professional fees
    
    
    67,000
    
    
    
    36,000Non-management Directors compensation
    
    
    42,000
    
    
    
    42,000Other accrued expenses
    
    
    108,000
    
    
    
    113,000Salaries to officer/shareholders of Ice
    
    
    1,495,000
    
    
    
    1,495,0001,712,000
    
    
    
    1,686,000




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10 
 NOTE F  SHAREHOLDER, OFFICER AND OTHER NOTES PAYABLE
 [1] Notes Payable  Financial Institution
    2008
    
    $
    20,0002009
    
    
    21,0002010
    
    
    20,0002011
    
    
    18,0002012
    
    
    6,000Total minimum payments
    
    
    85,000Less-amount representing interest
    
    
    15,00070,000Less-Current Maturities
    
    
    14,000Long Term Portion
    
    $
    56,000
  [2]
Advance from Stockholder




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11 
 NOTE
G CAPITAL DEFICIENCY
 [1] Class A Preferred stock:




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12 
 NOTE
G CAPITAL DEFICIENCY (continued)
 [2] Class B Preferred stock:
       [3] Business Consultants Stock Plan:




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13 
 NOTE G
 CAPITAL DEFICIENCY (continued)
 [4] Nonmanagement Directors Plan:




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14 
 NOTE G
 CAPITAL DEFICIENCY (continued)
 [5] Shares issued for services and rent:
  [6] Business, Financial and Engineering Consultants:
  [7] Stock Option Plan




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15 
 NOTE G
 CAPITAL DEFICIENCY (continued)
 [7] Stock Option Plan (CONTINUED)
       Quarter Ended March 31,2007
    
    2006Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceOutstanding at beginning of year
    
    
    1,823,895
    
    
    $
    4.92
    
    
    
    1,823,895
    
    
    $
    4.92Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31
    
    
    1,823,895
    
    
    
    4.92
    
    
    
    1,823,895
    
    
    
    4.92Options exercisable March 31
    
    
    1,823,895
    
    
    
    4.92
    
    
    
    1,823,895
    
    
    
    4.92
   Options Outstanding
    
    Options ExercisableWeighted
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    Average
    
    
    
    
    
    AverageExercise
    
    Remaining Life
    
    
    
    
    
    ExerciseShares
    
    Price
    
    in Years
    
    Shares
    
    Price1,773,895
    
    
    $
    5.00
    
    
    
    3.44
    
    
    
    1,773,895
    
    
    $
    5.0050,000
    
    
    
    2.26
    
    
    
    6.17
    
    
    
    50,000
    
    
    
    2.261,823,895
    
    
    
    4.92
    
    
    
    3.59
    
    
    
    1,823,895
    
    
    
    4.92




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16 
 Note
G  CAPITAL DEFICIENCY
 [7] Stock Option Plan (CONTINUED)
    WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueNumber of shares under option plan:Outstanding at January 1, 2007
    
    
    1,823,895
    
    
    $
    4.92GrantedExercisedCanceled or expiredOutstanding at March 31, 2007
    
    
    1,823,895
    
    
    $
    4.92
    
    
    
    3.59
    
    
    $
    97,000Exercisable at March 31, 2007
    
    
    1,823,895
    
    
    $
    4.92
    
    
    
    3.59
    
    
    $
    97,000




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17 
 Note G  CAPITAL DEFICIENCY
 [8]
    
    Warrants:As of March 31, 2007, outstanding warrants to acquire shares of the companys common stock are
as follows:
 Number ofExercise
    
    
    
    
    
    SharesPrice
    
    Expiration
    
    Exercisable$
    1.52
    
    
    September 18, 2007
    
    
    2,500
    
    
    Note H(2)(a)
    
    
    (a
    )
    
    
    125,000
    
    
    
    (a
    )$
    .75
    
    
    None
    
    
    500,000
    
    
    
    (b
    )$
    .01
    
    
    None
    
    
    756,200
    
    
    
    (c
    )$
    .01
    
    
    None
    
    
    54,500
    
    
    
    (d
    )$
    .01
    
    
    None
    
    
    39,000
    
    
    
    (e
    )$
    5.00
    
    
    10 years
    
    
    505,000
    
    
    
    (f
    )$
    .01
    
    
    None
    
    
    6,000
    
    
    
    (g
    )$
    .01
    
    
    None
    
    
    25,000
    
    
    
    (h
    )$
    1.00
    
    
    None
    
    
    20,500
    
    
    
    (i
    )(j)
    
    
    (j
    )
    
    
    
    (j)
    
    
    (j
    )$
    3.27
    
    
    10 years
    
    
    400,000
    
    
    
    (k
    )$
    3.75
    
    
    10 years
    
    
    200,000
    
    
    
    (l
    )$
    5.00
    
    
    10 years
    
    
    50,000
    
    
    
    (m
    )2,683,700
 
 (a)
    
    Exercisable only if company has an IPO at the IPO price and exercisable five years from
IPO. Through December 31, 2006, the company has not conducted an IPO.(b)
    
    On April 15, 2002, the company issued 1,000,000 warrants to purchase common stock at
prices ranging from $.30 to $.75 to its then chairman of the board of directors and chief executive
officer. Of the total warrants, 250,000 were exercisable at $.30, and 250,000 were exercisable at
$.50 on the date the then board elected the executive to the board and named the chief executive
officer. During the year ended December 31, 2002, 250,000 warrants were exercised for $.30 per
share, resulting in proceeds of $75,000. During the year ended December 31, 2003, 250,000 warrants
were exercised for $.50 per share, resulting in proceeds of $125,000. The remaining 500,000
warrants are exercisable upon the execution of the company of a binding agreement for the sale,
transfer, license or assignment for value of any and/or all of its companys technology at $.75 per
share. The company will record a charge representing the fair value of the warrants when the
warrants become exercisable.




