United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.    )

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Filed by a Party other than the Registrant [  ]

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[  ]  Soliciting Material Pursuant to ? 240.14a-11(c) or ? 240.14a-12

                TORVEC, INC.                
(Name of Registrant as Specified in Its Charter)

         Keith E. Gleasman, President         
(Name of Person(s) Filing Proxy Statement)

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Torvec, Inc.
11 Pond View Drive
Pittsford, New York 14534

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 24, 2002

On Thursday, January 24, 2002, Torvec, Inc. will hold its annual meeting of shareholders for 2001 at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450. The meeting will begin at 7:00 P.M. local time.

Only shareholders of record at the close of business on December 10, 2001 can vote at this meeting or any adjournment that may take place. At the meeting, we will:

You can find more information about each of these items, including the nominees for directors, in the attached Proxy Statement.

Our Board of Directors recommends that you vote in favor of each of the proposals outlined in the Proxy Statement.

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We cordially invite all shareholders to attend the annual meeting in person. However, whether or not you expect to attend the annual meeting in person, please mark, date, sign and return the enclosed Proxy Card as promptly as possible in the postage-prepaid envelope provided to ensure your representation and the presence of a quorum at the annual meeting. If you send in your Proxy Card and then decide to attend the annual meeting to vote your shares in person, you may still do so. Your proxy is revocable in accordance with the procedures set forth in the Proxy Statement.

Following the business portion of the meeting, we will also report on our business results and other matters of interest to shareholders.

	By order of the Board of Directors
DATED:  December 14, 2001	/s/ MORTON A. POLSTER                Morton A. Polster, Secretary

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Torvec, Inc.
11 Pond View Drive
Pittsford, New York 14534

PROXY STATEMENT

Date of Proxy Statement: December 10, 2001
Date of Mailing: December 14, 2001
Annual Meeting of Shareholders: January 24, 2002

The 2001 annual meeting of shareholders, originally scheduled to be held on Thursday, October 11, 2001, was adjourned, without any business being conducted, and the Board of Directors has set Thursday, January 24, 2002 as the date for the annual shareholders' meeting.

Our Board of Directors is soliciting proxies for the 2001 annual meeting of shareholders. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully.

In compliance with the company's existing bylaws, the Board has fixed December 10, 2001 as the record date for the 2001 annual meeting. Shareholders of record who owned our common stock on that date are entitled to vote at and attend the annual meeting, with each share entitled to one vote. 23,095,038 shares of our $.01 par value common stock were outstanding on the record date.

Voting materials, which include this Proxy Statement, a Proxy Card and the 2000 Annual Report, will be mailed to shareholders on or about December 14, 2001.

We have summarized below important information with respect to the 2001 annual meeting.

Time and Place of the Annual Meeting

The 2001 annual meeting is being held on Thursday, January 24, 2002 at 7:00 P.M. local time at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450. All shareholders who own shares of our $.01 par value common stock as of December 10, 2001, the record date, may attend and vote at the 2001 annual meeting.

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Purpose of the Proxy Statement and Proxy Card

You are receiving a Proxy Statement and Proxy Card from us because you own shares of our common stock on December 10, 2001, the record date. This Proxy Statement describes issues on which we would like you, as a shareholder, to vote. It also gives you information on these issues so that you can make an informed decision.

When you sign the Proxy Card, you appoint each of Michael Martindale and Keith E. Gleasman as your representatives at the meeting. Michael Martindale and Keith E. Gleasman will vote your shares at the meeting as you have instructed them on the Proxy Card. This way, your shares will be voted whether or not you attend the annual meeting. Even if you plan to attend the meeting, it is a good idea to complete, sign and return your Proxy Card in advance of the meeting just in case your plans change.

Proposals to be Voted on at This Year's Annual Meeting

You are being asked to vote on:

The Board of Directors recommends a vote FOR each proposal.

Voting Procedure

You may vote by mail.

To vote by mail, please sign your Proxy Card and return it in the enclosed, prepaid and addressed envelope. If you mark your voting instructions on the Proxy Card, your shares will be voted as you instruct.

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You may vote in person at the annual meeting.

We will pass out written ballots to anyone who wants to vote at the meeting. If you hold your shares in street name, you must request a Proxy Card from your stockbroker in order to vote at the meeting. Holding shares in "street name" means your shares of stock are held in an account by your stockbroker, bank or other nominee, and the stock certificates and record ownership are not in your name. If your shares are held in "street name" and you wish to attend the annual meeting, you must notify your broker, bank or other nominee and obtain the proper documentation to vote your shares at the annual meeting.

You may change your mind after you have returned your Proxy Card.

If you change your mind after you return your Proxy Card, you may revoke your proxy at any time before the polls close at the annual meeting. You may do this by:

Multiple Proxy Cards

If you receive more than one Proxy Card, it means that you hold shares in more than one account. Please sign and return all Proxy Cards to ensure that all your shares are voted.

Quorum Requirement

Shares are counted as present at the annual meeting if the shareholder either:

33 1/3% of our outstanding shares as of the record date must be present at the annual meeting (either in person or by proxy) in order to hold the annual meeting and conduct business. This is called a "quorum".

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Consequences of Not Returning Your Proxy Card; Broker Non-Votes

If your shares are held in your name, you must either return your Proxy Card or attend the annual meeting in person in order to vote on the proposals. If your shares are held in street name and you do not vote your proxy yourself, your brokerage firm may either:

Under the rules that govern brokers who have record ownership of shares that are held in "street name" for their clients, brokers may vote such shares on behalf of their clients with respect to "routine" matters (such as the election of directors or the ratification of auditors), but not with respect to non-routine matters (such as a proposal submitted by a shareholder). If the proposals to be acted upon at any meeting include both routine and non-routine matters, the broker may turn in a Proxy Card for uninstructed shares that vote for routine matters, but expressly states that the broker is not voting on non-routine matters. This is called a "broker non-vote".

Broker non-votes will be counted for the purpose determining the presence or absence of a quorum but will not be counted for the purpose of determining the number of votes cast.

We encourage you to provide instructions to your brokerage firm by voting your proxy. This ensures that your shares will be voted at the meeting.

Effect of Abstentions

Abstentions are counted as shares that are present and entitled to vote for the purposes of determining the presence of a quorum but are not counted as votes cast for purposes of determining the approval of any matters submitted to the shareholders for a vote.

Required Vote

Assuming a quorum is present at the annual meeting, the election of each nominee to be a director of the company will require a plurality of shares present in person or represented by proxy. The ratification of the independent auditors, the proposal to increase shares under the Business Consultants Stock Plan and the proposals to approve amendments to our bylaws will require the affirmative vote of a majority of shares present in person or represented by proxy.

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Vote Solicitation

The Board of Directors of Torvec, Inc. is soliciting your proxy to vote your shares at the annual meeting. In addition to this solicitation by mail, our directors, officers and any other employees of the company may contact you by telephone, internet, in person or otherwise to obtain your proxy. These persons will not receive any additional compensation for assisting in the solicitation. We will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners. We will reimburse these entities and our transfer agent for their reasonable out-of-pocket expenses in forwarding proxy material. We have not retained the services of a proxy solicitor.

Voting

Votes cast by proxy or in person at the annual meeting will be tabulated by Board appointed inspectors of election. The inspectors of election will also determine whether there is a quorum at the annual meeting.

The shares represented by Proxy Cards received, properly marked, dated, signed and not revoked, will be voted at the annual meeting. If the Proxy Card specifies a choice with respect to any matter to be acted on, the shares will be voted in accordance with that specified choice. Broker non-votes will not be considered as voting with respect to any matter for which the broker does not have voting authority.

With respect to the election of directors, ANY VALID PROXY RECEIVED WHICH IS EXECUTED BY THE SHAREHOLDER IN SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ALL NOMINEES OR ANY INDIVIDUAL NOMINEE SHALL BE DEEMED TO GRANT AUTHORITY TO VOTE FOR ALL NOMINEES.

Where specified choices ( including abstentions) with respect to any given proposal are not indicated, THE SHARES REPRESENTED BY ALL VALID PROXIES RECEIVED WILL BE VOTED FOR APPROVAL OF THAT PROPOSAL.

We believe that the procedures to be used by the inspectors of election to count the votes are consistent with New York law and our Bylaws concerning the determination of a quorum and the voting of shares.

Publication of Voting Results

We will announce preliminary voting results at the meeting. We will publish the final results in our annual report on Form 10-KSB for the fiscal year ending December 31, 2001, which we will file with the Securities and Exchange Commission. You can get a copy by writing Torvec, Inc., 11 Pond View Drive, Pittsford, New York 14534, or by contacting the Securities and Exchange Commission at (800) 732-0330 for the location of its nearest public reference room, or through the Edgar System at www.sec.gov.

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Other Business

We do not know of any business to be considered at the 2001 annual meeting other than the proposals described in this Proxy Statement. However, if any other business is properly presented at the annual meeting, your signed Proxy Card gives authority to Michael Martindale and Keith E. Gleasman to vote on such matters at their discretion.

Proposals for 2002 Annual Meeting

Shareholders may present matters for consideration at our next annual meeting either by having the matter included in the company's own Proxy Statement and listed on its Proxy Card or by conducting his or her own proxy solicitation.

To have your proposal included in our Proxy Statement and listed on our Proxy Card for the 2002 annual meeting, you must submit your proposal to the company before April 27, 2002 in writing to Morton A. Polster, Esq., Secretary, Torvec, Inc., 56 Windsor Street, Rochester, New York 14605. You may submit a proposal only if you have continuously owned at least $2,000 worth or 1% in market value of the company's common stock for at least 1 year before you submit your proposal to the company, and you must continue to hold this level of security ownership in our company through the annual meeting of shareholders to be held in 2002.

If you decide to conduct you own proxy solicitation, you must provide the company with written notice of your intent to present your proposal at the 2002 annual meeting, and the written notice must be received by the company before July 14, 2002. If you submit a proposal for the 2002 annual meeting after July 14, 2002, management may or may not in its sole discretion, present the proposal at the annual meeting, and the proxies for the 2002 annual meeting will confer discretion on management proxy holders to vote against your proposal.

Annual Report on Form 10-KSB/A

Accompanying this Proxy Statement is a copy of our amended annual report (Form 10-KSB/A) for the fiscal year ending December 31, 2000 as filed with Securities and Exchange Commission on November 7, 2001.

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PROPOSAL 1
ELECTION OF DIRECTORS

Under our Bylaws, our Board of Directors is elected annually to serve until the next annual meeting of shareholders and until the directors' successors are duly elected and shall qualify. Unless authority to vote for the election of directors is withheld or the Proxy Card is marked to the contrary, valid proxies received will be voted FOR the election of the six nominees named below. All of the nominees are currently directors of the company. Herbert H. Dobbs, Keith E. Gleasman, James A. Gleasman and Morton A. Polster were elected at the annual meeting of shareholders in 2000. Michael Martindale and Jacob H. Brooks were elected directors on August 1, 2001. While management has no reason to believe that any nominee will not be available as a candidate, should such a situation arise, the proxy may be voted for the election of other persons as directors.

The names of the nominees, their ages as of December 10, 2001, and certain other information about them are set forth below.

Nominee(1)	Principal Occupation	Age	Served As Director Since
Herbert H. Dobbs 448 West Maryknoll Road Rochester Hills, MI 48309 (2) Keith E. Gleasman 11 Pond View Drive Pittsford, NY 14534 (3) Michael Martindale 11 Pond View Drive Pittsford, NY 14534 (4) Jacob H. Brooks 11 Pond View Drive Pittsford, NY 14534 (5)	Chairman of the Board of Directors President, Torvec, Inc.; Director Chief Executive Officer, Torvec, Inc.; Director Chief Operating Officer, Torvec, Inc; Director	70 54 57 59	02/20/98 09/26/96 08/1/01 08/1/01

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Nominee	Principal Occupation	Age	Served As Director Since
Morton A. Polster c/o Eugene Stephens & Associates 56 Windsor Street Rochester, NY 14605 (6) James A. Gleasman 11 Pond View Drive Pittsford, NY 14534 (7)	Secretary, Torvec, Inc.; Director Consultant, Torvec, Inc.; Director	74 61	09/27/96 02/20/98

(1)	Lee E. Sawyer has tendered his resignation from the Board, effective January 31, 2002 and is not standing for re-election. Mr. Sawyer, a founding director of the company, has recently retired from Kia Motors America and wishes to devote more time to his family.
(2)	Dr. Dobbs has worked at every engineering level from design engineer to technical director of an Army Major Commodity Command at the two-star level. He has worked as a hands-on engineer and scientist in industry and government, commanded field units, managed Army R & D programs and laboratories and currently has his own practice as a consultant engineer. Dr. Dobbs holds a Ph.D. in Mechanical Engineering from the University of Michigan and is a registered professional engineer in Michigan. He holds several patents of his own and, among many affiliations, is a member of SAE, ASME, NSPE, AAAS, Sigma XI, AUSA, NDIA and the U.S. Army Science Board. The last named organization is a small group of senior technical and managerial people chosen from industry and academia to provide direct advice to the Secretary of the Army, the Chief of Staff, and the Department of the Army concerning issues of policy, budgets, doctrine, organization, training and technology. The company's annual report contains further information concerning Dr. Dobbs' background.
(3)	Co-Inventor with Vernon E. Gleasman on all Torvec patents, Mr. Gleasman's strengths include his extensive marketing and sales executive experience, in addition to his design and development knowledge. His particular expertise has been in the area of defining and demonstrating the products to persons within all levels of the automotive industry, educators and students. Mr. Gleasman has extensive technical and practical experience covering all aspects of the company's operations such as, promotion, engineering and manufacturing. The company's annual report contains further information concerning Mr. Gleasman's background. 10

(4)	Mr. Martindale is a seasoned executive, with an exceptional background in bringing new products to market and growing organizations. His track record includes helping bridge technology gaps across industries, including in particular automotive and electronic equipment, by applying best practices industry to industry. He has executive and managerial experience, with profit and loss and large budget responsibility, with particular strengths in nurturing and bringing new ideas to market.
	During 2000-2001, Mr. Martindale was Chief Operating Officer of GenuOne, an innovative company in the brand protection industry, aimed at assisting companies to protect their products from counterfeiting, gray market diversion and violation of their intellectual property. Mr. Martindale managed the day-to-day operations of GenuOne and was responsible for sales, implementation support for GenuOne's technology and the management of technology partners in Israel and the U.S.
	From 1998 to 2000, Mr. Martindale was Senior Vice President of Nextera Enterprises where he headed a team of operations professionals focused on supply chain management. The area focused on the total supply chain from raw materials to customer service, and included work for many of the primary suppliers to Detroit. The scope of his projects for client executives ranged from the development of operations strategy, to implementation of complex control systems needed to manage their companies.
	From 1991 to 1998, Mr. Martindale was chief executive officer of SIGMA Consulting. Mr. Martindale was the co-founder and president of SIGMA Consulting prior to its acquisition in 1998 by Nextera. His duties at SIGMA included the general management of the company, and as the majority owner he had the responsibility of growing the company from nothing to $18M in 1998. In his role as leader of the firm, his focus was to deliver high quality management consulting to companies in the automotive, electronic and aerospace industries. The work included major projects at tier 1 automotive suppliers in the area of product/process development, including direct interface with "big 3" platform teams. Other projects included the development of manufacturing for a major supplier to the heavy equipment market, including the design, justification and implementation of new technologies which allowed this company to grow five fold in a two year period. He led the team that designed and managed the implementation of a new plant for a manufacturer of air-bag material.
	Mr. Martindale has BSEE and MSEE degrees from Swindon Technical College and MS Computer Engineering from Cheltenham Technical College in the United Kingdom. His MBA is from the University of Rochester, N.Y. 11

(5)	Mr. Brooks has over 30 years of industry and consulting experience, focused primarily in the manufacturing, and secondarily in the services sectors. He has spent the last 20+ years as a management consultant advising major corporations on their strategies and business process needs.
	He has experience as a partner with the top tier management consulting firms of Booz, Allen and Hamilton and KPMG. More recently, Mr. Brooks worked for SIGMA Consulting until its acquisition by Nextera Enterprises. Prior to his consulting work, Mr. Brooks worked for Colgate Palmolive and Phillips Petroleum Company as a practicing engineer and manufacturing manager, and served as an officer in the US Air Force.
	Mr. Brooks has developed strategies and supported major business process redesign initiatives for companies in several business process areas including the supply chain, product development, and planning/performance measurement/decision support. In the course of his career, he has:
	o	worked in industry for Colgate-Palmolive as an industrial engineer, manufacturing engineer and plant manager and worked on special assignments for the CEO to do product line analysis and manufacturing strategy work. He also worked as a research engineer in the Plastics Division of Phillips Petroleum.
	o	later led Booz, Allen's high tech practice in their Southwestern Region and was National Director for Manufacturing with KPMG. At Nextera he was the COO of Nextera Interactive, the company's technology consulting arm consisting of the combination of 5 different acquisitions.
	Mr. Brooks received his MBA from Harvard Business School and BSIE degree from Oklahoma University. He has been a frequent speaker and participant in a variety of industry forums and executive education programs. 12

(6)

Mr. Polster is a partner in the intellectual property law firm of Eugene Stephens & Associates. Formerly, he was General Patent Counsel and, thereafter, Secretary and Corporate Counsel for Gleason Corporation (1969 - 1989) and prior to that, Patent Counsel for Eastman Kodak Corporation (1960 -1969). While with Gleason Corporation, Mr. Polster represented Gleason when the latter purchased the Gleasman's Triple D, Inc., and exclusive rights to the Gleasman patents relating to the design and manufacture of the Torsen differential. He was part of the management team overseeing the operation of the Gleason Power Systems Division, which was created to manufacture and sell the Torsen differential. Also, he represented Gleason when the latter sold its Power Systems Division and its rights to the Torsen Differential to Diesel Kiki, Ltd. of Japan (now Zexel Corporation). While in private practice, since 1989, Mr. Polster represented Zexel Torsen, Inc., (subsidiary of Zexel Corp.), which was created to manage the manufacture and sale of Torsen differentials. Mr. Polster has been patent counsel to the Gleasmans since 1989 and patent counsel to the company from its inception. He is in charge of the preparation and execution of the company's U.S. and international patent protection. The company's annual report contains further information concerning Mr. Polster's background.

(7)

Mr. Gleasman is a life-long entrepreneur who is co-inventor of the Gleasman GSD-10 steer drive. He was a joint-venture partner with Clayton Brokerage Co. of St. Louis, MO, and established manufacturing of the Torsen® Differential in Argentina, Brazil, and other countries. The company's annual report contains further information concerning Mr. Gleasman's background.

Relationships; Agreements

Keith E. and James A. Gleasman are brothers. There are no other family relationships among any of the directors or executive officers of the company. There are no agreements or arrangements for the nomination or the appointment of any persons to the Board of Directors.

Meetings and Committees of the Board of Directors

The Board of Directors of the company met five times during the fiscal year from January 1, 2000 through December 31, 2000. For the 2000 fiscal year, each incumbent director attended, either in person or by telephonic conference as permitted by the company's Bylaws, 100% of the total number of meetings held during the period for which he was a director and 100% of the total number of meetings of the committees of the Board on which he served during the period for which he was a member of such committee(s). The Board has an Audit Committee. The Board does not have a standing Compensation Committee or a standing Nominating Committee, the Board acting as a committee of the whole serving as the Compensation and Nominating Committees.

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The Audit Committee of the Board of Directors met two times in fiscal year 2000. During fiscal year 2000, the Audit Committee was composed of three directors, namely Herbert H. Dobbs, Lee E. Sawyer and Morton A. Polster.

The company's Board of Directors has adopted an Audit Committee Charter delineating the composition and the responsibilities of the Audit Committee. The Charter became effective on April 17, 2000 and is attached as Appendix A to this Proxy Statement.

