January 6, 2005

Torvec Announces Formation of IVT™ Diesel Corporation

I am pleased to share with you that Torvec has incorporated a 100% owned subsidiary, IVT™ Diesel Corporation. This strategic business unit has been formed to facilitate joint ventures with other strategic partners to offer complete diesel drive-train units to the US military and for use in commercial vehicles, including Class 3 trucks and buses.

We anticipate that the diesel drive-train units offered will be loaded with technology driven features which will significantly improve performance in the recipient vehicles.

The units will incorporate the following Torvec technologies and assets:

• The rights to the IVT™ patent for use with diesels
• An agreement by Iso-Torque Corporation to supply Iso-Torque differentials
• Current CV joint patent and pending heavy-duty CV joint patents
• The Dodge 4x4 diesel powered vehicle
• 6000 psi pump and motor technology (The 6000 psi pump and motor are necessary to build the IVT™ for military Humvees and Class 3 trucks and school buses)
• US military and robotic rights to our Full Terrain Vehicle (FTV™).

It is anticipated that the joint venture partners will furnish custom electronic engine control units, high performance engines, ABS braking systems and emission control systems as well as manufacturing/assembly facilities. The combined technological improvements should result in fuel savings, lower environmental emissions, increased driving performance, enhanced safety and greater reliability and durability.

The market opportunities for diesel drive-train units have increased dramatically for both US military and commercial applications. The increased weight of armoring the Humvee military vehicles as well as the difficult desert terrain where they are presently deployed requires continuous retrofitting of engines, transmissions and parts. Moreover, the 2007 Government emissions standards for commercial vehicles, higher fuel prices, the high level of school bus emissions and the resulting health concerns faced by state and municipal governments, all present opportunities for Torvec’s proprietary technology. Torvec’s IVT™ Diesel Corporation has been established to work with joint venture partners to provide such innovative, cost effective solutions.

Our funding strategy presently includes capital contributions from joint venture partners and military/commercial contracts which may lead, in time, to a public offering.

I am also happy to inform you that testing of our IVT™ equipped GM Tahoe is progressing nicely as we subject our IVT™ to increasingly demanding tests. I can assure you that commercializing our IVT™ remains a high priority.

Further details will be shared with you at our upcoming Annual Shareholders’ Meeting on January 27, 2005.

Sincerely,

Richard Ottalagana, CEO