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18 
 Note G  CAPITAL DEFICIENCY
 [8] Warrants:(continued)
 
 (c)
    
    The company has issued 1,325,000 warrants, exercisable at $.01 per share, to a management
consulting firm in accordance with purported agreements between the company and the management
firm. 568,800 warrants were exercised for proceeds of aggregate $5,484 in accordance with the
purported agreements with the management consulting firm. In accordance with the courts order
rendered on May 8, 2006 in connection with the litigation described in Note I, the company was
required to honor immediately the exercise of 40,000 common stock warrants at $.01 per common
share, to issue 245,000 common stock warrants, exercisable at $.01 per common share and to honor,
if and when presented for exercise, 511,200 previously issued unexercised warrants (all included in
above
total). The 40,000 common shares and 245,000 common stock warrants were deposited with the Monroe
County, New York Treasurer and may not be accessed by the firm pending the appellate courts
disposition of the companys appeal of the May 8, 2006 court order. In addition, the exercise by
the firm of the 511,200 unexercised warrants is also stayed pending the companys appeal. (See
Notes J)(d)
    
    The company issued an aggregate 123,500 warrants to its nonmanagement directors for
services rendered to the board under its Nonmanagement Directors Stock Plan prior to its amendment
on October 13, 2006. For the years ended December 31, 2006, 2005 and 2004, the company issued
26,500, 44,000 and 53,000 warrants, immediately exercisable for a ten year term at $.01 per common
share. No further warrants are issuable under the Plan as modified by the board of directors on
October 13, 2006 (See Note G [4]). During the periods ended March 31, 2007 and 2006, 6,000 and
15,000 of these warrants were exercised for proceeds of $60 and $150.(e)
    
    In 2005, the company issued 12,000 warrants to a consultant,
immediately exercisable at .01 per common share. During 2005, 3,000 warrants were exercised for proceeds of $30. In 2006, the
company issued 30,000 warrants to consultants exercisable immediately for a ten year term at $5.00
per common share.(f)
    
    During 2005, the company issued 210,000 warrants to certain engineering consultants,
exercisable immediately for a ten year term at $5.00 per common share. During 2006, the company
issued 295,000 warrants to certain engineering consultants exercisable over a ten year term at
$5.00 per common share, but only exercisable if the company sells, licenses or otherwise transfers
one or more technologies for value. None of these warrants have been exercised through March 31,
2007.(g)
    
    During 2005, the company issued 6,000 warrants to a consultant, exercisable at .01 per
common share. None of these warrants have been exercised through March 31, 2007.(h)
    
    During 2005, the company issued 62,500 warrants to investors in connection with their
purchase of 62,500 Class A Preferred, exercisable at $.01 per common share. 50,000 of these
warrants were exercised in 2005 for proceeds of $625. During 2006, the company issued 137,932
warrants to investors along with their purchase 162,000 Class A Preferred and 20,000 Class B
Preferred, all immediately exercisable at $.01 per common share. During the year ended December,
2006, 125,432 of these warrants were exercised for proceeds of approximately $1,254. 12,500 of
these warrants were exercised during the quarter ended March 31, 2007 for proceeds of $125.




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Note
G  CAPITAL DEFICIENCY (continued)
 [8]
    
    Warrants:(continued)
 (i)
    
    During 2006, one investor purchased 20,500 warrants immediately exercisable at $1.00 per common share
for a purchase price of $2,000. None of these warrants have been exercised through March 31, 2007.(j)
    
    In connection with its business and financial operations for the year ended December 31, 2006, the
company issued 91,583 warrants, immediately exercisable over a ten year term at $.01 per common
share. During the year ended December 31, 2006, 91,083 of these warrants were exercised for proceeds
of $910. None of these warrants were exercised during the quarter
ended March 31, 2006. 500 of these
warrants were exercised during the quarter ended March 31, 2007 for net proceeds of $5.(k)
    
    During 2006, the company issued 400,000 warrants immediately exercisable for ten years at an exercise
price of $3.27 per common share to a business consultant. None of these warrants have been exercised
through March 31, 2007.(l)
    
    During 2006, the company issued 200,000 warrants immediately exercisable for ten years at an exercise
price of $3.75 per common share to its governmental affairs consultant. None of these warrants have
been exercised through March 31, 2007.(m)
    
    During the quarter ended March 31, 2007, the company
issued 50,000 fully vested warrants exercisable for a ten year
period at $5.00 per common share upon the happening of a commercializing event. The warrants were
issued to a consultant who assisted the company develop its New York State and national school bus
program.
  WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicWarrants
    
    Price
    
    Term
    
    ValueOutstanding at January 1, 2007
    
    
    2,652,700
    
    
    $
    2.19
    
    
    5.83 yearsGranted
    
    
    50,000
    
    
    
    5.00
    
    
    9.91 yearsExercised
    
    
    (19,000
    )
    
    
    0.01Canceled or expiredOutstanding at March 31, 2007
    
    
    2,683,700
    
    
    $
    2.25
    
    
    5.32 years
    
    $
    5,824,000Exercisable at March 31, 2007
    
    
    1,713,700
    
    
    $
    2.01
    
    
    4.56 years
    
    $
    4,099,000




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20 
 Note
G  CAPITAL DEFICIENCY (continued)
 [9]
    
    Issuance of Stock and Warrants by Subsidiary:The following is a summary of warrants outstanding for the Ice Subsidiary:
 Three Months EndedMarch 31,2007
    
    2006Outstanding at the beginning of the period
    
    
    103,948
    
    
    