The functions of the Audit Committee are to recommend the engagement of the independent auditors to the Board of Directors, to assess all relationships between the company and the independent auditors to determine their impact upon auditor independence, to monitor the effectiveness of the audit effort, and to monitor our financial and accounting organization and our system of internal accounting controls.

All members of the Audit Committee are "independent" as independence is defined in Rule 4200(a)(14) of the National Association of Securities Dealers, Inc. listing standards.

Director Compensation

Directors of the company who are not officers of the company may be compensated for attendance at meetings and for other agreed upon consulting services rendered to the company. During fiscal 2000, Keith E. Gleasman and James A. Gleasman were compensated in accordance with their consulting agreements, as more fully described on pages 25 and 26 of this Proxy Statement.

Directors who are officers receive no additional compensation for serving on the Board of Directors.

Directors who are executive officers, key employees, advisors or consultants to the company are eligible to participate in the 1998 Stock Option Plan. No options were granted to any eligible director under the plan during fiscal 2000. The 1998 Stock Option Plan is discussed beginning on page 32 of this Proxy Statement.

Each nominee must be elected by the affirmative vote of a plurality of the shares of common stock of the company present in person or by proxy and entitled to vote at the annual meeting.

Recommendation of the Board:

THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF ALL NOMINEES NAMED ABOVE



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PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Audit Committee has recommended, and the Board has approved, the appointment of Richard A. Eisner & Company, LLP as our independent auditors for our fiscal year ended December 31, 2001.

A representative of Richard A. Eisner & Company, LLP is expected to be present at the annual meeting. This representative will have an opportunity to make a statement and will be available to respond to appropriate questions.

Audit Fees

The company was billed an aggregate $47,200 for professional services rendered by Richard A. Eisner & Company, LLP for the audit of the company's annual financial statements for the fiscal year ended December 31, 2000 (including $12,500 for the audit of Ice Surface Development, Inc.) and for the review of the company's financial statements included in the company's quarterly reports (Form 10-QSB) filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2000.

Financial Information Systems Design and Implementation Fees

The company was not billed for any professional services rendered by Richard A. Eisner & Company, LLP regarding the design of the company's financial information systems or the implementation thereof for the fiscal year ended December 31, 2000.

All Other Fees

The company was billed $29,900 for non-audit professional services rendered by Richard A. Eisner & Company, LLP for the fiscal year ended December 31, 2000.

The Audit Committee has considered whether the provision of non-audit services by Richard A. Eisner & Company, LLP during the fiscal year ended December 31, 2000 is compatible with maintaining Richard A. Eisner & Company, LLP's independence.

This proposal requires the affirmative vote of a majority of the shares of common stock of the company present in person or by proxy and entitled to vote at the annual meeting.

Recommendation of the Board:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2

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PROPOSAL 3

APPROVAL OF ADDITIONAL SHARES UNDER
OUR BUSINESS CONSULTANTS STOCK PLAN

On June 2, 1999, the company created a Business Consultants Stock Plan and reserved 200,000 shares of the company's $.01 par value common stock to be issued from time to time to business consultants and advisors who provide bona fide services to the company, provided that such services are not in connection with the offer or sale of securities of the company in a capital raising transaction and do not directly or indirectly promote or maintain a market for the company's securities. Such services include ongoing legal and internal accounting fees, ongoing litigation expenses, patent expenses and promotional expenses.

The company registered the 200,000 shares reserved for issuance under the Business Consultants Stock Plan under the Securities Act of 1933, and the Registration Statement became effective on June 11, 1999. By virtue of such registration, business consultants, who are not affiliates of the company, may immediately sell such shares in open market transactions without securities law restrictions.

On September 12, 2000, the Board of Directors authorized a 200,000 share increase in the number of shares issuable under the Plan. The company filed Form S-8, Registration Statement with the Securities and Exchange Commission which became effective on October 5, 2000 to register the additional 200,000 shares.

On October 11, 2001, the Board of Directors authorized a 200,000 share increase in the number of shares issuable under the Plan. The company filed Form S-8 Registration Statement with the Securities and Exchange Commission which became effective on November 7, 2001 to register the additional 200,000 shares.

For the fiscal year ending December 31, 1999, the company issued 45,351 shares of common stock under the Business Consultants Stock Plan.

For the fiscal year ending December 31, 2000, the company issued 196,259 shares of common stock under the Business Consultants Stock Plan.

In fiscal year 2001 through December 10, 2001, the company has issued 318,847 shares under the Business Consultants Stock Plan.

As of December 10, 2001, there remain 39,543 common shares available to be issued for services rendered under the Plan. Management believes that the Plan has allowed the company to engage unrelated service providers to provide necessary services to the company, especially during periods of limited cash flows. The issuance of shares under the plan has strengthened the company's balance sheet by reducing, and in some cases eliminating, current liabilities. Our independent auditors have referred to the availability of shares under the plan as one of the grounds for rendering an unqualified opinion on our December 31, 2000 audited financial statements.

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Management believes that the number of shares issuable under the plan should be increased from 600,000 to 1,500,000 so that the company can continue to obtain professional and similar services it needs until such time as operating revenues will enable the company to pay all vendors in cash.

Approval of this proposal will not result in any dilution of your common share ownership of our company. However, if the proposal is approved, any actual issuance of shares for services will result in dilution to the extent of the additional shares issued.

If the proposal is approved, the company will register the additional shares under the plan with the Securities and Exchange Commission.

This proposal requires the affirmative vote of a majority of the shares of common stock of the company present in person or by proxy and entitled to vote at the annual meeting.

Recommendation of the Board:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3

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PROPOSALS 4, 5 AND 6

APPROVAL OF BYLAW AMENDMENTS

At its meeting held on October 11, 2001, the Board of Directors voted to amend the company's bylaws, subject to shareholder approval, in order to:

o permit special meetings of the shareholders to be called only by a majority vote of the directors;

o provide that directors may be removed only by a vote of the holders of a majority of the company's issued and outstanding shares for cause;

o provide rules to govern the presentation of shareholder proposals at annual meetings of shareholders

Description of Amendments

The bylaw amendments, the text of which is attached to this Proxy Statement as Appendix B, are as follows:

1.	Article II, Section 3 of the company's bylaws currently authorizes either the board, or the president or the holders of a majority of the company's issued and outstanding shares to call a special meeting of shareholders. The first amendment would amend Article II, Section 3 so that special meetings of shareholders could be called only by a majority vote of the board of directors.
2.	Article III, Section 5 of the company's bylaws currently authorizes the board or the shareholders to remove any director or all of the directors for cause. In addition, directors may be removed without cause only by a vote of the shareholders. The second amendment would amend Article III, Section 5 so that directors could be removed only for cause and only by a vote of the holders of a majority of the company's issued and outstanding shares. Directors could not be removed without cause.
3.	The current bylaws do not address the presentation of shareholders proposals at the annual meeting of shareholders. The third amendment would add two new sections to Article II of the bylaws (Sections 12 and 13), to provide procedures to govern the presentation of any shareholder proposal, including the nomination of any person or persons for election as a director or directors of the company, at the annual meeting of shareholders.

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Shareholder Proposals
	As amended, the bylaws would provide that a shareholder could bring a proposal, including the nomination of any person or persons for election as a director or directors of the company, properly before any annual meeting of shareholders either by:
	o	having the proposal included in the notice of the annual meeting given by or at the direction of the board of directors, included on the company's proxy card and included along with any supporting statement provided by the shareholder in the company's proxy statement for a given annual meeting; or
	o	soliciting the shareholders of the company by means of a notice, proxy statement and form of proxy all prepared by the shareholder making the proposal.
Inclusion in Company's Proxy Materials
	A shareholder who desires to have his proposal, including the nomination of any person or persons for election as a director or directors of the company, included in the company's notice, on its proxy card and in its proxy statement, together with a supporting statement of the shareholder, can only do so if he has continuously owned at least $2,000 worth or 1% in market value of the company's common stock for at least 1 year before he submits his proposal to the company, and he must continue to own this level of security ownership in the company through the annual meeting of shareholders at which his proposal is to be considered.
	The bylaws provide procedures to be followed in order for a shareholder to submit his proposal for inclusion in the company's proxy materials for a given year's annual meeting. There is a deadline for submitting a proposal. You can, in most cases, find the deadline for submitting a proposal and the person to whom it should be submitted for a current year's annual meeting in the previous year's proxy statement. However, if the company did not hold an annual meeting the previous year or has changed the date of its annual meeting for the current year by more than 30 days from the previous year's annual meeting, you will find the deadline in the company's quarterly report filed with the Securities and Exchange Commission on Form 10-QSB at least 120 days prior to the date of the current year's annual meeting.

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	A shareholder desiring to have his proposal included in the company's proxy materials also must comply with rules incorporated in the bylaws by reference to Rules 14a-8 and 9 governing shareholder proposals promulgated by the Securities and Exchange Commission.
Shareholder's Own Solicitation
	A shareholder who desires to present a proposal, including the nomination of any person or persons for election as a director or directors of the company, at an annual meeting of shareholders who fails to meet the requirements for inclusion of the shareholder's proposal in the company's own proxy solicitation materials, may nevertheless conduct his own proxy solicitation. Any shareholder desiring to nominate any person or persons for election as a director or directors of the company and/or bring any matter before an annual meeting shall deliver a written statement that the shareholder intends to deliver a proxy statement and form of proxy to holders of at least a percentage of the company's voting shares required to carry the proposal and/or elect any person or persons as a director or directors.
	The deadline for the delivery of the written statement will be set forth in the proxy statement for the previous year's annual meeting of shareholders. If there was no annual meeting of shareholders in the previous year or if the date of the annual meeting has been changed for more than 30 days from the prior year, then the deadline will be specified in the company's quarterly report on Form 10-QSB filed with the Securities and Exchange Commission at least 120 days prior to the date of the annual meeting.
	If a shareholder desires to nominate any person or persons for election as a director or directors of the company, the written statement shall set forth the name of the person or persons to be nominated, the number and class of all shares of each class of stock of the company owned of record and beneficially by such person, the age, business experience during the previous 5 years as well as certain information with respect to such person involving bankruptcy proceedings, criminal convictions, any orders, judgments or decrees barring or otherwise limiting involvement in any type of business, securities or banking activities or any finding by a court of federal or state securities law violations.

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If a shareholder desires to present a proposal to an annual meeting of shareholders, he must deliver to the company the text of the proposal to be presented and a brief written statement of the reasons why the shareholder favors the proposal and, if applicable, any material interest of the shareholder in the matter proposed other than his interest as a shareholder.

The shareholder shall set forth his name and address, the number and class of all shares of each class of stock of the company owned of record and beneficially by the shareholder and the date or dates when such ownership was acquired.

Reasons for Bylaw Amendments

At its meeting held on October 11, 2001, the board reaffirmed its commitment to oppose any business combination, merger, acquisition or other change in the company's corporate status which would significantly dilute the percentage ownership of the company's shareholders without resulting in a significant increase in the value of their stock ownership in the company. The board adopted the amendments to the bylaws to enhance the directors' authority to effectuate this policy and carry out its purposes. In addition, the board desired to establish specific procedures by which any shareholder of the company, either alone or acting in concert with other shareholders, could properly bring matters before the annual meeting of shareholders. The amended bylaw provisions incorporate the rules and regulations promulgated by the Securities and Exchange Commission governing the presentation of shareholder proposals at annual meetings.

In adopting and recommending the bylaw amendments to the shareholders for approval, the board considered that, in general, anti-takeover bylaw provisions often discourage potential suitors and can lessen a company's stock value.

Effective Date

Each of the bylaw amendments shall become effective only upon approval by the shareholders at the annual meeting of shareholders to be held on January 24, 2002.

Vote

While there are three bylaw amendments, each may be voted upon separately. Each bylaw amendment requires the affirmative vote of a majority of the shares of common stock of the company present in person or by proxy and entitled to vote at the annual meeting.

Recommendation of the Board:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 4, 5 AND 6

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table presents information concerning the beneficial ownership of the shares of our common stock as of December 10, 2001 by:

The number and percentage of shares beneficially owned are based on 23,095,038 shares of common stock outstanding as of December 10, 2001. Beneficial ownership is determined under rules promulgated by the Securities and Exchange Commission. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of December 10, 2001 are deemed to be outstanding and beneficially owned by the person holding the options for the purpose of calculating the number of shares beneficially owned and the percentage ownership of that person, but are not deemed to be outstanding for the purpose of calculating the percentage ownership of any other person. Except as indicated in the footnotes to this table, these persons have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them.

Name and Address of   Beneficial Owner	Number of Shares    Owned	Percent   of Shares      Owned
Vernon E. Gleasman 11 Pond View Drive Pittsford, NY 14534	5,523,161(1)	23.89%

(1) Includes 1,746,666 shares attributable to ownership by Mrs. Margaret Gleasman. Includes 25,000 shares which may be purchased through the exercise of a ten year option granted on December 1, 1997, exercisable at $5.00 per share. In December, 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 2,000,000 shares of the company's common stock from him at an exercise price of $5.00 per share.

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Name and Address of   Beneficial Owner	Position	Number of Shares    Owned	Percent   of Shares      Owned
Herbert H. Dobbs 448 West Maryknoll Road Rochester Hills, MI 48309 Keith E. Gleasman 11 Pond View Drive Pittsford, NY 14534 Michael Martindale 11 Pond View Drive Pittsford, NY 14534 Jacob H. Brooks 11 Pond View Drive Pittsford, NY 14534 Lee E. Sawyer 16 Williamsburg Lane Rolling Hills, CA 90274 Morton A. Polster c/o Eugene Stephens & Associates 56 Windsor Street Rochester, NY 14605 James A. Gleasman 11 Pond View Drive Pittsford, NY 14534 David K. Marshall 11 Pond View Drive Pittsford, NY 14534 Samuel M. Bronsky 6653 Main Street Williamsville, NY 14221 All Executive Officers and Directors as a Group (9 persons)	Chairman of the Board of Directors President, Torvec, Inc.; Director Chief Executive Officer Torvec, Inc.; Director Chief Operating Officer, Torvec, Inc; Director Director Secretary, Torvec, Inc.; Director Consultant, Torvec, Inc.; Director Vice President of Manufacturing, Torvec, Inc. Chief Financial and Accounting Officer 23	442,000(1) 5,404,562(2) 392,261(3) 180,000(4) 465,000(5) 356,407(6) 5,324,760(7) 90,000(8) 119,164(9) (10)	1.91% 23.38% 1.69% Less than 1% 2.01% 1.54% 23.03% Less than 1% Less than 1% 53.02%

(1)	Includes 100,000 shares which may be purchased through the exercise of a ten year option granted on January 1, 1998, exercisable at $5.00 per share. In May, 1998, Dr. Dobbs entered into option agreements pursuant to which related parties have the right to purchase 360,000 shares of the company's common stock from him at an exercise price of $5.00 per share.
(2)	Includes 25,000 shares which may be purchased through the exercise of a ten year option granted on December 1, 1997, exercisable at $5.00 per share. In December, 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 300,000 shares of the company's common stock from him at an exercise price of $5.00 per share.
(3)	Includes 180,000 shares which may be purchased through the exercise of a ten year option granted on August 1, 2001, exercisable at $5.00 per share.
(4)	Includes 180,000 shares which may be purchased through the exercise of a ten year option granted on August 1, 2001, exercisable at $5.00 per share.
(5)	Includes 180,000 shares which may be purchased through the exercise of a ten year option granted on January 1, 1998, exercisable at $5.00 per share. Mr. Sawyer did not stand for re-election to the Board.
(6)	Includes 100,000 shares which may be purchased through the exercise of a ten year option granted on January 1, 1998, exercisable at $5.00 per share.
(7)	Includes 25,000 shares which may be purchased through the exercise of a ten year option granted on December 1, 1997, exercisable at $5.00 per share. In November, December 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 364,000 shares of the company's common stock from him at an exercise price of $5.00 per share.
(8)	Includes 90,000 shares which may be purchased through exercise of a ten year option granted on September 1, 2001, exercisable at $5.00 per share.
(9)	Includes 100,000 shares which may be purchased through exercise of a ten year option granted on August 28, 2001, exercisable at $5.00 per share.
(10)	Includes an aggregate 1,003,213 shares which may be purchased through the exercise of ten year options all of which are exercisable at $5.00 per share. 24

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, our executive officers and persons who own more than 10% of our common stock to file initial reports of ownership (Form 3) and reports of changes in ownership of our common stock (Forms 4 and 5) with the Securities and Exchange Commission. These persons are required by SEC regulations to furnish us with copies of all section 16(a) reports they file. To our knowledge, based solely on our review of the copies of such reports received or written representations from such persons that no reports were required, we believe that during our fiscal year ended December 31, 2000 all such persons complied with all applicable filing requirements.

EXECUTIVE COMPENSATION

The following table shows the compensation earned by our president, each of the four other most highly compensated individuals who served as an executive officer for the fiscal year ended December 31, 2000 and the compensation received by each of these people for the two preceding years.

SUMMARY COMPENSATION TABLE
Annual Compensation

(a) Name and Principal Position	(b) Year	(c) Salary	(d)(1)(2)(3)(4) Consultants Fee	(e)Other Annual   Compensation
Keith E. Gleasman President	2000 1999 1998	$  -   $  -   $  -	$ 75,000 $ 66,000 $120,000	$  -   $  -   $  -
James E. Gleasman Consultant, Director	2000 1999 1998	$  -   $  -   $  -	$ 60,000 $ 35,000 $117,000	$  -   $  -   $  -
Vernon E. Gleasman Consultant	2000 1999 1998	$  -   $  -   $  -	$ 71,000 $ 60,000 $115,000	$  -   $  -   $  -
Morton A. Polster Secretary, Director	2000 1999 1998	$  -   $  -   $  -	$  -   $  -   $  -	$  -   $  -   $  -
Samuel M. Bronsky Chief Financial and Accounting Officer	2000 1999 1998	$  -   $  -   $  -	$  -   $  -   $  -	$  -   $  -   $  -

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	Long Term Compensation            Awards			Payouts
Name and Principal Position	Year	(f) Restricted Stock Awards	(g)(5) Options SARs (#)	(h) LTIP Payouts	(i)(6)(7) All Other Compensation
Keith E. Gleasman President	2000 1999 1998	- - -	- - -	- - -	- - -
James E. Gleasman Consultant, Director	2000 1999 1998	- - -	- - -	- - -	- - -
Vernon E. Gleasman Consultant	2000 1999 1998	- - -	- - -		- - -
Morton A. Polster Secretary, Director	2000 1999 1998	- - -	- - 100,000	- - -	2,882 5,901 -
Samuel M. Bronsky Chief Financial and Accounting Officer	2000 1999 1998	- - -	- - -	- - -	11,989 - 1,000

Notes:

(1) On December 1, 1997, the company entered into a 3 year consulting agreement with Keith E. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the company in the capacity of President of and consultant to the company. Under the agreement, Mr. Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The company accrued a total of $201,000 under the consulting agreement though December 31, 2000, of which $75,000 was accrued in fiscal 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years.

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(2)	On December 1, 1997, the company entered into a 3 year consulting agreement with James A. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the company as a consultant to the company. Under the agreement, Mr. Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The company accrued a total of $250,000 under the consulting agreement through December 31, 2000, of which $90,000 was accrued in fiscal 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years.
(3)	On December 1, 1997, the company entered into a 3 year consulting agreement with Vernon E. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the company as a consultant to the company. Under the agreement, Mr. Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The company accrued a total of $214,000 under the consulting agreement through December 31, 2000, of which $79,000 was accrued in fiscal year 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years.
(4)	Each of the consulting agreements contain customary covenants prohibiting the consultant from disclosure of confidential information regarding the company, its inventions and its products, and provisions confirming that all inventions conceived, made or developed by the consultant and relating to the business of the company constitutes the sole property of the company. Each of the consulting agreements contains covenants restricting the consultant from engaging in any activities competitive with the business of the company during the terms of such agreements and for a period of two years after termination. Each of the consulting agreements also contain a provision that the benefits provided thereunder continue even if the consultant were to become unable to perform services for the company during its term.
(5)	100,000 stock options were granted to Morton A. Polster on January 1, 1998, exercisable at $5.00 per share for secretarial, legal and patent services rendered to the company.
(6)	Number of shares issued to Mr. Polster under the company's Business Consultants Stock Plan for patent services.
(7)	Number of shares issued to Mr. Bronsky under the company's Business Consultants Stock Plan for internal accounting services.

