November 10, 2004

I would like to update all of you on significant activity at Torvec.

Infinitely Variable Transmission (IVT™)

In my last update on October 26th, I mentioned that we have completed the full array of our EPA baseline tests of the GM Tahoe and that the installation of our infinitely variable transmission (IVT™), including our custom electronic engine control unit (ECU), was progressing on schedule.

I am very pleased to inform you that our IVT™ has now been installed in the GM Tahoe. Prior to installation, we performed a wide variety of final “bench tests” to ensure that our internal sensors (which measure heat, pressure and various other aspects of performance) were operating effectively. We also performed some verification tests of our IVT™ at extremely low psi and rpm and are very pleased with the results. Furthermore, our ECU has now been completed and is in the process of being installed and fine-tuned. Both the IVT™ and ECU “fit like a glove.”

I want to take this opportunity to provide you with further details regarding our strategic decision to design and develop our own custom ECU. The ECU is a critical component that regulates engine speed and horsepower to ensure that the IVT™ and engine continuously work together at optimum levels. In today’s autos, the engine controls the transmission; however, with our IVT™ and ECU the transmission directs the engine, thereby maximizing fuel efficiency across a wide variety of driving conditions.

From our experience in testing the Dodge Ram, we recognized that we would have to develop our own ECU. Our experience revealed that our opportunities could be significantly limited by relying on an OEM to develop our control unit. For example, patent opportunities can be developed with the design of the ECU. Therefore, we could be placed in a position of sharing a patent with an OEM covering a critical function. This could limit our options and hamper our ability to maximize shareholder value. Developing our own ECU caused some delay, however the extra time has allowed us to fine tune our IVT™ and ECU and to strengthen our overall patent protection. We are confident that our shareholders support these decisions. We will continue to take all necessary actions to ensure that the IVT™ achieves the best results while we put in place the strongest possible patent protection.

Iso-Torque™ Differential

We are intensifying our efforts to commercialize our Iso-Torque™ technology. To this end we have formed and funded a wholly owned subsidiary, Iso-Torque Corporation. We have transferred our Iso-Torque™ technology, know-how and patents to this subsidiary. Keith Gleasman and I will be spearheading the marketing and commercializing efforts as Co-Managing Directors of Iso-Torque™ Corporation.

We have started the tooling design and differential development for a specific automotive model at the request of an OEM. The result will be a production-ready unit. Fifty years of experience with the Torsen® differential gives us the liberty to skip the usual prototype process. In the early 1980s the Gleasmans designed the Humvee/Hummer differential units which passed the military’s 20,000-mile durability run and are still in use twenty years later. This was accomplished without the benefit of modern cad-cam and finite element ability that we have today. Torvec is excited because upon completion of the production model, the same gear set will fit in a large variety of domestic and foreign vehicles, including the Humvee.

With our technological advantages relating to cost, weight, performance and safety, along with interest expressed by OEMs, we envision a very bright future for Iso-Torque Corporation. This is accentuated by the fact that in August 2003, Zexel sold all of its rights to the Torsen® differential (Iso-Torque’s predecessor developed by the Gleasman family) to Toyoda (parent company of Toyota) for over $100 million, even after all patent protection for the Torsen® had expired.

Legal Proceedings with ZT Technologies

On October 26th, Torvec commenced an action in the US District Court of NY against ZT Technologies, Inc., an Indiana based corporation. The suit petitions the Court to declare a July 21, 2004 agreement between the two parties to be ineffective and unenforceable.

The purpose of the July 21st agreement was to manufacture, market, sell and distribute our Full Terrain Vehicle (FTV™) and accessories (i.e., trailers, personnel carriers and other ancillary equipment) to government agencies in North America including agencies of Canada, the US Government, various states, all political subdivisions thereof, and all territories of the US for emergency, forestry, homeland security and other uses.

To protect our shareholders, the agreement explicitly provided that it would become effective (i.e., a legally binding contract) only upon our receipt from ZT Technologies of at least five purchase orders for the FTV, together with the full amount of the purchase price for the vehicles ordered. To date, ZT Technologies has not provided us with any purchase orders and in fact, was making demands to us to provide them with design and engineering specifications for the FTV™. Given these circumstances, we believed that the most prudent course of action was to seek a federal court order that the July 21st agreement is unenforceable by its terms.

The bringing of this suit is a sound business decision designed to ensure that the July 21st agreement does not inhibit our ability to conduct negotiations with other potential joint venture partners for the production, sale and distribution of the FTV™ outside of North America.

I can assure you that Torvec has many suitors for the FTV™. However, what has prevented a deal from closing has been the precarious financial health of the light truck industry. This industry includes some of these suitors, who nevertheless remain extremely interested in the commercialization of the FTV™. We anticipate that steadily improving financial conditions in the light truck industry will aid us in consummating one or more transactions commercializing the FTV™ during calendar 2005.

Continuation of Torvec Technology/Gleasman Family Expertise

From time to time, I receive questions regarding the future ability of the Gleasman family to deliver innovative technologies to Torvec’s portfolio. I can assure you that after almost fifty years of tutoring by Vernon Gleasman, James and Keith Gleasman have been, and will continue to be, responsible for developing technology that continues to push Torvec’s portfolio to the forefront of the automotive industry. This is evidenced by patents in both their names which recently have been granted by the US Patent Office. Torvec is very fortunate to be in this position.

-----

The oil crisis, reduced vehicle sales and related economic turmoil have moved our technology-laden portfolio to the forefront as viable solutions. I will continue to keep you informed of our progress during these opportunistic times.

Sincerely,

Richard Ottalagana, CEO