    103,948Granted
    
    
    
    
    
    
    Outstanding at the end of the period
    
    
    103,948
    
    
    
    103,948
  [10]
    
    Shares Issued for Future Consulting ServicesOn September 17, 2005, certain consultants created a trust to enable
them to sell business consultants shares issued to them by the
company under their consultant agreements. The company issued 50,000
business consultant shares valued at $102,000 on September 27, 2005,
contingent on the performance by the consultants of future services
under such consultant agreements. The company fair values the shares
issued to the trust using the closing market price of the companys
common stock on the date immediately prior to the date of issuance.
No shares were sold in the trust during the 2005 calendar year.During the calendar year ended December 31, 2006, the company issued
an aggregate 160,000 business consultant common shares valued in the
aggregate at $419,000 to satisfy the payment of invoices submitted by
the consultants for services rendered. During the year ended December
31, 2006, the trustee sold an aggregate 199,260 business consultant
common shares for aggregate proceeds of $498,990 and distributed the
proceeds from the trust to the consultants in accordance with the
trusts terms.No business consultant common shares were issued to the trust for the
three month period ended March 31, 2006. For the three month period
ending March 31, 2007, the company issued 10,000 business consultant
common shares valued in the aggregate at $44,500 to satisfy invoices
submitted by the consultants for services rendered. During the three
month periods ended March 31, 2007 and 2006, the trustee sold 22,504
and 103,100 business consultant common shares and distributed
$107,242 and $49,663 from the trust to the consultants in accordance
with the trusts terms.The companys payment obligations with respect to the consultant
agreements are met once it has issued shares to the trust in
accordance with directives received from the consultants and the
consultants, not the company, bear the risk of loss in the event the
proceeds of stock sales by the trustee are less than the value of the
stock contributed to the trust by the company on the date of
contribution.




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21 
 Note G  CAPITAL DEFICIENCY (continued)
 [11]
    
    Commercializing Event PlanOn October 13, 2006, the board of directors adopted a Commercializing
Event Plan (Event Plan) designed to reward the companys directors,
executives and certain administrative personnel for the successful
completion of one or more commercializing events. Currently, eight
people participate in the Event Plan. Under the Event Plan, if a
commercializing event occurs, each participant will receive 50,000
business consultants common shares for each one of the technologies
commercialized. If a second commercializing event occurs with respect
to the same technology, each participant will receive an additional
25,000 business consultants common shares. No additional shares are
issuable for any additional commercializing event for the same
technology. Under the Event Plan, this commercializing event sequence
applies separately to each of the companys eight automotive
technologies.In the event the entire company was to be acquired by a third party,
regardless of the manner of acquisition, each participant would
receive 400,000 business consultants common shares upon the
consummation of the transaction. This feature of the Event Plan
operates independently of the feature whereby each participant
receives shares for a first or second commercializing event. Thus,
under the Event Plan, it is possible for each participant to receive
up to 1,000,000 business consultants common shares if each and every
patented automotive invention was the subject of both a first and
second commercializing event (8x75,000 shares) and then, subsequent
to and independent of such events, the entire company were to be
sold.No shares have been issued under the Event Plan since its inception
through the three month period ended March 31, 2007.
 Note H  Commitments and Other Matters
 [1]
    
    Consulting AgreementsOn June 30, 2005, the company entered into a non-exclusive two year consulting agreement for
engineering design services. Under the terms of the consulting agreement, the company was required to
issue annually 12,000 fully and immediately vested $.01 warrants exercisable into common stock of the
company, payable on a quarterly basis. In addition, the company granted 100,000 stock options under
its 1998 Stock Option Plan to acquire shares of its common stock to its engineering design consultant
during the three months ended June 30, 2005. The option vested immediately and has a term of ten
years. The exercise price for the option is $5.00 per share. The company valued the options at
$247,000 using the Black-Scholes option/pricing model and charged operations. This agreement was
terminated in the third quarter of 2005.During 2005, the company entered into non-exclusive two year consulting agreements with various
consultants. Under the terms of the consulting agreements, the company will issue payment to be made
in cash, business consultants stock or a combination hereof, in the companys sole discretion. The
consultants were issued common stock warrants exercisable at $5.00 per common share. The number of
warrants aggregated 210,000. Such warrants are fully vested, exercisable immediately and have a ten
year term. The company valued the warrants at $377,000 using the Black-Scholes option/pricing model
and charged operations.During the year ended December 31, 2006, the company issued an additional 295,000 warrants exercisable
immediately over a ten year term at $5.00 per common share. The company valued the warrants at
$1,441,095
using the Black-Scholes option/pricing model and charged operations. The company also issued 200,000
warrants in connection with its engagement of a governmental affairs consultant. The warrants are
immediately exercisable over a 10 year period at an exercise price of $3.75 per common share. The
company
valued the warrants at $948,165.No additional securities have been issued under new and/or existing consulting agreements during the
three month period ended March 31, 2007 and no outstanding securities issued under these consulting
agreements were exercised during the three month period ended March 31, 2007.