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Management Reorganization

On August 1, 2001, the company appointed Michael Martindale as Chief Executive Officer and Jacob H. Brooks as Chief Operating Officer of the company. On the same date, the company entered into employment agreements with Mr. Martindale and Mr. Brooks, the salient features of which are as follows:

Michael Martindale

The company has entered into a three year employment agreement with Michael Martindale, effective August 1, 2001 to July 31, 2004, under which he is obligated to devote substantially all of his business and professional time to the company in the capacity of chief executive officer. Under the agreement Mr. Martindale is entitled to receive a base salary of $100,000 during the balance of 2001, $260,000 base salary in 2002, $280,000 base salary in 2003 and $175,000 in base salary until July 31, 2004. Annual bonuses of $60,000 for 2001, $120,000 for 2002, $180,000 for 2003 and $140,000 through July 31, 2004 are to be paid quarterly on the condition that the company achieves agreed-upon business objectives established by the Board of Directors. Mr. Martindale is also entitled to certain employee benefits normally associated with employment, such as vacation, health and disability insurance and was granted an option to purchase 180,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The employment agreement may be terminated by the employee upon ninety day's notice or by the company upon payment of a severance equal to the lesser of twelve month's base salary or the base salary for the balance of the employment agreement's term. The agreement provides that the company, in its discretion, may fulfill its obligations to Mr. Martindale in cash or in stock at such times as the Board of Directors shall determine.

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Jacob H. Brooks

The company has entered into a three year employment agreement with Jacob H. Brooks effective August 1, 2001 to July 31, 2004, under which he is obligated to devote substantially all of his business and professional time to the company in the capacity of chief operating officer. Under the agreement Mr. Brooks is entitled to receive a base salary of $100,000 during the balance of 2001, $260,000 base salary in 2002, $280,000 base salary in 2003 and $175,000 in base salary until July 31, 2004. Annual bonuses of $60,000 for 2001, $120,000 for 2002, $180,000 for 2003 and $140,000 through July 31, 2004 are to be paid quarterly on the condition that the company achieves agreed-upon business objectives established by the Board of Directors. Mr. Brooks is also entitled to certain employee benefits normally associated with employment, such as vacation, health and disability insurance and was granted an option to purchase 180,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The employment agreement may be terminated by the employee upon ninety day's notice or by the company upon payment of a severance equal to the lesser of twelve month's base salary or the base salary for the balance of the employment agreement's term. The agreement provides that the company, in its discretion, may fulfill its obligations to Mr. Brooks in cash or in stock at such times as the Board of Directors shall determine.

Each of the employment agreements contain customary covenants prohibiting the employee from disclosure of confidential information regarding the company, its inventions and its products, and provisions confirming that all inventions conceived, made or developed by the employee and relating to the business of the company constitutes the sole property of the company. Each of the employment agreements contains covenants restricting the employee from engaging in any activities competitive with the business of the company during the terms of such agreements and for a period of two years after termination.

On the same date, the company terminated previously executed employment agreements with Dr. Dobbs, Mr. Sawyer and Mr. Polster which were contingent upon the company's completion of an initial public offering. The stock options granted to Dr. Dobbs, Mr. Sawyer, and Mr. Polster are continued in effect in accordance with their terms.

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David K. Marshall

The company has entered into a three year employment agreement with David K. Marshall effective September 1, 2001 to August 31, 2004, under which he is obligated to devote substantially all of his business and professional time to the company in the capacity of vice president of manufacturing. Under the agreement Mr. Marshall is entitled to receive a base salary of $144,000 for the remainder of 2001, $160,000 base salary in 2002, $190,000 base salary in 2003 and $165,000 in base salary until August 31, 2004. Annual bonuses of $25,000 for 2001, $40,000 for 2002 and $50,000 for 2003 are to be paid quarterly on the condition that the company achieves agreed-upon business objectives established and approved by the chief operating officer of the company. Mr. Marshall is also entitled to certain employee benefits normally associated with employment, such as vacation, health and disability insurance and was granted an option to purchase 90,000 shares of the company's common stock pursuant to the company's 1998 Stock Option Plan. The employment agreement may be terminated by the employee upon ninety day's notice or by the company upon payment of a severance equal to the lesser of twelve month's base salary or the base salary for the balance of the employment agreement's term. The agreement provides that the company, in its discretion, may fulfill its obligations to Mr. Marshall in cash or in stock at such times as the Board of Directors shall determine.

Mr. Marshall's employment agreement contains customary covenants prohibiting him from disclosure of confidential information regarding the company, its inventions and its products, and provisions confirming that all inventions conceived, made or developed by him and relating to the business of the company constitutes the sole property of the company. Mr. Marshall's employment agreement contains covenants restricting him from engaging in any activities competitive with the business of the company during the term of his agreement and for a period of two years after termination.

Conversion of Consultant Fees to Common Stock

As stated above, as of December 31, 2000, the company had accrued, in the aggregate, $201,000, $214,000 and $250,000 for payment to Keith E. Gleasman, Vernon E. Gleasman and James A. Gleasman, respectively, under their consulting agreements. Effective December 1, 2000, the consulting agreements were modified to authorize the Board of Directors, in its sole discretion, to pay accrued and future Gleasman consulting fees in cash or the capital stock of the company, or a combination of both, at such times as the Board deems appropriate.

On March 26, 2001, the Board elected to pay the amounts of accrued consulting fees owed to the Gleasmans as of December 31, 2000 in common stock rather than cash. It therefore authorized the issuance of 38,286, 40,762 and 47,619 common shares to Keith E. Gleasman, Vernon E. Gleasman and James A. Gleasman, respectively in lieu of payment of such accrued fees in cash. The conversion price was $5.25 per share. On March 26, 2001, the closing price for the company's common stock on the OTC Electronic Bulletin Board was $5.00 per share.

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Option/SAR Grants in Last Fiscal Year

The following table sets forth certain information for the named executive officers as well as the company's consultants with respect to the grant of options to purchase common stock during the fiscal year ended December 31, 2000.

Name	Shares Underlying Options Granted	% of Options Granted to Employees	Exercise Price	Expiration Date
Keith E. Gleasman James A. Gleasman Vernon E. Gleasman Morton A. Polster Samuel M. Bronsky	0 0 0 0 0	0% 0% 0% 0% 0%	0 0 0 0 0	0 0 0 0 0

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

The following table sets forth certain information for the named executive officers as well as the company's consultants with respect to the exercise of options to purchase common stock during the fiscal year ended December 31, 2000 and the number and value of securities underlying unexercised options held by the Named Executive Officers as well as the company's consultants as of such date.

Name	Shares Acquired on Exercise	Value Realized	Number of Unexercised Options at December 31, 2000 Exercisable      Unexercisable		Value of Unexercised    In-the-Money Options   at December 31, 2000(1) Exercisable     Unexercisable
Keith E. Gleasman James A. Gleasman Vernon E. Gleasman Morton A. Polster Samuel M. Bronksy	0 0 0 0 0	0 0 0 0 0	20,000 20,000 20,000 60,000    0	5,000 5,000 5,000 40,000    0	$   0   $   0   $   0   $   0   $   0	$   0   $   0   $   0   $   0   $   0

(1)     The closing price of the company's common stock on December 29, 2000 (the last trading day of the year) was $4.125 per share. Since the per share exercise price is $5.00 under the option agreements, none of the options were "in-the-money" as of that date.

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Year 2000 Options

No options were granted in the fiscal year ended December 31, 2000 under the company's 1998 Stock Option Plan.

1998 Stock Option Plan

On December 1, 1997, the company's Board of Directors adopted the company's 1998 Stock Option Plan pursuant to which officers, directors, key employees and/or consultants of the company may be granted incentive stock options and/or non-qualified stock options to purchase up to an aggregate of 2,000,000 shares of the company's common stock. On May 27, 1998, the company's shareholders approved the 1998 Stock Option Plan. On December 17, 1998, the company registered the shares reserved for issuance under the 1998 Stock Option Plan under the Securities Act of 1933.

With respect to incentive stock options, the plan provides that the exercise price of each such option must be at least equal to 100% of the fair market value of the common stock on the date that such option is granted (110% of fair market value in the case of shareholders who, at the time the option is granted, own more than 10% of the total outstanding common stock), and requires that all such options have an expiration date not later than the date which is one day before the tenth anniversary of the date of the grant of such options (or the fifth anniversary of the date of grant in the case of 10% shareholders). However, in the event that the option holder ceases to be an employee of the company, such option holder's incentive options immediately terminate. Pursuant to the provisions of the plan, the aggregate fair market value, determined as of the date(s) of grant, for which incentive stock options are first exercisable by an option holder during any one calendar year cannot exceed $100,000.

With respect to non-qualified stock options, the plan permits the exercise price to be less than the fair market value of the common stock on the date the option is granted and permits Board discretion with respect to the establishment of the terms of such options. Unless the Board otherwise determines, in the event that the option holder ceases to be an employee of the company, such option holder's non-qualified options immediately terminate.

The company's Board of Directors granted stock options under the 1998 Stock Option Plan to Herbert H. Dobbs, Lee E. Sawyer and Morton A. Polster entitling them to purchase an aggregate of 380,000 shares of common stock, all of which provide for an exercise price of $5.00 per share, are exercisable on a cumulative basis at the rate of 20% per year beginning on January 1, 1998 and provide that the right to exercise the option in accordance with its terms shall survive each person's termination of employment. Each option expires on December 31, 2007. The Board of Directors granted stock options under the 1998 Stock Option Plan to Vernon E. Gleasman, Keith E. Gleasman and James A. Gleasman entitling them to purchase an aggregate of 75,000 shares of common stock, all of which provide for an exercise price of $5.00 per share, are exercisable on a cumulative basis at the rate of 20% per year beginning on December 1, 1997 and provide that the right to exercise the option in accordance with its terms shall survive the consultant's termination of services. Each option expires on November 30, 2007.

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No options were granted under the company's 1998 Stock Option Plan during the fiscal year ending December 31, 2000. No options granted under the Plan were exercised during the fiscal year ended December 31, 2000.

On August 1, 2001, the Board of Directors granted incentive stock options under the 1998 Stock Option Plan to Michael Martindale and Jacob H. Brooks entitling them to purchase an aggregate 360,000 shares of common stock, all of which provide for an exercise price of $5.00 per share, are exercisable immediately and set forth terms consistent with section 422 of the Internal Revenue Code for incentive stock options. Each option expires on July 31, 2011.

On August 28, 2001, the Board of Directors granted nonqualified stock options under the 1998 Stock Option Plan to Samuel M. Bronsky entitling him to purchase an aggregate 100,000 shares of common stock at an exercise price of $5.00 per share. The options are exercisable immediately and expire on August 27, 2011.

On September 1, 2001, the Board of Directors granted incentive stock options under the 1998 Stock Option Plan to David K. Marshall entitling him to purchase an aggregate 90,000 shares of common stock at an exercise price of $5.00 per share, are exercisable immediately and set forth terms consistent with Section 422 of the Internal Revenue Code for incentive stock options. The options expire on August 31, 2011.

Business Consultants Stock Plan

See the discussion beginning on page 16 of this Proxy Statement.

COMMITTEE REPORTS

Audit Committee Report

The Audit Committee operates under a written charter adopted by the Board of Directors on April 14, 2000, which is included in this Proxy Statement as Appendix A. During fiscal 2000, the members of the Audit Committee were Herbert H. Dobbs, Morton A. Polster and Lee E. Sawyer.

The Audit Committee recommends to the Board of Directors, subject to shareholder ratification, the engagement of an accounting firm to be the company's independent auditors. The independent auditors are responsible for performing an independent audit of the company's financial statements in accordance with generally accepted auditing standards and to issue a report thereon. Management is responsible for our internal controls and the financial reporting process. The Audit Committee is responsible for monitoring and overseeing these processes.

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The Audit Committee held 2 meetings during the 2000 fiscal year. Management represented to the Audit Committee that our financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee met, reviewed and discussed the audited financial statements of the company for its fiscal year ended December 31, 2001 with management and separately, with the independent auditors.

The Audit Committee discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, "Communication with Audit Committees," relating to the conduct of the audit.

The Audit Committee has received the written disclosures and accompanying letter from the independent accountants required by Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees," disclosing to the Audit Committee all relationships between the accountants and the company that may reasonably bear on independence and confirming the accountants' independence. The Audit Committee discussed the issue of independence with the company's independent accountants and received confirmation of such discussion from the independent accountants.

Based upon its review of the audited financial statements and the discussions referred to in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements of the company for its fiscal year ended December 31, 2000 be included in the company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 for filing with the Securities and Exchange Commission.

Herbert H. Dobbs, Chairman
Morton A. Polster
Lee E. Sawyer

The Notice of the annual meeting of shareholders, this Proxy Statement and accompany Proxy Card have been authorized by order of the Board of Directors.

/s/ Morton A. Polster                        
Morton A. Polster, Secretary

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TORVEC, INC., 11 POND VIEW DRIVE, PITTSFORD, NY 14534
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 24, 2002

The undersigned Shareholder of Torvec, Inc. hereby appoints and constitutes Keith E. Gleasman and Michael Martindale, and either of them, the proxy or proxies of the undersigned with full power of substitution and revocation, for and in the name of the undersigned to attend the annual meeting of Shareholders of the Company to be held at the Casa Larga Vineyards, 2287 Turk Hill Road, Fairport, New York 14450, on Thursday, January 24, 2002, at 7:00 P.M., local time, and any and all adjournments of said meeting, and to vote all shares of stock of Torvec, Inc., registered in the name of the undersigned and entitled to vote at said meeting upon the matters set forth below.

Management Recommends a VOTE FOR Items 1, 2, 3, 4, 5 and 6.

1.	ELECTION OF DIRECTORS: Election of the directors listed below to serve until the annual meeting of Shareholders in the year 2002 and until their successors are duly elected and qualified.
		FOR ALL NOMINEES LISTED BELOW: (EXCEPT AS MARKED TO THE CONTRARY BELOW):      WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW:       INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through his name on the list below: Herbert H. Dobbs   Keith E. Gleasman   Michael Martindale   Jacob H. Brooks   Morton A. Polster   James A. Gleasman
2.        APPOINTMENT OF AUDITORS: Ratification of the appointment of Richard A. Eisner & Company, LLP by The Board of Directors as independent auditors for the fiscal year ending December 31, 2001								Torvec, Inc. Annual Meeting - January 24, 2002 Dated: ____________________________ __________________________________ Number of Shares Voted
			FOR	AGAINST		ABSTAIN
3.        APPROVE SHARE INCREASE:  Increase the number of shares we can issue under our Business Consultants Stock Plan from 600,000 to 1,000,000 shares
			FOR	AGAINST		ABSTAIN
4.        APPROVE BYLAW AMENDMENT to permit special shareholder meetings to be called only by board of directors.
			FOR	AGAINST		ABSTAIN
5.        APPROVE BYLAW AMENDMENT to provide that directors may be removed only for cause by the shareholders.
			FOR	AGAINST		ABSTAIN
6.        APPROVE BYLAW AMENDMENT to provide procedures to govern shareholder proposals at annual meetings.
			FOR	AGAINST		ABSTAIN
This Proxy will be voted as specified. If no specification is made, this Proxy will be voted IN FAVOR OF PROPOSALS 1, 2, 3, 4, 5 and 6.					Joint owners should each sign. Executors, trustees, guardians, corporate officers, and other representatives should give title		_____________________________________                         Signature ___________________________________                         Signature

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

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                                                                                            APPENDIX A

TORVEC, INC.

AUDIT COMMITTEE CHARTER

Effective April 17, 2000

I.	PURPOSE
	The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities relating to
	(1)	monitoring the quality, reliability and integrity of the Company's external financial reporting process;
	(2)	the adequacy of the Company's internal controls particularly with respect to the Company's compliance with legal and regulatory requirements and corporate policy; and
	(3)	the independence and performance of the Company's independent accountants, who shall be ultimately accountable to the Audit Committee and the Board of Directors.
II.	RESPONSIBILITIES
	The Audit Committee's responsibilities shall include:
	o	Subject to shareholder approval, nominating, employing and replacing, the independent accountants to audit the financial statements of the Company;
	o	Reviewing and appraising the audit efforts of the Company's independent accountants;
	o	Ensuring that the independent accountants submit, at least annually, to the Audit Committee a formal, written statement delineating all relationships between the independent accountants and the Company. The Audit Committee is responsible for actively engaging in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants. As appropriate, the Audit Committee shall recommend that the Board of Directors take appropriate action in response to the independent accountants' report to satisfy itself of their independence;

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	o	Reviewing with management and the independent accountants the audited financial statements to be included in the Company's Annual Report on Form 10-K. Such review shall include discussing with the independent accountants those matters required to be discussed under generally accepted auditing standards;
	o	Reviewing with management and the independent accountants the Company's financial information to be included in its quarterly reports on Form 10-Q prior to filing such reports with the Securities and Exchange Commission. Such review shall include discussing with the independent accountants those matters required to be discussed under generally accepted auditing standards. The Chair of the Audit Committee, or the Chair's designee, may represent it for the purposes of the review with management and the independent accountants;
	o	Meeting with management periodically to review the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures;
	o	Providing an open avenue of communication among and individually with the independent accountants, financial and senior management, and the Board of Directors, and taking appropriate actions resulting from this interaction;
	o	Reviewing and assessing the adequacy of this Charter on an annual basis and recommending changes, if any, to the Board of Directors.
III.	COMPOSITION
	Effective no later than June 1, 2001, the Audit Committee shall be composed of at least three members, comprised solely of independent directors, each of whom is able to read and understand fundamental financial statements, including the Company's balance sheet, income statement, and cash flow statement or will become able to do so within a reasonable period of time after his or her appointment to the Audit Committee. Additionally, at least one member of the Audit Committee shall have had past employment experience in finance or accounting, or requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, such as being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.

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Notwithstanding the above, one director who is not independent as defined herein and is not a current employee or an immediate family member of such employee, may be appointed to the Audit Committee if the Board of Directors, under exceptional and limited circumstances, determines that membership on the Audit Committee by the individual is in the best interests of the Company and its shareholders, and provided that the Board discloses in the next Annual Proxy Statement subsequent to such determination the nature of the relationship and the reasons for that determination.
For purposes of Audit Committee composition, the term "independent director" means a person other than an officer or employee of the Company or its subsidiaries or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The following persons shall not be considered independent:
o	a director who is employed by the Company or any of its affiliates for the current fiscal year or for any of the past three fiscal years of the Company;
o	a director who accepts any compensation from the Company or any of its affiliates in excess of $60,000 during the previous fiscal year other than compensation for Board service, benefits under a tax qualified retirement plan, or non-discretionary compensation;
o	a director who is a member of the immediate family of an individual who is, or has been in any of the past three fiscal years, employed by the Company or any of its affiliates as an executive officer. Immediate family includes a person's spouse, parents, children, siblings, mother-in-law, father-in-law, brother-in-law, sister-in-law and anyone who resides in such person's home;
o	a director who is a partner in, or a controlling shareholder, or an executive officer of any for-profit business organization to which the Company made or from which the Company received payments (other than those arising solely from investments in the Company's securities) that exceed five percent of the Company's or such business organization's consolidated gross revenue or $200,000, whichever is more, in any of the past three fiscal years;
o	a director who is employed as an executive of any other entity where any of the Company's executives serve on that entity's Compensation Committee.

