January 8, 2010

Update: SMS Camaro Press Release Link

We are very pleased to report that we have sent General Motors an IsoTorque® differential specifically designed for GM’s Cadillac CTS. GM intends to evaluate the IsoTorque not only in the CTS but for potential use in a completely new model under development.

You will recall we sent an IsoTorque to the GM High Performance Division and that this division completed a positive, but basic evaluation in October of 2008 before GM entered bankruptcy and the division shut down with its engineers reassigned. This was both an obstacle and a benefit for Torvec. While we lost time, many of the engineers who had first hand knowledge of the result of the division’s evaluation are now involved with many different platforms (car models are built on specific platforms, i.e. CTS = Sigma platform) and models across GM’s vehicle portfolio.

As a result, the engineers with whom we had previously worked will now be involved in the evaluation of the IsoTorque for the CTS. In addition, these same engineers are responsible for designing new models from the ground up as well as keeping current models fresh by the addition of new options. The titles of these individuals are impressive - titles include Lead Development Engineer, Advanced Vehicle Dynamics and Multi-Platform Driveline Integration. Andrew Gleasman had the pleasure of interacting with many of these individuals at the Bob Lutz CTS-V Challenge that was discussed in our November 6th update.

We are very confident that GM will have results similar to those that John Heinricy (Former Director of GM High Performance retired October 2008) experienced this fall at the New Jersey Motor Sports Park with the IsoTorque equipped Corvette. We would like to share with you at this time John Heinricy’s engineering report provided to Torvec and shared with people at GM as well as other OEMs. The report consists of a narrative of the results and the data collected in graphic form. Although GM has received this report, GM has informed us that it intends to conduct more extensive trials, such as winter handling/traction, slalom, emergency lane change, and skid pad G’s.

Based on our experience in racing and our own internal knowledge with our Nissan 350Z, we feel confident the IsoTorque will out perform technology currently in use by GM.

GM has indicated its evaluation will be conducted shortly. Torvec representatives will be in attendance. Once we have more information, we will pass it along to you.

Although the task of specifically designing our IsoTorque for the Cadillac CTS took many months, we now anticipate we will move forward with GM more rapidly now that our engineers and GM’s engineers are working together.

Lastly, our 2009 annual meeting of shareholders will be held at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450 on Thursday, January 28, 2010. The annual meeting will begin promptly at 7:00 p.m., Eastern Standard Time.

Click here for a map

Information on how to access the proxy documents online was mailed December 14, 2009, but also can be found here at the SEC website.

Please read this information as well as the proxy statement online, so that you will know what we plan to do at the meeting. Also if you have not voted online, please sign your Proxy Card and return it in accordance with the instructions accompanying the Card. This way, your shares will be voted as you direct even if you can not attend the meeting.

We look forward to seeing you all there.

Sincerely,

Torvec Inc.