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22 
 
 Note H  Commitments and Other Matters (continued)
 [2]
    
    Variable Gear, LLCOn January 1, 2008, the company is required to purchase the 51% membership interest it does not
own in Variable Gear LLC at the then fair market value as defined. The company does not share in
any profit or losses in this entity. At March 31, 2007, such fair market value cannot yet be
reasonably estimated.[3]
    
    Leases:The company has leased premises for use as its executive offices. The lease is for a period of 3
years, commencing July 1, 2004 expiring on June 30, 2007 with monthly rental payments of
approximately $2,200. The company is also responsible for its share of real estate taxes, certain
maintenance and repair costs, and increases in utility costs associated with the premises.On August 1, 2004, the company sublet, as a tenant, a portion of a facility for a term of six
months at a rental rate of $600 per month. On December 31, 2004, the company purchased from the
previous owner certain assets for approximately $68,000 and assumed the lease of the underlying
tenant for the entire premises. The lease calls for payment of a rental of $2,100 per month. The
initial lease term expired on February 28, 2007 and was renewed for an additional two years,
through February 28, 2009.On March 1, 2005, the company entered into a one year lease with a shareholder pursuant to which
the company rents an office, conference room, shop and manufacturing facility. The company is also
furnished with the services of three engineers and two machine operators at the facility. The
company is obligated to pay 10,000 shares of its common stock on a monthly basis for the facility
and services. This lease was not renewed.Rent expense for the three month period ended March 31, 2007 and 2006 was approximately $13,000
and $7,000, respectively.Minimum future obligations under all leases are as follows:
 Year Ending March 31,2008
    
    $
    31,0002009
    
    $
    25,000




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23 
 Note I  Management Agreement
   th




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24 
 Note I Management Agreement (continued)




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25 
 Note J Litigation




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26 
 Note J Litigation (continued)




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27 
 Note K  Subsequent Events




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28 
 
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 PLAN OF OPERATION
 (a)
    
    Overall Business Strategy
  o
    
    to license or sell any one or a number of its
automotive technologies (i.e. the infinitely variable
transmissions, the hydraulic pump/motor system, the
Iso-Torque differential, the spherical gearing
constant velocity joint mechanism, and the full
terrain vehicle) in order to provide the capital
management believes is necessary to commercialize its
FTV worldwide, especially in the Asian, African,
South and Central American, and Eastern European
markets.
  o
    
    to continue its working relationship with the National Aeronautics and Space Administration with respect to that agencys development of a lunar rover
to return to the moon by approximately the year 2020;o
    
    to continue refining the electronic controls for the
companys generation III infinite variable
transmission and to analyze the fuel-efficiencies and
pollution reduction capabilities of such transmission
as compared to conventional automatic transmission
technologies;o
    
    to utilize such analysis to launch the companys New
York State and national school bus program;o
    
    to initiate working relationships with automotive
manufacturers, first-tier suppliers and local
municipalities, including entering into supply
contracts with such companies and municipalities,
either in preparation for or in concert with one or
more licensing arrangements with such entities;o
    
    to pursue ongoing discussions with local, state and
national governmental officials to provide monies for
the Companys New York State and national school bus
program;o
    
    to continue demonstrating the companys automotive
technologies to interested representatives of the
traditional auto industry, government and innovative
auto companies with advanced automotive technologies
for selected, niche markets;o
    
    to adapt and modify the companys automotive
technologies to the specification requirements of
end-users with whom the company may be engaged and as
adapted and modified, to file new patent applications
to the extent necessary and appropriate.
 www.torvec.com




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29 (a) Overall Business Strategy (CONTINUED)




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30 (b) Current Status of Product Development
       (c) Company Expenses




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31 (d) Liquidity and Capital Resources




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32 (e) Critical Accounting Policies
 Revenue Recognition
  Impairment of Long-Lived Assets
     (f) Impact of Inflation
  (g) Quarterly Fluctuations




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33 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   Forward-Looking Statements
   a.
    
    the companys ability to raise significant capital to fund its plan of operation;b.
    
    the companys ability to sell and/or commercialize one or more of its
technologies, and/or to enter into collaborative joint working arrangements,
formal joint venture arrangements with domestic and/or foreign governments,
automotive industry manufacturers and suppliers to manufacture and promote the
companys inventions;c.
    
    industry and consumer acceptance of the companys inventions;d.
    
    the level of competition and resistance to the companys inventions in the
automotive and related industries;e.
    
    general economic and competitive conditions in the markets and countries in
which the company will operate, and the risks inherent in any future
international operations;f.
    
    the strength of the U.S. dollar against currencies of other countries where the
company may operate, as well as cross-currencies between the companys future
operations outside of the U.S. and other countries with whom it transacts
business.g.
    
    changes in business, political and economic conditions and the threat of future
terrorist activity in the U.S. and other parts of the world and related military
action.




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34 
 
 Item 4. CONTROLS AND PROCEDURES .
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Litigation




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




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Item 6. Exhibits
  (2)
    
    Plan of acquisition, reorganization, arrangement, liquidation, or succession
 2.1
    
    Agreement and Plan of Merger, dated November 29, 2000 by and among Torvec Subsidiary Corporation, Torvec, Inc.,
UTEK Corporation and ICE Surface Development, Inc. incorporated by reference to Form 8-K filed November 30,
2000 and Form 8K/A filed February 12, 2001.
 (3)
    
    Articles of Incorporation, By-laws
 3.1
    
    Certificate of Incorporation, incorporated by reference to Form 10-SB/A , Registration
Statement, registering Companys $.01 par value common stock under section 12(g) of the
Securities Exchange Act of 1934;3.2
    
    Certificate of Amendment to the Certificate of Incorporation dated August 30, 2000,
incorporated by reference to Form SB-2 filed October 19, 2000;3.3
    
    Certificate of Correction dated March 22, 2002, incorporated by reference to Form 10-KSB
filed for fiscal year ended December 31, 2002;3.4
    
    By-laws, as amended by shareholders on January 24, 2002, incorporated by reference to
Form 10-KSB filed for fiscal year ended December 31, 2002;3.5
    
    Certification of Amendment to the Certificate of Incorporation dated October 21, 2004
setting forth terms and conditions of Class B Preferred, incorporated by reference to
Form 10-QSB filed for fiscal quarter ended September 30, 2004.3.6
    