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	The members of the Audit Committee shall be elected by the Board at the annual organizational meeting of the Board. The members of the Audit Committee shall serve until their successors shall be duly elected and qualified. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.
	The Audit Committee shall have the authority to retain special legal, accounting or other consultants to advise it. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent accountants to attend a meeting of or to meet with any members of, or consultants to, the Audit Committee.
IV.	MEETINGS
	The Committee shall meet at least four times annually. As part of its job to foster open communication, the Committee shall meet at least annually with management and the independent accountants in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately.
V.	LIMITATION OF DUTIES
	While the Audit Committee has the responsibilities and powers set forth in the Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete, accurate and in accordance with generally accepted accounting principles. This is the responsibility of management and the independent accountants. It is not the duty of the Audit Committee to investigate or resolve disagreements, if any, between management and the independent accountants or to assure compliance with laws, regulations and the Company's Employee Practices Handbook.

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                                                                                            APPENDIX B

BY-LAWS OF







ARTICLE II
SHAREHOLDERS

3.     SPECIAL MEETINGS

           Special meetings of the shareholders may be called by a majority vote of the board of directors from time to time and at any time. The notice of any special meeting shall state the purpose or purposes of the proposed meeting. Business transacted at a special meeting shall be confined to the purposes stated in the notice.

12.     SHAREHOLDER MEETINGS - MATTERS CONSIDERED

          The matters to be considered and brought before any annual or special meeting of shareholders of the company shall be limited to only such matters, including the nomination of election of directors, as shall be brought properly before such meeting in compliance with the procedures set forth in this Article II, Section 12.

          For any matter to be properly brought before any annual or special meeting of shareholders, the matter must be (i) specified in the notice of annual or special meeting given by or at the direction of the board of directors, (ii) otherwise brought before the annual meeting by or at the direction of the board of directors or (iii) brought before the annual meeting in the manner specified in this Article II, Section 12 by a shareholder.

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Inclusion in the Company's Proxy Statement

          A shareholder's proposal, including the nomination of any person or persons for election as a director or directors of the company, shall be included in the notice of annual meeting, given by or at the direction of the board of directors, shall be included on the company's proxy card and included along with any supporting statement provided by the shareholder in the company's proxy statement for such meeting only if the shareholder making the proposal is eligible and follows certain procedures. A shareholder is eligible if, and only if, the shareholder has beneficially owned at least $2,000 or 1% in market value of the company's common stock continuously for at least one year before the date the shareholder submits a proposal and such ownership continues through the date of the annual meeting. Any proposal made by an eligible shareholder shall be properly brought before a regularly scheduled annual meeting only if notice of the matter to be presented by the eligible shareholder at such regularly scheduled annual meeting of shareholders shall be delivered to the secretary of the company at its principal executive offices not less than 120 days prior to the first anniversary date of the company's proxy statement released to shareholders in connection with the previous year's annual shareholders' meeting. If the company did not hold an annual meeting the previous year or if the date of the current year's annual meeting has been changed by more than 30 days from the date of the previous year's annual meeting, the deadline shall be a reasonable time before the company begins to print and mail its proxy materials in connection with the current year's annual meeting. These deadlines shall be printed in the company's proxy statement in the case of a regularly scheduled annual meeting and, if the company did not hold an annual meeting in the previous year or the company has changed the date of its meeting for the current year more than 30 days from last year's annual meeting, the deadline will be specified in the company's Form 10-QSB filed with the Securities and Exchange Commission at least 120 days prior to the date of such meeting.

          In addition to the requirements set forth above, and to any other requirements under applicable law and the certificate of incorporation of the company, an eligible shareholder may only submit a proposal for inclusion in the company's notice, proxy statement and form of proxy for an annual meeting of shareholders if the eligible shareholder and his or her submission is in compliance with all of the rules set forth in Regulation Section 240.14a-8 governing shareholder proposals promulgated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission ("Exchange Act"), or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission governing shareholder proposals, and not excluded under the provisions of Regulation Section 240.14a-8(i) Question 9 and Regulation Section 240.14a-9 promulgated under the Exchange Act. The procedures set forth in said Regulation Section 240.14a-8 shall govern the disposition of all proposals for which a shareholder seeks inclusion in the Company's proxy materials.

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Shareholder Proxy Statements

          Any shareholder desiring to nominate any person or persons for election as a director or directors of the company or who desires to bring any matter or matters before an annual meeting and who fails to meet the requirements set forth above with respect to inclusion of such nomination or proposed matter in the company's proxy statement, in order to bring such nomination and/or matter properly before an annual meeting of shareholders, shall solicit the shareholders of the company by means of a notice, proxy statement and form of proxy all prepared in accordance with the rules and regulations governing the solicitation of proxies promulgated under the Exchange Act. Any shareholder desiring to nominate any person or persons for election as a director or directors of the company and/or bring any matter before an annual meeting shall deliver a written statement not less than 45 days prior to the first anniversary date on which the company first mailed its proxy solicitation materials for the prior year's annual meeting of shareholders that such shareholder intends to deliver a proxy statement and form of proxies to holders of at least a percentage of the company's voting shares required to carry the proposal, includes the same written statement in its proxy materials filed with the Securities and Exchange Commission and immediately after soliciting the percentage of shareholders required to carry the proposal provides the company with a statement from any solicitor or other person with knowledge that the necessary steps have been taken to deliver a proxy statement and form of proxy to holders of the percentage of the company's voting shares required under these bylaws to carry the proposal.

          If during the prior year the company did not hold an annual meeting, or if the date of the annual has been changed more than 30 days from the prior year, then such written statement must be received within 45 days before the company mails its proxy solicitation materials for the current year's annual meeting, such deadline to be specified in the company's Form 10-QSB filed with the Securities and Exchange Commission at least 120 days prior to the date of such meeting.

          In the case of the shareholder who desires to nominate any person or persons for election as a director or directors of the company, the written statement shall set forth the name of the person or persons to be nominated, the number and class of all shares of each class of stock of the company owned of record and beneficially by each such person, as reported to such shareholder by such nominee(s), the information regarding each such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation SK adopted by the Securities and Exchange Commission, each such person's signed consent to serve as a director of the company if elected, such shareholder's name and address, the number and class of all shares of each class of stock of the company owned of record and beneficially by such shareholder and the date or dates when such ownership was acquired. Any shareholder who gives a written statement with respect to any matter proposed to be brought before the meeting (not involving nominees for director) shall deliver the text of the proposal to be presented and a brief written statement of the reasons why such shareholder favors the proposal and setting forth such shareholder's name and address, the number and class of all shares of each class of stock of the company owned of record and beneficially by shareholder and the date or dates when such ownership was acquired. If applicable, any material interest of such shareholder in the matter proposed, other than as a shareholder, shall also be set forth.

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          As used in this Section 12, shares "beneficially owned" shall mean all shares which such person is deemed to beneficially owned pursuant to Rules 13d-3 and 13d-5 promulgated under the Exchange Act.

13.     CONDUCT OF SHAREHOLDERS' MEETINGS

          The chairman of the board of directors or, in his absence, the chief executive officer of the company or, if both be absent, the president of the company shall preside over all annual and special meetings of the company's shareholders. He may establish such rules and regulations for the conduct of the meeting as he may deem to be reasonably necessary or desirable for the orderly and expeditious conduct of the meeting. He shall also have the exclusive authority, power and duty to determine whether notice of nominees and other matters proposed to be brought before an annual or special meeting has been duly given in the manner provided in Article II, Section 12 and, if no so given, shall direct and declare at the meeting that such nominees and/or such other matters shall not be considered.

ARTICLE III
DIRECTORS

5.     REMOVAL OF DIRECTORS

          Any or all of the directors may be removed for cause only by vote of a majority of the shares issued and outstanding. No directors may be removed without cause.

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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-KSB/A

     [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

     [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from                                to                              

                    Commission file number                    000-24455                  

     TORVEC, INC.     
(Name of Small Business Issuer in its charter)

                        NEW YORK                                                                     16-1509512     
          (State or other jurisdiction of                                   I.R.S. Employer Identification No.
             incorporation or organization)

                    11 Pond View Drive                                                                  14534
                    Pittsford, New York                                                              (Zip Code)
     (Address of principal executive offices)

                     Issuer's Telephone Number, including Area Code: (716) 248-8549

                    Securities registered pursuant to Section 12(b) of the Exchange Act:

                      Title of each class                                                       Name of each exchange on
                                                                                                                   which registered
                                                                                                                                                       
                                                                                                                                                       

Securities registered pursuant to Section 12(g) of the Exchange Act

$.01 par value common voting stock
(Title of class)

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               Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    X             No       

               Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

               State issuer's revenues for its most recent fiscal year.     $0.00

               State the aggregate market value of the voting stock held by nonaffiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12(b)-2 of the Exchange Act).     $17,126,606

               Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS |
DURING THE PAST FIVE YEARS)

               Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes                    No          

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

               State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.  22,678,825

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Form (Check one):

Yes                No     X    

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PART I

THE COMPANY

Item 1.     DESCRIPTION OF BUSINESS.

(a)   History and Development of Our Inventions

               Torvec, Inc. was incorporated as a New York business corporation on September 25, 1996. Upon its incorporation, the company acquired numerous patents, inventions and know-how developed for more than ten years by Vernon E. Gleasman and members of his family. The company presently is a development stage company specializing in automotive and related technology. The company owns many U.S. and international patent properties developed by the Gleasmans protecting important inventions relating to five different areas of automotive technology:

o (i) steering drive for tracked vehicles

o (ii) infinitely-variable transmission

o (iii) hydraulic pump and motor

o (iv) constant velocity joint

o (v) spherical gearing

               As a family, the Gleasmans have operated and sold their own innovative products and companies over the past 30 years. The Gleasmans knowledge of the automotive industry and its trends was the basis of the various research projects that are now the properties of the company. A review of Vernon Gleasman's first 100 plus inventions indicates that almost all of them are improvements of other companies' technology, and most of Vernon Gleasman's inventions were created either while he was employed by various companies, or while he was acting as a consultant to these other companies.

               Historically, the major impediments to the incorporation of Gleasman inventions into other companies' vehicles have been the "not invented here" syndrome and the problems relating to enforcement of licensing agreements by an independent inventor. Consequently, the company decided to build refined prototypes of each of its inventions, and to date has engineered and developed highly refined prototypes of its steer drive for tracked vehicles, hydraulic pump and motor, spherical gearing and constant velocity joint. The company is currently engineering and developing its infinitely variable transmission prototype.

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               Each of the company's inventions can be commercialized on a stand-alone basis. However, in contrast to the Gleasmans' past procedures of selling their inventions for another company's use, the management of Torvec decided to incorporate the steer drive mechanism and, as they are built, the hydraulic pump and motor, spherical gearing and constant velocity joint into a new type of vehicle which can be designed as a specific product that can be sold directly to the consumer. The company therefore built the highly refined prototype of its fast-track, full terrain vehicle-the FTVä . The FTV prototype was completed in February, 1999 and was initially showcased to the public in early spring, 1999. The company intends to also incorporate its infinite variable transmission into the FTV when that prototype is completed.

               To date, the company has no employees, relying on the full-time services of Vernon, Keith and James Gleasman as consultants. The company also relies on the services of the staff of Joseph Neri Chevrolet, Williamson, New York on a project by project basis, free of charge. To date, the company has conducted substantially all of its research, testing and product-showcasing at Neri Chevrolet. It has outsourced the actual building of all of its prototypes, subject to the direct supervision of the Gleasmans.

                In addition, Morton A. Polster devotes the majority of his time rendering ongoing patent services to the company, including the prosecution of all of the company's foreign patent applications. Herbert H. Dobbs is active in company powerpoint presentations to and discussions with auto and truck manufacturers, auto parts suppliers, glass component suppliers and the U.S. military. Lee Sawyer provides the company with ongoing expertise regarding the Asian automotive markets based upon his 30 years experience with Asian automobile manufacturers. He has facilitated the company's discussions with Japanese and Korean auto manufacturers and has established company contacts with Chinese, Indonesian and other Far Eastern country representatives.

(b)   Our Patented Automotive Properties

               The following is an overview of our automotive technologies:

Torvec's FTVä

               Historically, wheeled trucks and cars have been able to travel at high speeds on prepared roads and are easy to drive and steer. However, wheeled trucks and cars have lacked the ability to traverse truly difficult terrain. On the other hand, tracked vehicles have the ability to traverse truly difficult terrain but are difficult to steer precisely, are cumbersome to drive and are limited to relatively low speeds even on prepared roads.

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               The company's FTV is a new type of vehicle, that management believes combines the high speed capabilities of trucks and cars with the high traction capabilities of tracked vehicles.  The company has tested the FTV prototype over the past 2 years at Neri Chevrolet. It has demonstrated the FTV in person to representatives of the majority of U.S. and foreign auto and truck manufacturers at the Neri facility over the past 2 years. Based upon these tests, demonstrations and the reaction of industry representatives, the company believes it has shown that the FTV is relatively easy to drive and steers as easily as a car. The company also believes it has shown that this tracked vehicle can traverse almost any terrain at speeds ranging from 45 to 65 mph. The company also believes that it has shown that the FTV is also environmentally sensitive since its low ground pressure, less than 2 pounds per square inch, does not damage paved road surfaces or leave ruts or cause potholes on unpaved surfaces. We believe our rubber tracks will be made by Goodyear, a corporation dedicated to supporting original equipment manufacturers, and Goodyear has provided the tracks for the company's prototype FTV. The FTV is able to perform as it does because of its unique steering mechanism, which is protect by several patents in Europe and Japan as well as the following U.S. patents: multi-axle vehicle steer drive system (4732053), no-slip imposed differential reduction drive (4776235), no-slip imposed differential (4776236), steer-driven reduction drive system (4895052) and modular track system (6135220). This steer-drive mechanism can best be described in engineering terms as a hydro mechanical steering mechanism. The "mechanical" portion is manufactured from conventional, high volume gearing, while the "hydro" portion is our patented hydraulic pump and motor. Conventional hydraulic pumps and motors are large, noisy and inefficient at low revolutions per minute. The company believes that company sponsored tests at the Neri facility has shown that our patented hydraulic pump and motor has substantially solved these problems.

Torvec's Infinitely Variable Transmission

               The Company is now building a prototype of the infinitely variable transmission, which we estimate will be completed by mid to late summer. The infinitely variable transmission is a transmission that provides an uninterrupted drive through an infinite number of geared speed ratios, allowing ideal torque flow to propel the vehicle while permitting the engine to run at optimum efficiency. In sharp contrast to work being done by other companies in relation to diesel/gasoline engine management, the company's new transmission will not require any change, costly or otherwise, to the manufacture or operation of existing diesel/gasoline engines. Instead, it permits present automotive diesel/gasoline engines to operate in a near steady-state mode, with dramatically reduced pollution, at most times during normal operation, i.e., under the starting, stopping, acceleration and deceleration of normal urban traffic. For instance, such a near steady-state optimum condition may match the usual engine setting when the vehicle is being driven at its top urban speed (e.g., 35-45 miles per hour). It should be noted that this optimum urban cruising speed may be only approximately twice the normal idling speed of the engine, and that this steady-state setting is relatively low in comparison to the normally required engine speed of three, four or five times idling speed that must be attained by the same diesel/gasoline engine each time the vehicle accelerates between each of the conventional forward gears (e.g., when shifting from first gear to second gear, then from second to third, etc.).

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               In addition to having the potential of reducing particulates, the company's transmission will be less complicated and has approximately 1/3 fewer parts when compared to a conventional four or five speed automatic transmission, making it smaller in size, lighter in weight and, therefore, further improving fuel economy. The company's transmission, which the company believes will be simpler and less expensive to manufacture than existing transmissions, should provide the automotive industry with a higher performing product at a lower cost.

               In view of the above, and because all vehicles currently have transmissions, the company believes that the company's transmission will permit substantial reductions in diesel/gasoline engine pollutants and that such significant environmental benefits will be achieved without an economic penalty. Further, it is believed that the company's transmission will not be in direct competition with companies who provide other diesel/gasoline engine pollution remedies and that the latter may even be interested in working with the company to explore possible synergistic effects with the company's transmission.

               In December, 1999, the company finished a wide-ranging and complete CAD/CAM design evaluation on the infinitely variable transmission which demonstrates that the Company's transmissions will meet the new emissions standards for light trucks announced in December, 1999 by the federal government. The evaluation included finite element analysis, fluid dynamics analysis and material compatibility analysis for "real world conditions" under temperatures ranging from minus 20 degrees fahrenheit to 150 degrees.

               Because it is an infinitely variable transmission and changes its ratios extremely quickly, the company's transmission can accelerate a diesel-powered vehicle as quickly as a gasoline-powered vehicle. The company's transmission also may be able to significantly improve the performance of electric drive vehicles. There are a number of kinds of electric motors that can be chosen to drive a vehicle. Their performance and physical characteristics vary considerably. Weight (for a given power level), zero-speed torque, useful speed range, efficiency-vs-motor-speed, and control characteristics are among these, and there are conflicts in making the best choice for a given vehicle application. A transmission of some sort commonly is needed to resolve these issue. The performance characteristics of the company's transmission make it a promising candidate for such applications.

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Hydraulic Pump/Motor, Constant Velocity Joint, and Spherical Gearing

               The company's patented infinitely variable transmission will incorporate a hydraulic pump/motor machine and, although it can be operated with commercially-available pump/motors, it is most effectively used in combination with the company's patented hydraulic pump/motors. The company's pump and motor is significantly simpler, smaller and lighter than other commercially available pump/motors having comparable performance specifications. The key feature of the company's pump and motor is its swash-plate mounting arrangements that utilize a new form of gearing which is also proprietary to the company. This new form of gearing -- spherical gearing -- is based upon the geometry of spheres rather than conventional gear of geometry of cylinders and cones. This spherical gearing has been incorporated in yet another company-owned invention, which has been developed to replace constant velocity joints used, among other places, in all front-wheel drive vehicles. The company's constant velocity joint is a departure from known designs, and its efficiency and weight savings may provide a significant competitive advantage in the annual constant velocity joint market of 180,000,000 units per year (1994 Annual Report of GKN (the world's largest producer of constant velocity joints)).

               The company's spherical gears have been used to form a geared ball-and-socket coupling in which driving tooth contact is maintained continuously while, at the same time, permitting the coupling to be flexed at 40 degrees to either side of center. The potential versatility of the company's spherical gears may open the door to many yet unknown solutions and products yet to be discovered. This new gearing paradigm is found in the swash-plate mechanism of the company's hydraulic pump and motor, and it will also be used to create a constant velocity joint as a working prototype ready for installation in a car. The company's constant velocity joint is designed to be interchangeable in over 40 existing car models. It is notably lighter, less costly to manufacture, and potentially more durable than the constant velocity joints presently being used in all front-wheel drive vehicles. In spite of mechanical and design limitations, the constant velocity joints currently in use are manufactured at the rate of over "180 million units annually" according to the 1994 Annual Report of GKN.

(c)     Our Patented Ice Technology

On November 29, 2000, the Company entered into an Agreement and Plan of Merger to acquire Ice Surface Development, Inc. ("ISD"), a wholly-owned subsidiary of UTEK Corporation, 202 South Wheeler Street, Plant City, Florida 33566. As a result of the merger, the Company acquired through a wholly-owned subsidiary, a 20 year, exclusive worldwide license granted by the Trustees of Dartmouth College to ISD for land-based motorized applications to a novel ice adhesion modification system developed by Professor Victor F. Petrenko at Dartmouth's Thayer School of Engineering. The Dartmouth patented technology allows for the rapid non-thermal de-icing of vehicle surfaces using a novel electrochemical decomposition technology invented by Dr. Petrenko. Dr. Petrenko's work has shown that electrodes attached directly to surfaces can break down ice and water through the process of electrolysis. When applied to automotive and truck surfaces, gas bubbles of hydrogen and oxygen are formed during the electrolysis process. These bubbles generate pressure on the vehicle surface therefore shedding ice.

