May 9, 2006

As most of you are aware, Torvec now has production ready prototypes of its Infinitely Variable Transmission (IVT) that will revolutionize the efficiencies of all types of engines and its Iso-Torque differentials that will significantly enhance vehicle safety. We are moving across a diverse number of fronts to enter into revenue-producing business relationships with domestic and international governmental and private sector entities for these products, as well as for the rest of our products, such as the Full Terrain Vehicle (FTV) and the constant velocity joint.

We wish to share with you one, major proposal or plan of action which was presented at a meeting held on May 5, 2006 at our testing facilities with Senator Joseph Robach, his chief of staff, Kirk Morris, Jack Kinnicutt (Director, Finger Lakes Regional Office of the New York Empire State Development Corporation), Kevin Hurley (Economic Development Program Administrator for the Finger Lakes Regional Office of the New York State Department of Economic Development), Judy Seil (Economic Development Manager for the Monroe County Department of Planning and Development), James Senall (Managing Director, Business Development of the Greater Rochester Business Enterprise) and Mark Peterson (Managing Director, Investor Relations for the Greater Rochester Enterprise).

After the meeting, representatives of Greater Rochester Enterprise agreed to take the lead in arranging for the capital necessary to fund the initial installation of the demonstration models called for under the proposal.

One motive for the visit was obviously “economic development” in the classic sense: generation of revenues for the greater Rochester economy and job creation. However, the driving force behind our visitors’ interest is the desperate need for the government and private industry to find a dramatic, long term fix to the oil crisis now .

It is becoming more and more obvious that a) our nation has a fuel crisis; b) solutions other than Torvec’s transmission (e.g. major ethanol production, affordable, practical fuel-cells, cost-effective electric hybrids and the like) are years away and, what’s worse, may not solve the problem and c) Torvec’s IVT has the potential to solve the crisis now at significantly less cost than any other known “solution.” Moreover, all of these “solutions” but the fuel-cell still need a transmission.

As we have told you before, most of our discussions take place under conditions of strict confidentiality. We are delighted to be able to share this plan of action with you in its entirety since the fact of the proposal and its contents are not subject to any confidentiality stipulations at this stage. Also, we recognize that this CEO Update may be rather long but we urge you to take the time to read it ---- we think you will find it fascinating.

Click Here For Torvec Proposal

Sincerely,

James Gleasman
CEO