    Certificate of Amendment to the Certificate of Incorporation dated January 26, 2007
increasing the authorized common shares from 40,000,000 to 400,000,000 common shares,
incorporated by reference
to annual report ( Form 10-K ) filed for the calendar year ended December 31, 2006.
 (4)
    
    Instruments defining the rights of holders including indenturesNone(9)
    
    Voting Trust AgreementNone(10)
    
    Material Contracts
 10.1
    
    Certain Employment Agreements, Consulting
Agreements, certain assignments of
patents, patent properties, technology
and know-how to the Company, Neri Service
and Space Agreement and Ford Motor
Company Agreement and Extension of Term,
all incorporated by reference to Form
10-SB/A, Registration Statement,
registering Companys $.01 par value
common stock under section 12(g) of the
Securities Exchange Act of 1934;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;




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10.3
    
    The Companys Business Consultants Stock Plan, incorporated by
reference to Form S-8, Registration Statement, registering 200,000
shares of the Companys $.01 par value common stock reserved for
issuance thereunder, effective June 11, 1999, as amended by
reference to Form S-8 Registration Statements registering an
additional 200,000, 200,000, 100,000, 800,000, 250,000, 250,000,
350,000, 250,000, and 2,500,000 shares of the Companys $.01 par
value common stock reserved for issuance thereunder, effective
October 5, 2000, November 7, 2001, December 21, 2001, February 1,
2002, November 12, 2002, January 22, 2003, May 23, 2003, November
26, 2003, and April 20, 2004 respectively;10.4
    
    Termination of Neri Service and Space Agreement dated August 31,
1999, incorporated by reference to Form 10-QSB filed for the quarter
ended September 30, 1999;10.5
    
    Operating Agreement of Variable Gear, LLC dated June 28, 2000,
incorporated by reference to Form 10-QSB filed for the quarter ended
June 30, 2000;10.6
    
    License Agreement between Torvec, Inc. and Variable Gear, LLC dated
June 28, 2000, incorporated by reference to Form SB-2 filed October
19, 2000;10.7
    
    Investment Agreement with Swartz Private Equity, LLC dated September
5, 2000, together with attachments thereto, incorporated by
reference to Form 8-K filed October 2, 2000;10.8
    
    Extension of and Amendment to Consulting Agreement with James A.
Gleasman, incorporated by reference to Form 10-KSB filed for the
fiscal year ended December 31, 2000;10.9
    
    Extension of and Amendment to Consulting Agreement with Keith E.
Gleasman, incorporated by reference to Form 10-KSB filed for the
fiscal year ended December 31, 2000;10.10
    
    Extension of and Amendment to Consulting Agreement with Vernon E.
Gleasman, incorporated by reference to Form 10-KSB filed for the
fiscal year ended December 31, 2000;10.11
    
    Option and Consulting Agreement with Marquis Capital, LLC dated
February 10, 1999, incorporated by reference to Form 10-QSB filed
for quarter ended March 31, 2001;10.12
    
    Option and Consulting Agreement with PMC Direct Corp., dated
February 10, 1999, incorporated by reference to Form 10-QSB filed
for quarter ended March 31, 2001;10.13
    
    Investment Banking Services Agreement with Swartz Institutional
Finance (Dunwoody Brokerage Services, Inc.) dated December 8, 2000,
incorporated by reference to Form 10-QSB filed for quarter ended
March 31, 2001;10.14
    
    Employment Agreement with Michael Martindale, Chief Executive
Officer, dated August 1, 2001, incorporated by reference to Form
10-QSB filed for fiscal quarter ended September 30, 2001;10.15
    
    Employment Agreement with Jacob H. Brooks, Chief Operating Officer,
dated August 1, 2001, incorporated by reference to Form 10-QSB filed
for fiscal quarter ended September 30, 2001;10.16
    
    Employment Agreement with David K. Marshall, Vice-President of
Manufacturing, dated September 1, 2001, incorporated by reference to
Form 10-QSB filed for fiscal quarter ended September 30, 2001;




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10.17
    
    Investment Banking Services Agreement with Swartz Institutional
Finance (Dunwoody Brokerage Services, Inc.), as amended, dated
October 23, 2001, incorporated by reference to Form 10-QSB filed for
fiscal quarter ended September 30, 2001;10.18
    
    Stock Option Agreement with Samuel Bronsky, Chief Financial and
Accounting Officer, dated August 28, 2001, incorporated by reference
to Form 10-QSB filed for fiscal quarter ended September 30, 2001;10.19
    
    Pittsford Capital Group, LLC Agreement dated January 30, 2002,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2001;10.20
    
    Gleasman-Steenburgh Indemnification Agreement dated April 9, 2002,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2001;10.21
    
    Series B Warrant dated April 10, 2002, incorporated by reference to
Form 10-KSB filed for fiscal year ended December 31, 2001;10.22
    
    Billow Butler & Company, LLC investment banking engagement letter
dated October 1, 2003, incorporated by reference to Form 10-QSB
filed for fiscal quarter ended September 30, 2003;10.23
    
    Letter of Acknowledgement and Agreement with U.S. Environmental
Protection Agency dated February 4, 2004, incorporated by reference
to Form 10-KSB filed for fiscal year ended December 31, 2003;10.24
    
    Letter Agreement with CXO on the GO, L.L.C. dated February 20, 2004,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2003;10.25
    
    Letter Amendment with CXO on the GO, L.L.C. dated February 23, 2004,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2003;10.26
    
    Lease Agreement for premises at Powder Mills Office Park, 1169
Pittsford-Victor Road, Suite 125, Pittsford, New York 14534, dated
July 16, 2004; incorporated by reference to Form 10-QSB filed for
fiscal quarter ended June 30, 2004;10.27
    