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               In June, 2000, Dr. Petrenko's technology was licensed by Dartmouth to The BF Goodrich company for all aircraft and marine applications. Recently Discover Magazine honored Dr. Petrenko's technology as the "most innovative invention for the aerospace industry in the year 2000."

               Aside from repelling ice on glass and other surfaces, Dr. Petrenko's technology also increases the traction of rubber on ice by a factor of 20. New ice traction systems based upon this technology could give vehicles, including the FTV vehicle, as much traction on ice as if they were driving on dry pavement. Vehicles could one day be equipped with "smart" tracks that grab ice.

               The company acquired ISD from UTEK to integrate the Dartmouth icing technology into its FTVä as well as to sub-license the technology for a wide-assortment of land-based motorized vehicle applications (e.g. cars, trucks, trains, trailers), including their components (e.g. windshields).

(d)     Current Status of Product Development

               Based upon our research to date, we believe the following inventions will eventually become commercially viable:

o

o

o

o

o the FTV, including the steering drive for tracked vehicles;

the infinitely variable transmission;

the hydraulic pump and motor;

the constant velocity joint which includes Torvec's spherical gearing;

the ice technology.

               During the past three years, we have engineered and developed our inventions from concept to prototype, a process which has included detail computer aided design, generation of computer aided engineering simulation, generation of adequate drawings and process definition, the manufacture and assembly of each of our prototypes, testing of the prototypes, identifying and resolving problems resulting from testing and updating the design where appropriate to reflect any changes needed.

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These inventions are in the following stages of development:

o the FTV - the prototype has been completed and continues to be showcased to automobile, truck manufacturers and assembly suppliers. We have developed a detailed manufacturing plan for the FTV, including factory floor layouts, commitments for the sourcing of major assemblies, identification of major suppliers, identification of critical skills necessary to produce the vehicle on a commercial basis, assembly cost estimates, and an overall business plan for the manufacture, assembly and distribution of the vehicle;

o the infinitely variable transmission - the initial detailed design for the infinitely variable transmission has been completed. We are currently building and assembling a prototype of the infinitely variable transmission. The infinitely variable transmission incorporates the hydraulic pump and motor allowing us to meet the desired envelope for incorporation into automobiles, trucks and the FTV. Preliminary tests of the infinitely variable transmission have been performed at an independent test facility. The results have confirmed the transmission's function, which is to enable an automotive engine to run at a fixed revolutions per minute, while providing the needed range of power and torque output to reduce harmful exhaust emissions and improve efficiency;

o the hydraulic pump and motor - the prototype has been completed, testing has been completed and the pump and motor is now being incorporated into our infinitely variable transmission as discussed above;

o the constant velocity joint - the constant velocity joint prototype has been completed, has gone through preliminary testing, and our preliminary tests indicate that this will be a lower cost product with fewer components resulting in a more compact, lighter weight device than is currently used in the automotive industry;

o the ice technology - we continue to work with Dr. Petrenko at Dartmouth College to refine this technology. The technology is undergoing field testing by Goodrich for use in the aerospace industry. We, through Dr. Petrenko, share the results of this field testing, and we believe that the technology has been developed sufficiently to enable us to negotiate with automotive manufacturers, automotive parts suppliers as well as companies servicing the automotive industry to sublicense this technology.

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(e)     Business Development and Commercialization of Products

               Although we believe that we have made substantial progress in engineering, building and testing prototypes for each of our inventions and the FTV, to date we have not manufactured any of our inventions in commercial quantities for sale, and we have not entered into any written arrangements with auto or truck manufacturers for the manufacture, assembly, production or distribution of our products. As stated above, we believe our ice technology has been sufficiently developed, and we are currently entertaining proposals from companies to become sublicensees of this technology.

               The following table sets forth the advances we have made with respect to our technology, the material stages of development that are required in order to manufacture and commercially offer our products and an approximate timeline for doing so:

Product	Feasibility Studies/ Testing	Product/Process Development	Commercialization	Estimated Time to Commercialization
FTVÔ	Complete	Prototype built-being test driven and showcased	OEM discussions underway	24 to 36 months
Infinitely Variable Transmission	Complete	Prototype being built	OEM discussions underway	18 to 24 months
Hydraulic Pump/Motor	Complete	Prototype built; initial tool design in process	OEM discussions underway	9 to 10 months
CV Joint	Complete	Prototype built; initial tool design in process	OEM discussions underway	12 to 14 months
Ice Technology	Complete	Prototype built; field testing; in commercial design	Sublicense discussions underway	12 months

               As indicated in the above chart, we have been and continue to be in ongoing and periodic discussions with automobile manufacturers, truck manufacturers as well as parts and assembly suppliers to manufacture, produce and distribute our automotive technologies, including the FTV, to the consuming public. Generally, these discussions no longer are focusing on the validation and credibility of our inventions, but now are focusing on pricing issues as well as how to structure a Torvec-auto or truck manufacturer transaction, including direct licensing, joint venture partnership and the direct acquisition by or of Torvec through a merger or similar transaction. Based upon the status of these current discussions, including the regular and ongoing expressed interest in our technologies vocalized by U.S. and international auto and truck manufacturers, management believes that a written letter of intent regarding our automotive technology could be forthcoming within the next 12-18 months.

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               In August, 1999, we entered into a working relationship with HTV Export to conduct a worldwide market survey and introduce our inventions to potential customers including private companies and governmental agencies throughout Europe, Asia, Africa and South America. HTV Export has focused its attention on generating interest in our FTV and, in the course of its ongoing marketing efforts, has solicited and obtained valuable feedback on the uses to be made of and interest in purchasing, when it is available, the FTV. Within the last number of months, representatives of HTV Export have joined with Torvec management to provide automotive industry representatives its findings on the considerable worldwide interest in Torvec's FTV.

               Our board chairman, Herbert H. Dobbs, was the former technical director of the United States Army Tank-Automotive Command, which effectively made him the United States Army's chief engineer for all ground vehicles and related technology. Since his retirement from the U.S. Army in 1985, Dr. Dobbs has remained active as a consultant to the U.S. Army on specific issues related to his expertise and, since 1994, has been a member of or consultant to the Army Science Board. The Army Science Board provides direct advice to the Secretary of the Army, the Chief of Staff of the Army and the Department of the Army staff on technical and management issues. Dr. Dobbs has made a number of presentations regarding the FTV and its capabilities to the Army Science Board and is personally in a working relationship with senior U.S. Army personnel responsible for the development and acquisition of U.S. military ground vehicles. Under its normal procurement procedures, the Army tells industry what it needs and then chooses the best candidate offered by industry that meets specified Army requirements. Torvec management has been assured that the Army will consider the FTV as a candidate if and when the next U.S. military truck acquisition program is initiated by the Department of Defense.

(f)     Competition and Market Acceptance

               The company believes that its automotive technology is superior to similar products manufactured in the automotive industry and in some instances represents a true paradigm shift with respect to presently known technology. However, once the company commences operations, it will be competing against companies that have significantly greater financial, marketing and operating resources than the company. The company also believes that its ice technology is truly unique. No other company in the world possesses the right to commercialize such technology in the motorized, land-based vehicle field.

               The company's immediate future development is, in part, dependent upon its ability to successfully commercialize its ice technology either through a sublicense or through a joint venture arrangement. It is also dependent, in part, upon acceptance of the FTV vehicle especially in the Asian, African, South and Central American markets.

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               With respect to these foreign markets, the infrastructure of most of Asia, Africa, South and Central America is very similar to the U.S. in the early 1900's. At that time U.S. demographics were as follows: eighty percent of the population lived in rural areas, income was low and transportation was limited to walking, bicycles, push carts and animal pulled vehicles. Roads, when they existed, were dirt and at time impassable due to terrain or inclement weather. Even with the advent of automobiles, commerce remained inhibited because paved roads were only found in the cities. Similarly, the wheeled vehicles of the developing country today can only traverse the rural dirt roads during certain seasons of the year. When roads are in rough condition (e.g., muddy, blocked by snow or ice, etc.), there is little difference in travel time between an animal drawn cart, a man on foot or bicycle, or a wheeled car. If they are able to travel at all, even four-wheeled drive vehicles are usually limited to 4-5 mph under these conditions. The idealized vehicle would be a vehicle that could travel at higher speeds (25-50 mph), regardless of the terrain, significantly shortening the travel time between rural areas and the primary marketplaces in the city. A tracked vehicle, in effect, "brings its own road with it".

               The company's ability to generate revenue and become profitable is also dependent upon the automotive industry's acceptance of its other products, namely the infinitely-variable transmission, the hydraulic pump and motor, the constant velocity joint and spherical gearing. The company's ultimate growth and future financial performance will depend on demonstrating the advantages of such products over existing technologies to an automotive industry which has committed substantial resources to product systems utilizing old technology. In addition, despite management's belief that its products are superior, the company will have to overcome the "not invented here" attitude that permeates the industry. However, the recent Bush Administration decision to implement the previous administration's stricter diesel emission standards has lead to increased automotive industry interest in the emission reduction capabilities of the company's automotive inventions especially its infinitely-variable transmission.

Item 2.     DESCRIPTION OF PROPERTY.

               On January 7, 1998, the company entered into a Service and Space Agreement with Joseph L. Neri, Sr. (a shareholder) and Joseph Neri Chevrolet-Oldsmobile-Pontiac pursuant to which the company was entitled to lease the premises described below. The agreement was terminated on August 31, 1999 and, in accordance with an informal and oral understanding with Mr. Neri, the company was permitted to utilize the premises at no charge from time to time during fiscal year 2000 and anticipates utilizing the facility in fiscal year 2001 in similar fashion. The facility is located at 3740 Route 104, Williamson, New York (approximately 20 minutes from downtown Rochester, New York). The facility is approximately 17,000 sq. ft., situated on 8 acres of land. The company has been able to use the facility, all utilities (including telephone system with an after-hour answering service), computer system, service department, specialized equipment and tools with D.E.C. approved above-ground lifts, one of which has a 28,000 lb. capacity for trucks and buses, an 8 bay body shop, complete with a paint room and Kansas Jack straightening machine, and a two floor parts department. The company believes that this facility is sufficient to construct all prototype FTV vehicles as well as assemble and install all prototypes for the company's other products for testing and demonstration purposes.

               The executive offices of the company are located at 11 Pond View Drive, Rochester, New York 14534.

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Item 3.     LEGAL PROCEEDINGS.

Except as provided below, the company is not a party to any pending, material litigation. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the company.
a)	The Company's Lawsuits
(i)     On November 14, 2000, the company joined with Vernon and Keith Gleasman, as plaintiffs, in filing a lawsuit against McElroy Manufacturing, Inc., Arthur H. McElroy, II and Tri-Mc (collectively, "MMI") in the United States District Court for the Northern District of Oklahoma.                Under an October 10, 1991 agreement between MMI and the Gleasmans, McElroy was to manufacture from one to five prototypes of an hydraulic pump and motor designed by the Gleasmans for use in a continuously variable gear transmission also designed by them. The hydraulic pump and motor designed by the Gleasmans necessitated a constant velocity joint in order to be marketable, and the Gleasmans utilized a gimbal in their designs for the constant velocity joint. The designs and related technology were patented under U.S. Patent No. 5, 440,878.
MMI manufactured a first-generation prototype of the pump and motor using a gimbal for the constant velocity joint. However, after such manufacture, on numerous occasions, MMI stated to the Gleasmans that the first-generation prototype pulsated or oscillated during operation of the motor which rendered the pump and motor inoperable for its stated purposes and, thus, unmarketable, and that the gimbal was the source of the pulsation or oscillation.                In the summer of 2000, the company's engineers, based upon CAD/CAM studies, discovered that the first generation gimbal did not pulsate or oscillate. The Gleasmans and the company's management only then concluded that MMI had been misleading the Gleasmans, the company and the Court concerning the operability of the prototype of the pump and motor design which utilized the gimbal as a constant velocity joint.

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As the result of such discovery, management of the company believes that MMI's earlier statements regarding the inoperability of the gimbal were false and fraudulent and that MMI knew that the first-generation pump and motor utilizing a gimbal as the constant velocity joint, as specifically designed by the Gleasmans, did not pulsate or oscillate but was instead a valuable and marketable pump and motor system which could have been rapidly commercialized. Management therefore believes that the company has been harmed by MMI in the following important respects:
o	The Gleasmans and, later, the company were induced to proceed with expensive and time-consuming design, manufacturing and marketing of an alternative to the gimbal. Specifically, the Gleasmans and, later, the company, expended an aggregate sum of approximately $1,000,000 in the design, manufacture and marketing of spherical gear technology, in significant part, to replace the gimbal and subsequent pump and motor prototypes;
o	The Gleasmans, and later, the company, lost significantly valuable business opportunities available to them;
o	The Gleasmans, and later, the company, were induced to forebear the exercise of their rights to obtain worldwide patents on the pump and motor design which implemented a gimbal as the constant velocity joint.
By reason of the foregoing, management believes that MMI is liable to the plaintiffs for considerable compensatory and punitive damages in an amount to be determined at trial. The plaintiffs have demanded a jury trial with respect to this litigation.                On January 2, 2001, MMI moved to dismiss the plaintiffs' complaint on the grounds that it constituted an impermissible collateral attack on the arbitration award of April 22, 1999 and July 10, 2000. Moreover, MMI alleged that the plaintiffs' fraud claims were reviewed and rejected by the arbitrator.                On January 31, 2001 plaintiffs responded to MMI's motion to dismiss. In its papers, the plaintiffs stated that the fraud complained of was never at issue in the arbitration proceedings and that inasmuch as the Company was not a party to the arbitration, it should be permitted a full and fair opportunity to litigate its claims.

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	(ii)     On February 26, 2001, the company brought suit against John Spiezio and John Doe, a/k/a "Torvec1" in the United States District Court for the Western District of New York. The company contends that, Spiezio, John Doe and "Torvec1" either alone or acting on behalf of other persons, maliciously published numerous false and defamatory statements on the Internet worldwide website, "Raging Bull." The company also claims that the defendant(s) intentionally interfered with the company's business to its detriment. The company believes that as the result of the defendant(s) defamation and/or business interference, the company has sustained the following significant damages:
	o     an adverse effect upon the daily trading of the company's stock;
	o     an erosion of confidence among the company's current and potential shareholders;
	o     a diminution of the company's publicly trading stock value, in a range equal to at least $5.00 per share;
	o     damage to the business reputations of the company's management and officers.
The company seeks compensatory and punitive damages against the defendant(s) in an amount to be determined at trial and has demanded a jury trial. The Complaint has been filed but defendant(s) has yet to respond.

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b)	The Gleasman Litigation
On August 29, 1997, McElroy Manufacturing, Inc. of Tulsa, Oklahoma, and two MMI employees (collectively "MMI"), initiated a lawsuit against Vernon and Keith Gleasman in the United States District Court for the Northern District of Oklahoma. The company is not a party to this litigation. The plaintiffs claimed that the Gleasmans had breached an agreement dated October 10, 1991 to market inventions developed under U.S. Patent 5,440,878 (the gimbal patent), in which MMI had an interest. Secondly, the plaintiffs alleged that the two MMI employees should have been named as co-inventors on three other patents. The plaintiffs also sought reimbursement of their development costs in the amount of $750,000.
On February 6, 1998, the Court stayed all aspects of the litigation pending arbitration in New York State.
Hearings were conducted before the arbitrator in 1998. On April 22, 1999, the arbitrator issued a nonappealable decision which determined that Vernon and Keith Gleasman exclusively owned all three patents, thereby confirming that these patents, which were assigned by them to the company, are the exclusive patents of the company. The arbitrator also determined that neither party breached the 1991 Agreement, but that, in accordance with its terms, the sum of $862,699.61 should be paid to MMI (as reimbursement for development costs) by the Gleasmans out of royalties and other sums which they may receive and that MMI was entitled to a 20% interest in all royalties and other sums received by the Gleasmans.                On June 15, 1999, MMI filed its amended complaint in the United States District Court for the Northern District of Oklahoma. There were two causes of action. The first cause of action sought correction of the inventorship of the subject patents. The second cause of action sought an order confirming the arbitrator's award and, in addition, sought an order directing that the Gleasmans reimburse MMI immediately for its expenses in the amount of $862,699.61 plus interest accruing from the date of the arbitrator's award. 59

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               On March 31, 2000, the Court remanded the case to the arbitrator to clarify certain ambiguities regarding the payment and terms of his April 22, 1999 decision. On July 10, 2000, the arbitrator issued an "Addendum and Clarification Memorandum" awarding $360,000 to MMI in partial reimbursement of its expenses. This amount is to be paid by Vernon and Keith Gleasman, not the company.

               On March 23, 2001, the Court confirmed the arbitrator's award against Vernon and Keith Gleasman for MMI's expense reimbursement in the amount of $360,000. The Court stayed enforcement of the award until the court resolved the question of whether MMI committed fraud upon the court in bringing its lawsuit. As a condition for the stay, Vernon and Keith Gleasman deposited $423,000 (including $63,000 interest) with the Court.

               As stated above, the company is not, and never has been, a party to this litigation. Based upon the amended complaint filed by MMI and the order of the court confirming the award against Vernon and Keith Gleasman, the company's position has been confirmed that it is not obligated in any way to reimburse MMI for their expenses nor liable to MMI for any continuing royalty obligation or any other sums.

Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

               There were no matters submitted to the Company's shareholders during the fourth quarter of the Company's fiscal year ended December 31, 2000.

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PART II

Item 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)     Swartz Private Equity Financing

               On September 5, 2000 the Company entered into an Agreement with Swartz Private Equity, LLC pursuant to which Swartz Private Equity, LLC ("Swartz") granted to the Company a $50,000,000 equity funding commitment which continues for a period of thirty-six months. This flexible funding Agreement provides that from time to time at the Company's request, Swartz will purchase from the Company that number of the Company's common shares equal to 15% of the lesser of the number of shares traded in the market in the 20 business days before or after the requested purchase. The purchase price is the lesser of 91% of the lowest closing bid price for the Company's common stock during that 20 day period following the request or that price less $.20. Swartz will not be required to purchase at any one time shares having a value in excess of $2,000,000. The Company may make additional requests at intervals of approximately 30 days.

               As a commitment fee, the Company granted to Swartz commitment warrants to purchase 960,101 shares of the Company's common stock which warrants can be exercised at an initial exercise price of $4.875, the market price of the Company's common stock on the date of the commitment by Swartz. The total number of commitment warrants will be adjusted upwards to represent 4.5% of the total outstanding common shares of the Company under certain circumstances during the three years that the commitment remains in effect. The warrant exercise price is reset to the lowest closing price of the Company's common stock during the 5 trading days ending on each 6 month anniversary of the warrants issue date.

               In addition to the commitment warrants referred to above, Swartz will be issued a warrant to purchase one share of common stock of the Company for every ten shares that it purchases pursuant to the Agreement. These purchase warrants will initially be exercisable at 110% of the market price of the shares simultaneously purchased by Swartz. Such exercise price is subject to the same reset provisions as govern the commitment warrants.

               Swartz has been granted a right of first refusal to handle future financings for the Company. However, that right continues only during the period of the commitment and the commitment can be terminated at any time upon paying a termination fee to Swartz. The termination fee is a maximum of $200,000 and may be less, dependent upon the amount of financing which has been provided by Swartz prior to the termination.

               The Company has agreed to reserve 5,000,000 common shares for sale pursuant to this Agreement.

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               On October 2, 2000, the Company filed a Current Report (Form 8-K) to disclose the Swartz transaction as well as to file all documents in connection therewith.

               In the Agreement with Swartz, the Company agreed to file a Registration Statement pursuant to the Securities Act of 1933 for sale by Swartz of the shares acquired through this transaction. The Company filed a Form SB-2 Registration Statement covering the 5,000,000 shares reserved for sale under the Agreement on October 19, 2000. Such Registration Statement was declared effective by the Securities and Exchange Commission on October 23, 2000.

               In accordance with the Agreement, the Company sold 36,735 shares to Swartz and raised proceeds equal to $108,643.76 during its fiscal year ending December 31, 2000. In connection with this sale, the company issued 3,674 purchase warrants to Swartz at an initial exercise price of $3.575 per share. The company has sold an additional 39,915 shares receiving proceeds in the aggregate amount of $158,911.59 through February 2001. In connection with these sales, the company issued 3,992 purchase warrants to Swartz at an average initial exercise price of $4.8125 per share.

               Also registered on the Form SB-2 were 354,000 common shares on behalf of certain consultants under a piggyback registration, which will allow these consultants to exercise options for common stock at $5.00 per share. If all these options are exercised, $1,770,000 will be provided to the Company. No options were exercised during fiscal year 2000.

(b)     Market Information

               Effective September 23, 1998, the Company's $.01 par value common stock, as a class, was registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. As a result, shares of the Company's common stock which had been owned for one year or more became eligible for trading of the over-the-counter bulletin board maintained by the National Association of Securities Dealers, Inc. on December 22, 1998. The Company's stock began trading on January 21, 1999 at $12.00 per share. The Company has approximately 10 market makers for its common stock.

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               The following table presents the range of high and low bid prices for the Company's $.01 par value common stock for each quarter during its last two fiscal years. The source of the high and low bid information is the Over-the-Counter Bulletin Board. The market represented by the OTC Bulletin Board is extremely limited and the price for our common stock quoted on the OTC Bulletin Board is not necessarily a reliable indication of the value of our common stock. Quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

1999	High	Low
1st Quarter	$12.25	$4.75
2nd Quarter	$10.50	$3.50
3rd Quarter	$ 9.94	$5.12
4th Quarter	$ 8.50	$4.13
2000	High	Low
1st Quarter	$ 7.12	$3.37
2nd Quarter	$ 4.87	$2.06
3rd Quarter	$10.00	$2.50
4th Quarter	$ 5.25	$2.50

(c)     Holders

               As of December 31, 2000, the Company had 230 shareholders of record.

(d)     Dividend Policy on Common Stock

               The Company has not paid any dividends to its shareholders since its inception. The declaration or payment of dividends, if any, to its shareholders is within the discretion of the Board of Directors of the Company and will depend upon the Company's earnings, capital requirements, financial condition and other relevant factors. The Board of Directors does not currently intend to declare or pay any dividends on its common stock in the foreseeable future and intends to retain any earnings to finance the growth of the Company.

(e)     Preferred Stock

               On August 30, 2000, the Company filed an Amendment to its Certificate of Incorporation to increase its authorized shares to 140,000,000 and to divide such authorized shares into 100,000,000 shares of $.01 par value preferred stock and 40,000,000 shares of $.01 par value common stock. The Company did not issue any preferred stock in fiscal 2000.

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(f)     Reports to Shareholders

               The Company intends to furnish its shareholders with annual reports containing audited financial statements and such other periodic reports as the Company may determine to be appropriate or as may be required by law. The Company is required to comply with periodic reporting, proxy solicitation and certain other requirements of the Securities Exchange Act of 1934.

(g)     Transfer Agent and Registrar

               Continental Stock Transfer & Trust Company has been appointed as the Company's Transfer Agent and Registrar for its Common Stock.

Item 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

               The company's overall business strategy relating to its automotive inventions is:

   o to manufacture, market and sell, either directly, through others or jointly, the FTVÔ to domestic and foreign customers, especially in the Asian, African, South and Central American markets; and

   o to manufacture, market and sell, either directly, through others or jointly, its hydraulic pump and motor, its constant velocity joint and its infinitely variable transmission to automotive and truck manufacturers, suppliers and component parts assemblers.

               The company's plan of operation relative to its automotive inventions over the next 12 months is:

   o to complete the infinitely variable transmission prototype;

   o to install the infinitely variable transmission into a company
owned vehicle and begin testing to document actual emission
levels and fuel economy;

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   o to initiate discussions with national and state environmental
agencies in the United States and other countries to quantify
exact fuel savings and emissions levels and to determine
the potential effect of the infinitely variable transmission on
the worldwide problem of diesel engine pollutants;

   o to install the constant velocity joint, including its spherical
gearing, into a company owned vehicle and to test and
evaluate its actual operation;

   o to incorporate all of the company's completed prototypes
into the FTVÔ ;

   o continue negotiations with selected automotive and truck
manufacturers to generate a letter of intent with respect to
either a license, merger or joint partnership for the continued
development and testing of all of the company's prototypes,
their manufacture, their marketing and their worldwide sale;

   o to continue to improve the company's inventions and, where
appropriate, to obtain patent protection on such new improvements.

               The company has, as yet, not found a facility suitable for manufacturing commercial quantities
of the FTV itself. During the next 12 months, management will continue to attempt to locate a suitable
facility.

               In addition, the company continues to investigate the possibility of manufacturing the FTV itself. The company has investigated and is investigating potential sites in Rochester, New York and other communities. The company and has engaged in preliminary discussions with a number of financial institutions to formulate a financial package which, together with government based incentives, will enable the company to pursue this approach with the actual production of the vehicle. The company believes that it will need at least 12-15 million dollars initially in order to pursue this possibility. Management is presently investigating ways in which to acquire this amount of money including the proceeds from Swartz as well as additional equity and/or debt financing. However, no specific financial package with banks or other lenders has been negotiated to date. If a suitable facility is found in the next 12 months, management will reinstitute discussions to obtain financing to acquire, refurbish, modernize, equip and staff such a facility.

               On April 25, 2000, the Company inaugurated its website, www.torvec.com, for marketing, sales, education and information relating to the Company's inventions.

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               On June 29, 2000, the Company announced that it had granted an exclusive, world-wide license of all its automotive technology to Variable Gear, LLC for the aeronautical and marine markets. Variable Gear will pay the Company 4% royalties for 7 years after which the Company is obligated to repurchase the license. Variable Gear is owned 51% by Robert C. Horton, Chairman and CEO of Ultrafab, Inc. and a Company shareholder. The Company owns the remaining 49%. The Company does not share in any profit or losses in this entity. It has initiated discussions with a number of boat manufacturers, but to date Variable Gear has not commenced operations or sublicensed our automotive technology in its markets.

               The Company's overall business strategy relating to its ice technology is to

o to develop, in cooperation with Dr. Petrenko at Darthmouth
under his one year consulting agreement commercially viable
de-icing and ice adhesion systems for land-based motorized
vehicle applications;

o to enter into appropriate licensing/joint venture arrangements;

o to otherwise promote utilization of the Company's ice technology world-wide

               The Company's license agreement with Dartmouth provides for a royalty of 3.5% based on the value of net sales of licensed product with minimum annual payments of $10,000 for the first two years, $15,000 for the third year and $25,000 per year thereafter. In addition, the agreement provides for the payment of 50% of sub-license fee income. Based upon industry discussing the company anticipates that it will sublicensed, joint-venture or otherwise commercialize this technology within the next 12 months.

               The net loss for the year ended December 31, 2000 was $2,374,000 as compared to the year ended December 31, 1999 net loss of $4,788,000. The decrease in the net loss of $2,414,000 is principally related to a decrease in the amortization of unearned compensatory stock. The amortization, which is a non-cash item, amounted to $435,000 for the year ended December 31, 2000 compared to $3,050,000 for the year ended December 31, 1999.

               Research and development expenses for the year ended December 31, 2000 amounted to $731,000 as compared to $1,035,000 for the year ended December 31, 1999. This decrease amounted to $304,000 and is due to the decrease in expenses associated with the FasTrack.

               General and administrative expenses for the year ended December 31, 2000 amounted to $1,643,000 as compared to $3,753,000 for the year ended December 31, 1999. This decrease amounted to $2,110,000 and is due to a decrease in unearned compensatory stock previously discussed, offset by an increase in advertising and promotion of approximately $433,000 and an increase in legal and professional fees of $201,000 and a decrease of $164,000 relating to lease payments charged to operations in 1999 on termination of agreement.

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               During fiscal 1999, we spent approximately 65% of research and development expenses on building the FTV prototype, testing and upgrades. We spent approximately 12% of research and development expenses on the hydraulic pump and motor, 11% on the CV joint and 12% on the infinitely variable transmission. During fiscal 2000, we spent approximately 24% of research and development expenses on upgrades to the FTV prototype. We spent approximately 15% of research and development expenses on upgrading our steer drive, 25% of research and development expenses on the hydraulic pump and motor, 25% on the CV joint and 11% on the infinitely variable transmission.

Liquidity and Capital Resources

               The company's plan of operations during its fiscal year ended December 31, 2000 was partially funded through the sale of 144,321 shares to Robert C. Horton for aggregate proceeds of approximately $550,000. In addition, during fiscal year 2000, the company issued 196,259 shares to business consultants under its Business Consultant's Stock Plan in exchange for ongoing corporate legal services, internal crediting services and associated expenses incurred by our chief financial officer, expenses associated with our two lawsuits, marketing research expenses as well as legal fees and associated expenses for ongoing patent work.

               The company anticipates that the funding it will receive from Swartz as well as its continuing issuance of shares under its Business Consultant's Stock Plan will be adequate to fund its plan of operation during the next 12 months. However, the company also recognizes, based on its currently proposed plans and assumptions relating to its plan of operation (including assumptions regarding the nature and extent of its prototype development program, its testing program, the ability of the company to secure adequate manufacturing and distribution relationships and market acceptance of the company's products) that, over the next twelve months, the company may be required to seek additional financing in the form of a significant equity investment by one or more investors in privately-negotiated transactions or through debt-financing or both.

               If we were to need financing in addition to monies we raised from Swartz and we were not successful in obtaining it, we would be forced to cancel any attempt to manufacture and distribute our products ourselves. We would have to reduce and or delay expenditures, including research and development expenditures. We would also be forced to lengthen the timeframes within which we would be able to commercialize all our automotive technologies. We may also be forced to commercialize our technologies on terms which are less favorable than are presently being negotiated.

               The company's cash position at any time during fiscal 2000 was directly dependent upon its success in selling stock since the company generated no revenues from any other source. This trend is expected to continue throughout fiscal 2001.

                The company has an obligation to repurchase 51% of Variable Gear, LLC on January 1, 2008. The purchase price is equal to 51% of the then value of Variable Gear as determined by an independent appraiser selected by the parties. This liability can not be estimated at this time. We believe that a combination of cash flows from operations, financing and strategic alliances will produce sufficient cash flow to fund this obligation.

67

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Y2K Compliance

               The Company currently uses a software which management believes is in "Year 2000" (Y2K) compliance. Management will continue to evaluate the current software and implement any necessary changes to remain in "Year 2000" (Y2K) compliance.

Impact of Inflation

               Inflation has not had a significant impact on the company's operations to date and management is currently unable to determine the extent inflation may impact the company's operations during its fiscal year ending December 31, 2000.

Quarterly Fluctuations

               As of December 31, 2000, the Company had not engaged in significant revenue producing operations. Once the company actually commences significant revenue producing operations, the company's operating results may fluctuate significantly from period to period as a result of a variety of factors, including purchasing patterns of consumers, the length of the company's sales cycle to key customers and distributors, the timing of the introduction of new products and product enhancements by the company and its competitors, technological factors, variations in sales by product and distribution channel, product returns, and competitive pricing. Consequently, once the company actually commences significant revenue producing operations, the Company's product revenues may vary significantly by quarter and the company's operating results may experience significant fluctuations.

68

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TORVEC, INC.
(a development stage company)

FINANCIAL STATEMENTS

Contents

Independent auditors' report	F-2
Consolidated balance sheet as of December 31, 2000	F-3
Consolidated statements of operations for each of the years in the two-year      period ended December 31, 2000 and for the period from September 25, 1996      (inception) through December 31, 2000	F-4
Consolidated statements of changes in stockholders' equity for the period from      September 25, 1996 (inception) through December 31, 2000	F-5
Consolidated statements of cash flows for each of the years in the two-year period      ended December 31, 2000 and for the period from September 25, 1996      (inception) through December 31, 2000	F-6
Notes to financial statements	F-7

                                                                                                                                                 F-1

69

-27-

INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholders
Torvec, Inc.


We have audited the accompanying consolidated balance sheet of Torvec, Inc., (a development stage company) and its subsidiary, as of December 31, 2000, and the related consolidated statements of operations and cash flows for each of the years in the two-year period ended December 31, 2000 and for the period from September 25, 1996 (inception) through December 31, 2000 and changes in stockholders' equity for the period from September 25, 1996 (inception) through December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all material respects, the consolidated financial position of Torvec, Inc. and its subsidiary as of December 31, 2000 and the consolidated results of their operations and their consolidated cash flows for each of the years in the two-year period ended December 31, 2000 and for the period from September 25, 1996 (inception) through December 31, 2000 in conformity with generally accepted accounting principles in the United States of America.

As described in Note J[4], the principal stockholders are involved in an arbitration proceeding relating to certain technology which they contributed to the Company at its formation.

/S/ RICHARD A. EISNER & COMPANY, LLP

Richard A. Eisner & Company, LLP

New York, New York
March 7, 2001


With respect to Note K

May 2, 2001

                                                                                                                                                     F-2

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-28-

TORVEC, INC.
(a development stage company)

Consolidated Balance Sheet
December 31, 2000

ASSETS Current assets:    Cash    Stock Subscription receivable (collected in January 2001)    Prepaid expenses      Total current assets	$      34,000       109,000        147,000        290,000
Equipment:    Office equipment    Transportation equipment Less accumulated depreciation Net equipment License, less accumulated amortization of $15,000	9,000             53,000        62,000        (36,000)           26,000     3,246,000 $  3,562,000
LIABILITIES Current liabilities:    Current portion of loan payable    Accounts payable and accrued expenses    Consulting fees payable to related parties       Total current liabilities Deferred revenue Loan payable Commitments, contingency and other matter STOCKHOLDERS' EQUITY Preferred stock, $.01 par value, 100,000,000 shares authorized, none issued Common stock, $.01 par value, 40,000,000 shares authorized, 22,552,062    issued and outstanding (including 63,256 shares issued subject to put option) Additional paid-in capital Deficit accumulated during the development stage	$       6,000        77,000       665,000       748,000       150,000            9,000       907,000        225,000    13,125,000  (10,695,000)     2,655,000 $   3,562,000

See independent auditors' report and notes to financial statements                                          F-3

71

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TORVEC, INC.
(a development stage company)

Statements of Operations

	Year Ended                        December 31,                       2000                            1999       (consolidated)		September 25, 1996 (Inception) Through December 31,          2000
Cost and expenses:    Research and development    General and administrative Net loss Basic and diluted loss per common share Weighted average number of    shares of common stock - basic    and diluted	$      731,000      1,643,000 $  (2,374,000)        $(0.11)    21,322,000	$  1,035,000     3,753,000 $ (4,788,000)      $(0.23)   20,918,000	$    3,044,000          7,651,000    $(10,695,000)

See independent auditors' report and notes to financial statements                                                    F-4

72

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TORVEC, INC.
(a development stage company)

Consolidated Statements of Changes in Stockholders' Equity

	Common Stock     Shares         Amount		Additional Paid-in      Capital	Unearned Compensatory Stock and      Options	Deficit Accumulated During the Development       Stage	Total Stockholders'      Equity
Issuance of shares to founders (Note A) Issuance of stock for services (Note A) Sale of common stock - November ($1.50 per share) Sale of common stock - December ($1.50 per share) Distribution to founders (Note A) Net loss Balance - December 31, 1996 Issuance of compensatory stock (Note I[2]) Issuance of stock for services (Note I[6]) Sale of common stock - January ($1.50 per share) Sale of common stock - February ($1.50 per share) Sale of common stock - May ($1.50 per share) Issuance of stock for services (Note I[6]) Sale of common stock - June ($3.00 per share) Sale of common stock - July ($3.00 per share) Sale of common stock - August ($3.00 per share) Sale of common stock - September ($3.00 per share) Sale of common stock - October ($3.00 per share) Sale of common stock - November ($3.00 per share) Sale of common stock - December ($3.00 per share) Issuance of compensatory options to consultants (Note I[4]) Compensatory stock and options earned Distributions to founders (Note A) Net loss Balance - December 31, 1997 Issuance of stock for services (Note I[6]) Sale of common stock - May 11 to September 20 ($5.00 per share) Sale of common stock - September 21 to December 31 ($10.00 per share) Costs of offering Compensatory stock and options earned Contribution of services (Note E[2]) Net loss Balance - December 31, 1998 Issuance of stock for services (Note I[5]) Sale of common stock - January 1 to August 9 ($10.00 per share) Sale of common stock - August 10 to November 30 ($5.00 per share) Issuance of compensatory options to consultants (Note I[2]) Common stock issued- exercise of options (Note I[2]) Compensatory stock and options earned Contribution of services (Note E[2]) Net loss Balance - December 31, 1999 Issuance of stock for services (Note I[5]) Sale of common stock - March 29 ($4.51 per share) Sale of common stock - June 23 ($3.50 per share) Acquisition of Ice Surface Development (Note B) Proceeds from exercise of put option Compensatory stock and options earned Contribution of services (Note E[2]) Net loss Balance - December 31, 2000	16,464,400     2,535,600        64,600       156,201                      19,220,801    1,000,000        12,000        58,266        75,361        30,000          2,000        73,166        13,335        60,567        10,000         7,000        10,000       100,000                      20,672,496          1,000       112,620        25,500                      20,811,616        45,351        80,670        84,500        21,000                      21,043,137       196,259        44,321       100,000     1,068,354        36,735                      22,488,806	$ 165,000     25,000       1,000       1,000                    192,000     10,000      1,000      1,000      1,000       1,000       1,000                    207,000       1,000                    208,000      1,000      1,000                    210,000       2,000       1,000     11,000      1,000                  $ 225,000	$    (165,000)        381,000          96,000        233,000        (27,000)                          518,000      1,490,000          18,000         86,000        112,000          45,000           6,000        219,000          40,000        181,000          30,000          21,000         30,000        299,000        234,000      (338,000)                        2,991,000           3,000        562,000        255,000        (60,000)          15,000                        3,766,000        327,000        806,000        422,000      2,780,000        105,000          15,000                        8,221,000        838,000        200,000        349,000      3,394,000        108,000          15,000                      $ 13,125,000	$   (1,500,000)        (234,000)          451,000                          (1,283,000)          578,000                            (705,000)      (2,780,000)        3,050,000                            (435,000)                      435,000                     $               0	$     (489,000)        (489,000)        (922,000)      (1,411,000)      (2,122,000)      (3,533,000)      (4,788,000)      (8,321,000)      (2,374,000) $  (10,695,000)	$              0        406,000         97,000        234,000        (27,000)      (489,000)        221,000                0          18,000          87,000        113,000          45,000           6,000        220,000          40,000        182,000          30,000          21,000          30,000        300,000                0        451,000      (338,000)      (922,000)       504,000           3,000        563,000        255,000        (60,000)        578,000          15,000    (2,122,000)      (264,000)        327,000        807,000        423,000                0        105,000      3,050,000          15,000    (4,788,000)      (325,000)        840,000        200,000        350,000      3,405,000        109,000        435,000         15,000    (2,374,000) $    2,655,000

See independent auditors' report and notes to financial statements                                                                                                                                                                                                                   F-5

73

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TORVEC, INC.
(a development stage company)

Consolidated Statements of Cash Flows

	Year Ended                         December 31,                                 2000                            1999       (consolidated)		September 25, 1996 (Inception) Through December 31,        2000
Cash flows from operating activities:           Net loss           Adjustments to reconcile net loss to net cash used in                     operating activities:                               Depreciation and amortization                               Common stock issued for services                               Contribution of services                               Compensation expense attributable to                                         common stock and options                               Changes in:                                         Other assets                                         Prepaid expenses                                         Deferred revenue                                         Accounts payable and accrued expenses                                                   Net cash used in operating activities	$ (2,374,000)          27,000         840,000          15,000         435,000 13,000 150,000        217,000      (677,000)	$ (4,788,000)           12,000          327,000         15,000        3,050,000 164,000       (38,000)   (1,258,000)	$   (10,695,000)           51,000       1,577,000           69,000       4,513,000 13,000 150,000        742,000   (3,580,000)
Cash flows from investing activities:           Purchase of equipment           Cost of acquisition                                                   Net cash used in investing activities	16,000        16,000		(62,000)       (16,000)       (78,000)
Cash flows from financing activities:           Net proceeds from sales of common stock and expense of options           Proceeds from loan           Repayments of loan           Distributions                                                   Net cash provided by financing activities Net increase (decrease) in cash Cash at beginning of period Cash at end of period	550,000 (6,000) __________        544,000                   (149,000)        183,000 $       34,000	1,416,000         (5,000)                       1,411,000 153,000         30,000 $      183,000	4,042,000           29,000           (14,000)      (365,000)     3,692,000 34,000 __________ $        34,000
Supplemental disclosure of noncash investing and financing activities:            Issuance of compensatory options to consultants            Issuance of common stock for license           Cash paid for interest	$   3,405,000 $        2,000	$   2,780,000 $        2,000

See independent auditors' report and notes to financial statements                                            F-6

74

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note A - The Company

Torvec, Inc. (the "Company") was incorporated in New York on September 25, 1996. The Company, which is in the development stage, specializes in automotive technology. In September 1996, the Company acquired numerous patents, inventions and know-how (the "technology") contributed by Vernon E. Gleasman and members of his family (the "Gleasmans") (see Note J[4]). The Company intends to develop and design specific applications for this technology relating to steering drives for tracked vehicles, infinitely variable transmissions, hydraulic pumps and motors and constant velocity joints and spherical gearings. As consideration for this contributed technology, the Company issued 16,464,400 shares of common stock and $365,000 to the Gleasmans. In September 1996, the Company issued 2,535,600 shares of common stock (valued at $406,000) to individuals as consideration for the cost of services and facilities provided in assisting with the development of this technology.