    Lease Agreement for testing facility and Mustang dynamometer, dated
July 21, 2004; incorporated by reference to Form 10-QSB filed for
fiscal quarter ended June 30, 2004;10.28
    
    Advisory Agreement with PNB Consulting, LLC, 970 Peachtree
Industrial Blvd., Suite 303, Suwanee, Georgia 30024; incorporated by
reference to Form 10-QSB filed for fiscal quarter ended June 30,
2004;10.29
    
    Agreement between Torvec and ZT Technologies, Inc. dated July 21,
2004, incorporated by reference to Form 10-QSB filed for fiscal
quarter ended September 30, 2004;10.30
    
    Assignment and Assumption of Lease between William J. Green and
Ronald J. Green and Torvec, Inc. effective as of December 31, 2004,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31,2004;10.31
    
    Bill of Sale between Dynamx, Inc. and Torvec, Inc. for equipment and
machinery, incorporated by reference to Form 10-KSB filed for fiscal
year ended December 31, 2004;10.32
    
    Lease and Services Agreement between Robert C. Horton as Landlord
and Torvec, Inc. as Tenant dated March 18, 2005, incorporated by
reference to Form 10-KSB filed for fiscal year ended December 31,
2004;




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10.33
    
    Settlement Agreement and Mutual Release between Torvec, Inc. and ZT
Technologies, Inc. dated March 29, 2005, incorporated by reference
to Form 10-QSB filed for fiscal quarter ended March 31, 2005;10.34
    
    Advisory Agreement between Robert C. Horton and Torvec, Inc. dated
February 15, 2005, incorporated by reference to Form 10-QSB filed
for fiscal quarter ended March 31, 2005;10.35
    
    Lease and Services Agreement between Dennis J. Trask as Landlord and
Torvec, Inc. as Tenant dated April 18, 2005, incorporated by
reference to Form 10-QSB filed for fiscal quarter ended March 31,
2005;10.36
    
    Consulting Agreement with Matthew R. Wrona, dated June 30, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended June 30, 2005;10.37
    
    Option Agreement between Matthew R. Wrona and Torvec, Inc. dated
June 30, 2005, incorporated by reference to Form 10-QSB filed for
fiscal quarter ended June 30, 2005;10.38
    
    Trust Agreement between Matthew R. Wrona, Donald Gabel, Lawrence
Clark, Steven Urbanik, Floyd G. Cady,Jr., and Michael Pomponi as
Grantors and Richard B. Sullivan as Trustee, dated September 22,
2005, incorporated by reference to Form 10-QSB filed for fiscal
quarter ended September 30, 2005;10.39
    
    Consultant Agreement with Floyd G. Cady, Jr., dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.40
    
    Consultant Agreement with Lawrence W. Clark, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.41
    
    Consultant Agreement with Donald W. Gabel, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.42
    
    Consultant Agreement with Michael A. Pomponi, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.43
    
    Consultant Agreement with Steven Urbanik, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.44
    
    Consultant Agreement with Kiwee Johnson, dated September 30, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter
ended September 30, 2005;10.45
    
    Confidentiality Agreement with Joseph B. Rizzo, dated October 24,
2005,incorporated by reference to Form 10-QSB filed for fiscal
quarter ended September 30, 2005.10.46
    
    Minutes of meeting Board of Directors Torvec, Inc., held October 19,
2004, creating the non-management directors plan, incorporated by
reference to Form 10-KSB filed for the fiscal year ended December
31, 2006.10.47
    
    Excerpts from minutes of the meeting of Board of Directors Torvec,
Inc., adopting changes to the non-management directors plan creating
a commercialized event plan, approving an increase in shares to be
issued under business consulting plan and adopting recommendation
that shareholders increase number of authorized common shares from
40,000,000 to 400,000,000 common shares, incorporated by reference
to Form 8-K filed on October 16, 2006.




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10.48
    
    Order of Supreme Court of the State of New York with respect to litigation between the company and a
management consulting firm, incorporated by reference to Current Report (Form 8-K) filed on June 20,
2006;10.49
    
    Letter agreement with American Continental Group, LLC, executed on October 22, 2006, incorporated
in reference to Current Report (Form 8-K) filed on October 30, 2006;10.50
    
    New York State School Bus Proposal incorporated by reference to Quarterly Report (Form 10-Q) filed
for quarter ended March 31, 2006;10.51
    
    Order of Supreme Court of the State of New York directing the Monroe County Clerk to release back
to the company 40,000 common shares and 245,000 common stock warrants issued to a management
consulting firm with which the company is in litigation and held in escrow by such Clerk by virtue
of a previous court order and directing the return to the company of a $250,000 (less
administrative fee) undertaking deposited with the Monroe County Treasurer in connection with the
same litigation.
 (11)
    
    Statement regarding computation of per share earnings (loss)Not applicable(14)
    
    Code of Ethics(16)
    
    Letter on change in certifying accountantNone(18)
    
    Letter regarding change in accounting principlesNone(20)
    
    Other documents or statements to security holdersNone(21)
    
    Subsidiaries of the registrantIce Surface Development, Inc. (New York)Iso-Torque Corporation (New York)IVT Diesel Corp. (New York)Variable Gear, LLC (New York)(22)
    
    Published report regarding matters submitted to vote of security holdersNone




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(23.1)
    
    Consents of experts and counselEisner LLP Consent(24)
    
    Power of attorneyNone(31)
    
    Rule 13(a)-14(a)/15(d)-14(a) Certifications(32)
    
    Section 1350 Certifications(99)
    
    Additional exhibitsNone




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SIGNATURES
  TORVEC, INC.Date: May 14, 2007
    
    By: /s/ James Y. Gleasman
James Y. Gleasman, Chief Executive Officer
  Dated: May 14, 2007
    
    By: /s/ James Y. GleasmanJames Y. Gleasman, Chief Executive Officer and Interim
Chief Financial Officer




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EXHIBIT INDEX
 EXHIBIT
    
    
    
    
    
    
    
    PAGE(2)
    
    Plan of acquisition, reorganization, arrangement, liquidation, or succession2.1
    
    
    Agreement and Plan of Merger, dated November 29, 2000 by and among Torvec
Subsidiary Corporation, Torvec, Inc., UTEK Corporation and ICE Surface
Development, Inc. incorporated by reference to Form 8-K filed November 30, 2000
and Form 8K/A filed February 12, 2001.
    