For the period from inception through December 31, 2000, the Company has accumulated a deficit of $10,684,000, and at December 31, 2000 has a working capital deficiency of $479,000 and has been dependent upon equity financing to meet its obligations and sustain operations. The Company is in the development stage and its efforts have been principally devoted to research and development, raising capital and marketing of principal products. Substantial additional financing will be required by the Company to fund its activities (see Note I[7]).

Note B - acquisition of license

On November 29, 2000, the Company entered into an Agreement and Plan of Merger to acquire Ice Surface Development, Inc ("Ice") (incorporated on May 2, 2000) for 1,068,354 shares of common stock. The acquisition was accounted for under the purchase method. The fair value of the common stock issued of approximately $3,405,000 was allocated as follows:

Prepaid expenses
    Sponsored research
    Consulting agreement
License (Note D)

Consideration (including costs of $16,000)
$    140,000
        20,000
    3,261,000

  $ 3,421,000

The results of operations of Ice prior to acquisition were de minimis.

Note C - summary of significant accounting policies

[1]	Consolidation: The financial statements include the accounts of the Company and its wholly-owned subsidiary, Ice, as at December 31, 2000 and from the date of its acquisition through December 31, 2000. All material intercompany transactions and account balances have been eliminated in consolidation.
[2]	Equipment: Equipment, including a vehicle intended to be used as a prototype, is stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets which range from five to seven years.

                                                                                                                                             F-7

75

-33-

TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note C - summary of significant accounting policies (continued)

[3] Research and development and patents:

Research and development costs and patent expenses are charged to operations as incurred.

[4]	License: The license is being amortized over its remaining life of approximately 19 years which correlates to an underlying patent.
[5]	Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
[6]	Loss per common share: Statement of Financial Accounting Standards No. 128, "Earnings Per Share," requires the presentation of basic earnings per share, which is based on common stock outstanding, and dilutive earnings per share, which gives effect to options, warrants and convertible securities in periods when they are dilutive. The number of potentially dilutive securities excluded from the computation of diluted loss per share were approximately 1,898,000 and 934,000 for the years ended December 31, 2000 and 1999.
[7]	Fair value of financial instruments: The carrying value of cash, accounts payable and accrued expenses approximates their fair value due to the short maturity of those instruments.
[8]	Stock-based compensation: Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"), encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has elected to account for its employee stock-based compensation plans using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). Under the provisions of APB No. 25, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's common stock at the date of the grant over the amount an employee must pay to acquire the stock. Stock options granted to nonemployees for goods or services are measured using the fair value of these options and such costs are included in operating results as an expense.

F-8

76

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note C - summary of significant accounting policies (continued)

[9]	Revenue Recognition: Revenue in connection with the granting of a license (Note J[3]) is to be recognized when all conditions specified under recent accounting standards have be met. Generally, revenue is recorded only when no future performance is required related to item.
[10]	Impairment of Long-Lived Assets: The company has adopted Statement of Financial Accounting Standards No. 121, "Impairment of Long-Lived Assets to be Disposed of." Accordingly, whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable, management assesses the recoverability of the assets.

Note D - LICENSE FROM THE TRUSTEES OF DARTMOUTH COLLEGE

On November 28, 2000, Ice entered into a 20 year exclusive license with the Trustees of Dartmouth College for land-based applications to a novel ice adhesion modification system developed by Dr. Petrenko at Dartmouth Thayer School of Engineering for $25,000. The license agreement provides for the payment of $140,000 for sponsored research and a royalty of 3.5% based on the value of net sales of licensed product with minimum annual payments of $10,000 for the first two years, $15,000 for the third year and $25,000 per year thereafter. In addition, the agreement provides for the payment of 50% of sub-license fee income.

Dr. Petrenko also entered into a one year consulting agreement with Ice for a minimum of $20,000.

Note E - Related Party Transactions

[1]
On December 1, 1997, the Company entered into three-year consulting agreements with three members of the Gleasman family (major stockholders and directors) whereby each will provide technical services to the Company in exchange for compensation of $12,500 each per month. In addition, the Company granted them options to purchase a total of 75,000 shares of common stock at an exercise price of $5.00 per share (Note I[2]). For the years ended December 31, 2000, 1999, 1998 and 1997, the Company incurred expenses amounting to approximately $522,000, $528,000, $528,000 and $45,000, respectively, in connection with these agreements. Effective December 1, 2000, the agreement was extended for three years and amended to provide for the payment of prior and future compensation at the discretion of the Board of Directors in either cash or shares of common stock or combination of both. Prior to these agreements, one member of the Gleasman family provided consulting services to the Company. Amounts charged to operations for the year ended December 31, 1997 and for the period ended December 31, 1996 were approximately $55,000 and $18,000, respectively.

77

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note E - Related Party Transactions (Continued)

[2]	During the three years ended December 31, 2000 a stockholder provided space and services to the Company at no charge. The fair value of such space and services amount to $15,000 in each year and was treated as a capital contribution and expensed.
[3]	During the years ended December 31, 2000 and 1999 the Company issued to a director 2,882 and 6,231 shares of common stock, respectively, under the business consultants stock plan (Note I[5]) for services rendered as patent counsel.

Note F - Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

At December 31, 2000, the Company has available $3,661,000 of net operating loss carryforwards to offset future taxable income tax expiring through 2020.

At December 31, 2000, the Company has a deferred tax asset of approximately $1,438,000 representing the benefits of its net operating loss carryforward and a deferred tax asset of $2,524,000 from temporary differences, principally stock options not currently deductible and certain operating expenses which have been capitalized as start-up costs for federal income tax purposes. The total of these deferred tax assets has been fully reserved by a valuation allowance since realization of their benefit is uncertain.

F-9

78

-36-

TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000


Note F - Income Taxes (continued)

A reconciliation between the actual income tax benefit and income taxes computed by applying the federal income tax rate of 34% to the net loss is as follows:

	Year Ended
	December 31,
	2000	1999
Computed federal income tax benefit at 34% rate	$           (807,000)	$             (1,627,000)
State tax benefit, net of federal tax benefit	(125,000)	(253,000)
Nondeductible expenses	33,000	202,000
Valuation allowance	899,000	1,678,000
	$                     0	$                        0

Note G - Accounts Payable and Accrued Expenses

At December 31, 2000, accounts payable and accrued expenses consist of the following:

Professional fees	$          23,000
Trade payables	54,000
	$         77,000

Note H - Loan Payable

During 1998, the Company purchased a vehicle that is intended to be used as a prototype. The vehicle is collateral for the loan. The loan is payable in monthly installments of principal and interest (at 10.13% per annum) of approximately $610 through March 2003.

                                                                                                                                                          F-10

79

-37-

TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 1999

Note H - Loan Payable (continued)

At December 31, 2000 the net book value of the prototype vehicle was approximately $21,000.

Total future principal payments under the loan are as follows:

2001
2002
2003 $     6,000
      7,000
      2,000

$   15,000

Note I - Stockholders' Equity

[1]	Private placement: On May 11, 1998 the Company initiated a private placement of its common stock at $5.00 per share. On September 21, 1998 the Company increased the offering price to $10.00 per share. The Company received net proceeds of $550,000, $1,230,000 (of which $507,000 was received from the Gleasman family), $758,000, $1,068,000 and $331,000 from private placements for the years ended December 31, 2000, 1999, 1998 and 1997 and for the period ended December 31, 1996, respectively.
[2]	Consultant: In February 1997, the Company entered into a three-year agreement with a consultant (the "Consultant") whereby the Consultant will provide financial consulting services and assistance in obtaining financing as well as other services. In consideration thereof, employees of the Consultant received an aggregate of 1,000,000 shares of common stock for $50. The Company valued the shares of common stock at $1.50 per share. In April 1997, the Company granted an aggregate of 500,000 warrants to five employees of the Consultant. The warrants are exercisable into common stock at the initial public offering (the "IPO") price and are exercisable for five years from the date the Company's IPO is declared effective ("warrant term"). However, if fifty percent or more of either the Company's assets or its common stock is acquired by another entity or group during the warrant term, the exercise price shall be $1.50. The Company will record a charge to operations representing the fair value of the warrants when the IPO is declared effective. On February 10, 1999, the Company entered into a one-year agreement with two consultants to provide financial and public relation services. In connection therewith, 375,000 of previously granted warrants were cancelled and the Company granted 375,000 options at an exercise price of $5.00 exercisable immediately through February 10, 2004. The Company valued these options at $2,780,000 using the Black-Scholes Option pricing model with the following weighted average assumptions for the year ended December 31, 1999: risk free interest rate of 5%, dividend yield 0%, volatility 40% and expected life for options granted of 5 years. These options will be charged to operations over the term of the consulting agreement. In February 1999, 21,000 of such options were exercised.
	F-11

80

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note I - Stockholders' Equity (continued)

[3]

Authorized shares: In August 2000, the Board of Directors amended the certificate of incorporation to authorize 100,000,000 shares of preferred stock and 40,000,000 shares of common stock.

[4]

Stock option plan: In December 1997, the Board of Directors of the Company approved a Stock Option Plan (the "Plan") which provides for the granting of up to 2,000,000 shares of common stock, pursuant to which officers, directors, key employees and key consultants/advisors are eligible to receive incentive, nonstatutory or reload stock options. Options granted under the plan are exercisable for a period of up to 10 years from date of grant at an exercise price which is not less than the fair value on date of grant, except that the exercise period of options granted to a stockholder owning more than 10% of the outstanding capital stock may not exceed five years and their exercise price may not be less than 110% of the fair value of the common stock at date of grant. Options generally vest over five years. In connection with certain consulting agreements (see Note E[1]), the Company granted an aggregate of 75,000 nonqualified options to purchase common stock under the plan at an exercise price of 0$5.00 per share. The options vest 20% per annum and are exercisable through November 30, 2007. The Company valued these options at $234,000 using the Black-Scholes option-pricing model with the following weighted average assumptions for the year ended December 31, 1997: risk-free interest rate of 5.91%, dividend yield 0%, volatility 40% and expected life for options granted of 10 years. The options are being amortized over the term of the consulting agreements. On January 1, 1998 the Company granted 380,000 options under the plan at an exercise price of $5.00 per share to officers and directors. The options are exercisable for a period of ten years and vest 20% per annum. Pro forma information regarding net loss and net loss per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that statement. The weighted fair value of options granted during the year ended December 31, 1998 is estimated to be $.47. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 5.75%, dividend yield 0%, volatility of .40% and expected life of 10 years. Had compensation cost for the Company's stock options been determined base upon the fair value at the grant date for awards under the plan consistent with the methodology prescribed under SFAS No. 123, the Company's pro forma net loss and pro forma net loss per share would be as follows:

	Year Ended December 31,
	2000	1999
Pro forma net loss Pro forma basic and diluted net loss per share	$2,486,000 $<0.12>	$4,900.000 $<0.23>

                                                                                                                                                    F-12

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note I - Stockholders' Equity (continued)

[4]	Stock option plan (Continued): At December 31, 2000, 455,000 options were outstanding with a weighted average exercise price of $5.00 per share and the weighted average remaining life was 7 years. At December 31, 2000, 273,000 options were exercisable with a weighted average exercise price of $ 5.00 per share. At December 31, 2000, 1,545,000 options were available under the plan.
[5]	Business consultant stock plan: In June 1999, the Company adopted the Business Consultant Stock Plan, as amended (the "Stock Plan"). The plan provides for up to 400,000 shares of common stock to be issued from time to time to consultants in exchange for services. For the years ended December 31, 2000 and 1999, 196,259 and 45,351 shares were issued, respectively, to consultants and third parties in exchange for services and amounts owed to them. During the years ended December 31, 2000 and 1999 the Company charged $840,000 and $327,000, respectively, to operations in connection with the share issuances.
[6]	Noncash transaction: During 1998, the Company granted 1,000 shares of common stock, valued at $3.00 per share, for services provided. During 1997, the Company granted 12,000 and 2,000 shares of common stock for services provided. The Company valued the shares at their fair value of $1.50 and $3.00 per share, respectively.
[7]	Equity funding commitment: On September 5, 2000, the Company entered into an agreement with Swartz Private Equity, LLC ("Swartz") pursuant to which Swartz granted to the Company a $50,000,000 equity funding commitment which continues for a period of thirty-six months. The agreement provides that from time to time, at the Company's request, Swartz will purchase from the Company that number of the Company's common shares equal to 15% of the number of shares traded in the market in the 20 business days after the date of the requested purchase. The purchase price per share will be the lesser of, 91% of the average market price per share during that 20 day period or that market price minus $0.20. Swartz will not be required to purchase at any one time shares having a value in excess of $2,000,000. If the Company is in need of funds, the Company may make additional requests at intervals of approximately 30 days. As a commitment fee, the Company granted to Swartz commitment warrants to purchase 960,101 shares of the Company's common stock which warrants can be exercised at $4.875 per share through August 15, 2005. The total number of commitment warrants is subject to antidilution provisions. The warrant exercise price is reset to the lowest closing price of the Company's common stock during the five trading days ending on each six month anniversary of warrant issue date.

                                                                                                                                                    F-13

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note I - Stockholders' Equity (continued)

[7] Equity funding commitment (Continued):
In addition to the commitment warrants referred to above, Swartz will be issued a warrant to purchase one share of common stock of the Company for every ten shares that it purchases pursuant to the agreement. These purchase warrants will initially be exercisable at 110% of the market price of the shares simultaneously purchased by Swartz, subject to the same reset provisions as govern the commitment warrants. In connection therewith the Company has reserved 367,263 shares of common stock. At December 31, 2000 Swartz has been granted an option to purchase 3,674 shares of common stock at $3.575 per share exercisable through January 8, 2006. Swartz has been granted a right of first refusal to handle future financings for the Company. However, that right continues only during the period of the commitment and the commitment can be terminated at any time upon paying a termination fee to Swartz. The termination fee is a maximum of $200,000 and may be less dependent upon the amount of financing which has been provided by Swartz prior to the termination. The Company has agreed to reserve 5,000,000 common shares for sale pursuant to this agreement. As of December 31, 2000, 100,000 shares of common stock had been issued under the agreement of which 36,735 were exercised under the put option. The Company sold an additional 39,915 shares in February, 2001, receiving proceeds in the amount of $158,911.59. In connection with this sale, the Company issued 3,992 purchase warrants to Swartz at an initial exercise price of $4.8125 per share.

Note J - COMMITMENTS, CONTINGENCY AND OTHER MATTER

[1]

Lease: In January 1998 the company entered into an agreement with a stockholder/landlord, as amended to be effective upon the completion of the Company's private placement, to lease land and a building for one year at $52,500 per month. The agreement also provided for the right to purchase of land adjacent to the leased premises for one year after the effective date of the lease for $350,000. The company paid approximately $164,000 representing the first month's rent and rent deposits. On August 31, 1999, the Company and the stockholder terminated the lease agreement. The termination noted that the first and last monthly payments previously paid by the company constitute the total payment required to be made. As a result, the $164,000 was charged to operations during 1999.

[2]

Employment agreements: The company has entered into three employment agreements with stockholders for a period of three years, commencing on the first day of the month in which the company receives the proceeds from an IPO. Two agreements each provide for salaries of $150,000 per year. The third agreement provides for a salary of $240,000 in the first year, $252,000 in the second year and $264,000 in the third year and provides for a minimum bonus of $15,000 per quarter for the duration of the agreement.

                                                                                                                                                    F-14

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note J - COMMITMENTS, CONTINGENCY AND OTHER MATTER (continued)

[3]	Variable Gear, LLC: In June 2000, the company sold 100,000 shares of common stock to a stockholder for $5.00 per share and granted an exclusive world-wide license of all its technology to Variable Gear, LLC ("Variable Gear") (an entity owned 51% by the stockholder) for the aeronautical and marine markets. Variable Gear is to pay the company a royalty of 4% of the gross selling price of products incorporating the technology and 49% of compensation received with respect to sublicense income through January 1, 2008. The company owns the remaining 49% of Variable Gear. The company does not share in any profit or losses in this entity. On January 1, 2008, the Company is required to purchase the membership interest of the stockholder at the then fair market value as defined. At December 31, 2000 such fair value cannot yet be reasonably estimated. The market price of the company's stock at the date of the transaction was $3.50. Accordingly, $1.50 per share has been allocated to the license agreement and included in deferred revenue.
[4]	Arbitration: During 1997 certain members of the Gleasman family were named in a lawsuit seeking monetary damages relating to the development of certain technology and related matters. The court stayed all aspects of the litigation and directed that the parties arbitrate such matters in dispute. The arbitration proceedings were conducted during 1998 and a decision on this matter was rendered in April 1999. The arbitrator issued a nonappealable decision which determined that the Gleasmans exclusively owned all the patents and the patents are exclusive patents of the Company. The arbitrator's decision also awarded the sum of $863,000 to be paid to McElroy Manufacturing, Inc. ("McElroy") by the Gleasmans out of royalties which they may receive and awarded McElroy a 20% interest in all royalties and other sums received by the Gleasmans. The company was not a party to the arbitration. In June 1999, McElroy filed an amended complaint in the United States District Court for the Northern District of Oklahoma seeking correction of the inventorship of the subject patents and that the Gleasmans immediately reimburse McElroy for its expense in the amount of $863,000 plus interest. In addition McElroy has demanded that the company pay out of proceeds generated by sale of its stock the sums demanded of the Gleasmans. In March 2000, the Court remanded the case to the arbitrator to clarify certain ambiguities regarding the payment and terms of the April 1999 decision. In July 2000, the arbitrator issued an "Addendum and clarification Memorandum" awarding $360,000 to McElroy in partial reimbursement of its expenses. This amount is to be paid by Vernon and Keith Gleasman, not the company. Vernon and Keith Gleasman made an application to the arbitrator to vacate so much of the addendum which related to the payment of $360,000 to McElroy and, if the application to vacate was not granted, to reopen the hearing before the arbitrator to allow Vernon and Keith Gleasman to introduce additional evidence regarding their expenses. In September 2000, the arbitrator found that Vernon and Keith Gleasman's contentions to reopen the hearing were without merit and therefore denied in all respects Vernon and Keith Gleasman's application to vacate so much of the addendum as it relates to the payment of $360,000 or, in the alternative, to reopen the hearing to allow them to introduce additional evidence regarding their expenses.
	F-15

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TORVEC, INC.
(a development stage company)

Notes to Financial Statements
December 31, 2000

Note J - COMMITMENTS, CONTINGENCY AND OTHER MATTER (continued)

[4] Arbitration: (continued)

In rendering its decision, the arbitrator stated that the existence of the company has nothing to do with the lawsuit or the arbitration and that the Gleasmans have certain obligations to McElroy, and McElroy to the Gleasmans.
Management of the company believes that certain demands made by McElroy upon the company constitute a complete misreading of the arbitrator's decision and are without merit since the contract was between the Gleasmans and McElroy, the company did not participate in the arbitration proceedings and that the arbitrator's decision did not direct payment of any sums from the Company to McElroy.
Should the company's position not prevail, it would have an adverse effect on the company's financial position and results of operations. No provision for such contingency has been made in the financial statements. Presently, such loss cannot be reasonably estimated.