    N/A(3)
    
    Articles of Incorporation, By-laws3.1
    
    
    Certificate of Incorporation, incorporated by reference to Form 10-SB/A,
Registration Statement, registering Companys $.01 par value common stock under
section 12(g) of the Securities Exchange Act of 1934;
    
    N/A3.2
    
    
    Certificate of Amendment to the Certificate of Incorporation dated
August 30, 2000, incorporated by reference to Form SB-2 filed
October 19, 2000;
    
    N/A3.3
    
    
    Certificate of Correction dated March 22, 2002, incorporated by reference to Form
10-KSB filed for fiscal year ended December 31, 2002;
    
    N/A3.4
    
    
    By-laws, as amended by shareholders on January 24, 2002, incorporated by reference
to Form 10-KSB filed for fiscal year ended December 31, 2002;
    
    N/A3.5
    
    
    Certification of Amendment to the Certificate of Incorporation dated October 21,
2004 setting forth terms and conditions of Class B Preferred, incorporated by
reference to Form 10-QSB filed for fiscal quarter ended September 30, 2004.
    
    N/A3.6
    
    
    Certificate of Amendment to the Certificate of Incorporation dated January 26,2007
increasing authorized common shares from 40,000,000 to 400,000,000 common shares
    
    N/A(4)
    
    Instruments defining the rights of holders including indenturesNone
    
    N/A(9)
    
    Voting Trust AgreementNone
    
    N/A(10)
    
    Material Contracts10.1
    
    
    Certain Employment Agreements, Consulting Agreements, 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




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EXHIBIT
    
    
    
    
    
    
    
    PAGE10.2
    
    
    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/A10.3
    
    
    The Companys Business Consultants Stock Plan, incorporated by
reference to Form S-8, Registration Statement, registering 200,000
shares of the Companys $.01 par value common stock reserved for
issuance thereunder, effective June 11, 1999 as amended by reference
to Form S-8 Registration Statement registering an additional 200,000,
200,000, 100,000, 800,000, 250,000, 250,000, 350,000, 250,000 and 2,500,000
shares of the Companys $.01 par value common stock reserved for issuance
thereunder, effective October 5, 2000, November 7, 2001, December 21, 2001,
February 1, 2002, November 12, 2002, January 22, 2003, May 23, 2003,
November 26, 2003 and April 20, 2004 respectively;
    
    N/A10.4
    
    
    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/A10.5
    
    
    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/A10.6
    
    
    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/A10.7
    
    
    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/A10.8
    
    
    Extension of and Amendment to Consulting Agreement with James A. Gleasman,
incorporated by reference to Form 10-KSB filed for the fiscal year ended
December 31, 2000;
    
    N/A10.9
    
    
    Extension of and Amendment to Consulting Agreement with Keith E. Gleasman,
incorporated by reference to Form 10-KSB filed for the fiscal year ended
December 31, 2000;
    
    N/A10.10
    
    
    Extension of and Amendment to Consulting Agreement with Vernon E. Gleasman,
incorporated by reference to Form 10-KSB filed for the fiscal year ended
December 31, 2000;
    
    N/A10.11
    
    
    Option and Consulting Agreement with Marquis Capital, LLC dated February 10,
1999, incorporated by reference to Form 10-QSB filed for quarter ended March
31, 2001;
    
    N/A




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




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##### Table of Contents



EXHIBIT
    
    
    
    
    
    
    
    PAGE10.24
    
    
    Letter Agreement with CXO on the GO, L.L.C. dated February 20, 2004,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2003;
    
    N/A10.25
    
    
    Letter Amendment with CXO on the GO, L.L.C. dated February 23, 2004,
incorporated by reference to Form 10-KSB filed for fiscal year ended
December 31, 2003;
    
    N/A10.26
    
    
    Lease Agreement for premises at Powder Mills Office Park, 1169
Pittsford-Victor Road, Suite 125, Pittsford, New York 14534, dated July 16,
2004, incorporated by reference to Form 10-QSB filed for fiscal quarter
ended June 30, 2004;;
    
    N/A10.27
    
    
    Lease Agreement for testing facility and Mustang dynamometer, dated July 21,
2004; incorporated by reference to Form 10-QSB filed for fiscal quarter
ended June 30, 2004;
    
    N/A10.28
    
    
    Advisory Agreement with PNB Consulting, LLC, 970 Peachtree Industrial Blvd.,
Suite 303, Suwanee, Georgia 30024; incorporated by reference to Form 10-QSB
filed for fiscal quarter ended June 30, 2004;
    
    N/A10.29
    
    
    Agreement between Torvec and ZT Technologies, Inc. dated July 21, 2004,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2004;
    
    N/A10.30
    
    
    Assignment and Assumption of Lease between William J. Green and Ronald J.
Green and Torvec, Inc. effective as of December 31, 2004, incorporated by
reference to Form 10-KSB filed for fiscal year ended December 31, 2004;
    
    N/A10.31
    
    
    Bill of Sale between Dynamx, Inc. and Torvec, Inc. for equipment and
machinery, incorporated by reference to Form 10-KSB filed for fiscal year
ended December 31, 2004;
    
    N/A10.32
    
    
    Lease and Services Agreement between Robert C. Horton as Landlord and
Torvec, Inc. as Tenant dated March 18, 2005, incorporated by reference to
Form 10-KSB filed for fiscal year ended December 31, 2004;
    
    N/A10.33
    
    
    Settlement Agreement and Mutual Release between Torvec, Inc. and ZT
Technologies, Inc. dated March 29, 2005, incorporated by reference to Form
10-QSB filed for fiscal quarter ended March 31, 2005;
    
    N/A10.34
    
    
    Advisory Agreement between Robert C. Horton and Torvec, Inc. dated February
15, 2005, incorporated by reference to Form 10-QSB filed for fiscal quarter
ended March 31, 2005;
    
    N/A10.35
    
    
    Lease and Services Agreement between Dennis J. Trask as Landlord and Torvec,
Inc. as Tenant dated April 18, 2005, incorporated by reference to Form
10-QSB filed for fiscal quarter ended March 31, 2005;
    
    N/A




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##### Table of Contents



EXHIBIT
    
    
    
    
    
    
    
    PAGE10.36
    
    
    Consulting Agreement with Matthew R. Wrona, dated June 30, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended June
30, 2005;
    
    N/A10.37
    
    
    Option Agreement between Matthew R. Wrona and Torvec, Inc. dated June 30,
2005, incorporated by reference to Form 10-QSB filed for fiscal quarter
ended June 30, 2005;
    
    N/A10.38
    
    
    Trust Agreement between Matthew R. Wrona, Donald Gabel, Lawrence Clark,
Steve Urbanik, Floyd G. Cady, Jr. and Michael Pomponi as Grantors and
Richard B. Sullivan as Trustee, dated September 22, 2005, incorporated by
reference to Form 10-QSB filed for fiscal quarter ended September 30, 2005;
    
    N/A10.39
    
    
    Consultant Agreement with Floyd G. Cady, Jr., dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.40
    
    
    Consultant Agreement with Lawrence W. Clark, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.41
    
    
    Consultant Agreement with Donald W. Gabel, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.42
    
    
    Consultant Agreement with Michael A. Pomponi, dated October 1, 2005,
incorporated b y reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.43
    
    
    Consultant Agreement with Steven Urbanik, dated October 1, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.44
    
    
    Consultant Agreement with Kiwee Johnson, dated September 30, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005;
    
    N/A10.45
    
    
    Confidentiality Agreement with Joseph B. Rizzo, dated October 24, 2005,
incorporated by reference to Form 10-QSB filed for fiscal quarter ended
September 30, 2005
    
    N/A10.46
    
    
    Minutes of meeting Board of Directors Torvec, Inc., held October 19, 2004,
creating the non-management directors plan, incorporated by reference to Form
10-KSB for fiscal year ended December 31, 2005
    
    N/A10.47
    
    
    Excerpts from minutes of the meeting of Board of Directors Torvec, Inc., adopting
changes to the non-management directors plan creating a commercializes event
plan, approving an increase in shares to be issued under business consulting plan and
adopting recommendation that shareholders increase number of authorized common
Shares from 40,000,000 to 400,000,000, incorporated by reference to Form 8-K
filed on October 16, 2006.
    
    N/A




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##### Table of Contents



EXHIBIT
    
    
    
    
    
    
    
    PAGE10.48
    
    
    Order of Supreme Court of the State of New York with respect to litigation between the
company and a management consulting firm, incorporated by reference to Current Report
(Form 8-K) filed on June 20, 2006;
    
    
    N/A10.49
    
    
    Letter agreement with American Continental Group, LLC dated October 27, 2006
incorporated by reference to Current Report ( Form 8-K) filed on October 30, 2006;10.50
    
    
    New York State School Bus Proposal, incorporated by reference to Quarterly Report (Form
10-Q) filed for the quarter ended March 31, 2006;10.51
    
    
    Order of Supreme Court of the State of New York directing the Monroe County Clerk to
release back to the company 40,000 common shares and 245,000 common stock warrants
issued to a management consulting firm with which the company is in litigation and held
in escrow by such Clerk by virtue of a previous court order and directing the return to
the company of a $250,000 (less administrative fee) undertaking deposited with the
Monroe County Treasurer in connection with the same litigation.
    
    
    51(11)
    
    Statement regarding computation of per share earnings (loss)
    
    
    N/ANot applicable(14)
    
    Code of Ethics
    
    
    N/A(16)
    
    Letter on change in certifying accountant
    
    
    N/ANone(18)
    
    Letter regarding change in accounting principles
    
    
    N/ANone(20)
    
    Other documents or statements to security holders
    
    
    N/ANone(21)
    
    Subsidiaries of the registrant
    
    
    N/AIce Surface Development, Inc. (New York)Iso-Torque Corporation (New York)IVT Diesel Corp. (New York)Variable Gear, LLC (New York)




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##### Table of Contents



EXHIBIT
    
    
    
    PAGE(22)
    
    Published report regarding matters submitted to vote of security holders
    
    
    N/ANone(23)
    
    Consents of experts and counsel
    
    
    N/A(24)
    
    Power of attorney
    
    
    N/ANone(31.1)
    
    Rule 13(a)-14(a)/15(d)-14(a) Certifications
    
    
    52(32)
    
    Section 1350 Certifications
    
    
    53(99)
    
    Additional exhibits
    
    
    N/ANone