Note K - Retroactive Adjustment

In the second half of fiscal year 2000 the company previously reported revenues from a world-wide license to Variable Gear, LLC, which it is changing, based upon accounting guidance derived from SEC Staff Accounting Bulletin 101. Accordingly, deferred revenue and deficit accumulated during the development stage has been increased by $11,000 at December 31, 2000. There was no change reported per share data.













                                                                                                                                                    F-16

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Item 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

               None

PART III

Item 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

(a)     Identification of Directors, Executive Officers And Consultants

               The following table sets forth certain information about the current directors, executive officers of the Company and its consultants.

Name	Age	Position	Date of    Election or Designation	Date of Termination or   Resignation
Herbert H. Dobbs 448 West Maryknoll Road Rochester Hills, MI 48309 Keith E. Gleasman 11 Pond View Drive Pittsford, NY 14534 Lee E. Sawyer 16 Williamsburg Lane Rolling Hills, CA 90274 Morton A. Polster c/o Eugene Stephens & Associates 56 Windsor Street Rochester, NY 14605 James A. Gleasman 11 Pond View Drive Pittsford, NY 14534 Vernon E. Gleasman 11 Pond View Drive Pittsford, NY 14534 Samuel M. Bronsky 6653 Main Street Williamsville, NY 14221	69 53 59 73 60 89 39	Chairman of the Board of Directors Director; President and Consultant to Torvec, Inc. Director Director; Secretary of Torvec, Inc. Director; Consultant to Torvec, Inc. Consultant to Torvec, Inc. Chief Financial Officer	02/20/98     09/26/96     09/27/96     09/27/96     02/20/98     12/01/97     04/01/98	*           *           *           *           *           *           *

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*Changes in Control

     To the knowledge of the Company's management, there are no present arrangements or pledges of the Company's common stock which may result in a change of control of the Company. The members of the Board of Directors shall serve until the next annual meeting of shareholders and until their successors are elected or appointed and shall have qualified, or until their prior resignation or termination.

(b)     Business Experience

          1.          Dr. Herbert H. Dobbs - Chairman of the Board of Directors

Dr. Dobbs, Ph.D., P.E., has worked at every level from design engineer to technical director of an Army Major Commodity Command at the two-star level. He has worked as a hands-on engineer and scientist in industry and government, commanded field units, managed Army R & D programs and laboratories and currently has his own practice as a consultant engineer. He has the broad background needed to guide the Company's growth and development.

	During his career he has:
o	Worked as a manufacturing engineer.
o	Worked as a design engineer in the aircraft and missile industry.
o	Managed Army laboratories as a captain, lieutenant colonel and colonel.
o	Organized, implemented and operated the theater-wide "Red Ball Express" quick response supply system in Vietnam to get disabled weapons and other critical equipment repaired and back into combat as rapidly as possible.
o	Done basic research on multi-phase turbulent fluid dynamics supporting development of the gas turbine primary power system now used in the M1 Abrams Main Battle Tank (MBT).
o	Managed advanced development of the laser guided 155mm-artillery shell now known as the "Copperhead".
o	Served in Taiwan as a member of the U.S. Military Assistance Advisory Group (MAAG) working with the Republic of China Army General Staff.
o	Served as liaison officer between the Army and Air Force for development of the laser seeker for the Hellfire missile.
o	Guided development of a new family of tactical vehicles for the Army, including the High Mobility Multipurpose Wheeled Vehicle (HMMWV) now known as the "Hummer", which uses Vernon Gleasman's Torsen® differential.

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o Served as Technical Director of U.S. Army Tank-Automotive Command* (TACOM), which then employed some 6,400 people and is responsible for all support of U.S. military ground vehicles (a fleet of 440,000) from development to ultimate disposal with a budget of nearly $10 billion a year. He was also responsible for negotiation and management of military automotive R&D agreements with the French and German Ministries of Defense.

* Now the U.S. Army Tank-Automotive and Armaments Command.

At the end of 1985, Herbert H. Dobbs left government service and started his own consulting practice and began working with the Gleasmans to develop and market Vernon Gleasman's inventions. Herbert H. Dobbs holds a Ph.D. in Mechanical Engineering from the University of Michigan and is a registered professional engineer in Michigan. He holds several patents of his own and, among many affiliations, is a member of SAE, ASME, NSPE, AAAS, Sigma XI, AUSA, NDIA and the U.S. Army Science Board. The last named organization is a small group of senior technical and managerial people chosen from industry and academia to provide direct advice to the Secretary of the Army, the Chief of Staff, and the Department of the Army concerning issues of policy, budgets, doctrine, organization, training and technology.

          2.          Keith E. Gleasman - Director; President and Consultant to Torvec, Inc.

Co-Inventor with Vernon E. Gleasman on all Torvec patents, Mr. Gleasman's strengths include his extensive marketing and sales executive experience, in addition to his design and development knowledge. His particular expertise has been in the area of defining and demonstrating the products to persons within all levels of the automotive industry, race crew members, educators and students.

o As Vice President of Sales for Gleason Corporation (Power Systems Division), designed and conducted seminars on vehicle driveline systems for engineers at the U.S. army tank automotive command.

o Designed a complete nationwide after-market program for the Torsenâ Differential, which included trade show participation for the largest after-market shows in the U.S., SCORE and SEMA.

o Extensive after-market experience including pricing, distribution, sales catalogs, promotions, trade show booths designs and vehicle sponsorships.

o Responsible for over 300 articles in trade magazines highlighting the Torsen Differential (e.g., Popular Science, Auto Week, Motor Trend, Off-Road, and Four Wheeler).

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o Designed FTV prototype (from concept to assembly).

o Assisted in developing engineering and manufacturing procedures for the Torsen Differential and for all of the Torvec prototypes.

o Instructed race teams on use of the Torsen Differential (Indy cars, Formula 1, SCCA Trans-Am, IMSA, GTO, GTU, GT-1, NASCAR, truck pullers and off-road racers).

o Has been trained for up-to-date manufacturing techniques such as NWH, statistical process control and MRP II.

Mr. Gleasman has extensive technical and practical experience, covering all aspect of the Company's products such as, promotion, engineering and manufacturing.

           3.          Morton A. Polster - Director; Secretary of Torvec, Inc.

Partner in the intellectual property law firm of Eugene Stephens & Associates. Formerly, General Patent Counsel and, thereafter, Secretary and Corporate Counsel for Gleason Corporation (1969 - 1989) and prior to that, Patent Counsel for Eastman Kodak Corporation (1960 - 1969). While with Gleason Corporation, Mr. Polster represented Gleason when the latter purchased the Gleasman's Triple D, Inc., and exclusive rights to the Gleasman patents relating to the design and manufacture of the Torsen differential. He was part of the management team overseeing the operation of the Gleason Power Systems Division, which was created to manufacture and sell the Torsen differential. Also, he represented Gleason when the latter sold its Power Systems Division and its rights to the Torsen Differential to Diesel Kiki, Ltd. of Japan (now Zexel Corporation). While in private practice, since 1989, Mr. Polster represented Zexel Torsen, Inc., (subsidiary of Zexel Corp.), which was created to manage the manufacture and sale of Torsen Differentials. Mr. Polster has been patent counsel to the Gleasmans since 1989 and has been in charge of the preparation and execution of their U.S. and international patent protection.

          4.          Lee E. Sawyer - Director

Over a 30-year career in the wholesale side of the automotive industry, Mr. Sawyer has worked for Ford in the technical training field and for Toyota in sales, marketing, motorsports and service. During the last ten years, he was part of the start-up teams that successfully launched Hyundai and Kia Motors America focusing on parts, service, quality assurance, fleet sales, public relations and consumer affairs policy, procedures and systems. During his career he has worked with these automakers as follows:

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Ford Motor Company:
o o	As Ford's first field service engineer. Managed expanded Training Center with Ford, Lincoln-Mercury car and heavy truck classrooms, and taught Ford Shelby high performance curriculum.

Toyota Motor Sales USA:
o o o o	Established 12 service Training Centers. Computerized the national warranty system and established an expense control audit program. Managed sales, parts and service field force during a period in which sales increased 300% In 1979, introduced the Torsen® differential to Toyota Started Motorsports - hired factory race teams, coordinated race engine development, and conducted Long Beach Grand Prix and Pro-Celebrity Match Race. Results: 14 national championships.
Hyundai Motor America:
o o	Started national Service Department: warranty, quality assurance, consumer affairs, technical and management training. Managed public relation's activities, product introduction press previews, press releases and media interviews.
Kia Motors America:
o o	Consulted with Kia Korea re: establishing a car company in the USA. Started service department: warranty, quality assurance, consumer affairs, service training and publication.

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Mr. Sawyer is a start-up specialist with the operations, management, communications and problem solving skills required to launch the Company successfully. He holds a B.A. in Industrial Technology and attended USC School of Business-International Relations, Ford Marketing Institute, Toyota Management Training, American Management Association Training, Interpersonal skills training, and U.S. Coast Guard Leadership and Diesel Engine schools.

          5.           James A. Gleasman - Director; Consultant to Torvec, Inc.

o Life-long entrepreneur.

o Skilled in management, finance, strategic planning, organizing and marketing.

o Co-inventor of the Gleasman GSD-10 steer drive.

o Established manufacturing of the Torsen® Differential in Argentina, Brazil, etc.

o Principal at two of the family companies, raised capital, negotiated international, military and automotive contracts.

o Set business strategies for small company's dealings with large companies, including sale of family company to Gleason Corp., New York.

o Joint venture partner with Clayton Brokerage Co. of St. Louis, MO.

o Owned financial-consulting business.

o Negotiated with numerous Asian Corporations (including Mitsubishi and Mitsui).

o Educated in Asian philosophy, business practices and culture.

          6.          Samuel M. Bronsky - Chief Financial Officer

Owner of a Certified Public Accounting firm specializing in small to medium-sized businesses. Services include audits, reviews, compilations, and consulting services, including among other items, business valuations, computer applications, assisting in debt acquisition and consolidation, purchasing and selling of businesses and related tax ramifications, and general business assistance for clients. In addition, Mr. Bronsky has worked with various government agencies in a variety of audit contexts, including sales tax audits, IRS examinations. Mr. Bronsky is licensed in New York and is a member of the New York State Society of CPAs and the American Institute of CPAs. He is a director of the East Buffalo Credit Union and the Erie Community College Foundation and is the treasurer of the East Buffalo Credit Union. Mr. Bronsky is past treasurer and director of the Amherst Chamber of Commerce.

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          7.          Vernon E. Gleasman - Consultant to Torvec, Inc.

Mr. Gleasman is co-inventor (with sons, James A. and Keith E. Gleasman) of the all-gear GSD-10 (a hydro-mechanical steering system for track vehicles); conceived and engineered the FTV; and is inventor of the Torsen® Differential now used in many passenger automobiles around the world such as: Porsche, Audi Quattro's, 8 car lines of Toyota (e.g., Lexus, Supra and RAV4), Mazda Miata and RX7, Chevrolet Camero, Pontiac Firebird, Oldsmobile Achieva, Suzuki, and the U.S. Army HMMWV (Hummer). Mr. Gleasman was the winner of the Society of Automotive Engineers' 1983 Schwitzer Award for Most Innovative New Product at the Indianapolis 500; is listed in Who's Who in American Inventors 1990 Edition; he has been nominated to the National Inventors Hall of Fame -- ; and he was named as Inventor of the Year 2001 by the Rochester Intellectual Property Law Association -- his work is featured in the Theory of Machines and Mechanisms, McGraw-Hill, 1995 (Mr. Gleasman's Torsen® Differential is pictured on the jacket cover). He has been granted over 20 patents on gearing, differentials, and machine tools over the past 30 years, and he is the principal inventor on over 100 U.S. patents (as well as corresponding foreign patents), primarily automotive-related. Examples (U.S. patent numbers in parenthesis): hydraulic clutch transmission (2177213); hydraulic clutch for transmission (2226309); Bendix fuel direct engine injector valve and Bendix diesel engine starter (2450129); hydraulic variable-speed hydrostatic transmission (2471031); Vane-type fluid drive (2552167), hypoid differential (2628508); fluid transmission (2668417); White Motor Co. tilting cab (2838126), assigned to White Motor; hydro-vector fuel-injector advance mechanism; catalytic converter for diesel trucks. He is also the inventor of non-freeze water meter, machine tools and other products. Early career: engineer at Bendix; and vice president manufacturing at White Motor, where engineering and management experience included designing and planning White's plant for manufacture of White 9000 heavy truck and organizing manufacturing and production of aircraft components for White's Aircraft division. Later, Mr. Gleasman founded his own companies, including Triple-D, Inc., sold to Gleason Corporation, Rochester, New York.

(c)     Family Relationships

               Vernon E. Gleasman is the father of James A. and Keith E. Gleasman. There are no other family relationships between any directors or executive officers of the Company, either by blood or by marriage.

(d)     Section 16(a) Beneficial Ownership Reporting Compliance

               Based upon its review of copies of Forms 3 and 4 and 5 received by it, the Company believes that, to the extent such Forms were required to be filed, such Forms were timely filed pursuant to Section 16 of the Securities Exchange Act of 1934, and that no director, officer and/or 10% Shareholder required to file such Forms failed to either file them or file them in timely fashion.

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Item 10.     EXECUTIVE COMPENSATION

Summary Compensation Table

               The following table sets forth the aggregate compensation paid or accrued to the Company's Named Executive Officers and Consultants by the Company for services rendered during the fiscal year ending December 31, 2000:

			Long Term Compensation Awards
Name and Position	Annual Compensation		Options Granted	Stock Awards
	Salary	Consultants Fee
Keith E. Gleasman President and Consultant James A. Gleasman Consultant Vernon E. Gleasman Consultant Morton A. Polster Secretary and Consultant Samuel M. Bronsky Chief Financial Officer	$0 $0 $0 $0 $0	$     75,000(1)(4) $     60,000(2)(4) $     71,000(3)(4) $        0        (5) $        0	0 0 0 0 0	0 0 0 2,882(6) 11,989(7)

(1)     On December 1, 1997, the Company entered into a 3 year consulting agreement with Keith E. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity of Consultant to the Company. Under such agreement, Mr. Keith E. Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan. The Company has accrued a total of $201,000 under the consulting agreement though December 31, 2000, of which $75,000 was accrued in fiscal 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years and was modified to authorize the Board of Directors, in its sole discretion, to pay accrued and future Gleasman consulting fees in cash or the capital stock of the Company, or a combination of both, at such times as the Board deems appropriate.

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(2)     On December 1, 1997, the Company entered into a 3 year consulting agreement with James A. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity of Consultant to the Company. Under such agreement, Mr. James A. Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan. The Company has accrued a total of $250,000 under the consulting agreement through December 31, 2000, of which $90,000 was accrued in fiscal 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years and was modified to authorize the Board of Directors, in its sole discretion, to pay accrued and future Gleasman consulting fees in cash or the capital stock of the Company, or a combination of both, at such times as the Board deems appropriate.

(3)     On December 1, 1997, the Company entered into a 3 year consulting agreement with Vernon E. Gleasman, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity of Consultant to the Company. Under such agreement, Mr. Vernon Gleasman is entitled to receive an annual consulting fee of $150,000 and was granted an option to purchase 25,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan. The Company has accrued a total of $214,000 under the consulting agreement through December 31, 2000, of which $79,000 was accrued in fiscal year 2000. The consulting agreement was extended as of December 1, 2000 for an additional 3 years and was modified to authorize the Board of Directors, in its sole discretion, to pay accrued and future Gleasman consulting fees in cash or the capital stock of the Company, or a combination of both, at such times as the Board deems appropriate.

(4)     Each of the consulting agreements contain customary covenants prohibiting the consultant from disclosure of confidential information regarding the Company, its inventions and its products, and provisions confirming that all inventions conceived, made or developed by the consultant and relating to the business of the Company constitutes the sole property of the Company. Each of the consulting agreements contains covenants restricting the consultant from engaging in any activities competitive with the business of the Company during the terms of such agreements and for a period of two years after termination. Each of the consulting agreements also contain a provision that the benefits provided thereunder continue even if the consultant were to become unable to perform services for the Company during its term.

(5)     On February 6, 1998, the Company entered into a 3 year employment agreement with Morton A. Polster, commencing on the first day of the month in which the Company receives the proceeds from the completion of an initial public offering of its securities, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity as Secretary and Legal and Patent Counsel of the Company. Under such agreement, Mr. Polster is entitled to receive a salary of $150,000 during the first year of the agreement, $150,000 during the second year and $150,000 during the last year. He is also entitled to certain employee benefits normally associated with employment such as vacation, health and disability insurance and was granted an option to purchase 100,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan.

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The agreement is automatically renewable for an additional 3 years and may be terminated earlier by the employee upon 12 months notice or by the Company upon payment of a severance of 12 months base pay, except if the termination is for cause. Since the Company has not initiated an initial public offering, the employment agreement, by its terms, has not become effective.

(6)     During fiscal year 2000, Mr. Polster was paid 2,882 shares of the Company's common stock as remuneration for legal services rendered to the Company in connection with its patents.

(7)     During fiscal year 2000, Mr. Bronsky was paid 11,989 shares of the Company's common stock for services rendered as Chief Financial Officer.

               Herbert H. Dobbs is Chairman of the Company's Board of Directors. Lee E. Sawyer is a Director of the Company. During its fiscal year ending December 31, 2000, the Company did not renumerate either of them in such capacities.

               On February 6, 1998, the Company entered into a 3 year employment agreement with Herbert H. Dobbs, commencing on the first day of the month in which the Company receives the proceeds from the completion of an initial public offering of its securities, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity as Chairman and Chief Executive Officer of the Company. Under such agreement, Herbert H. Dobbs is entitled to receive a salary of $150,000 during the first year of the agreement, $150,000 during the second year and $150,000 during the last year. He is also entitled to certain employee benefits normally associated with employment such as vacation, health and disability insurance and was granted an option to purchase 100,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan. The agreement is automatically renewable for an additional 3 years and may be terminated earlier by the employee upon 12 months notice or by the Company upon payment of a severance of 12 months base pay, except if the termination is for cause. Since the Company has not initiated an initial public offering, the employment agreement, by its terms, has not become effective.

               On February 6, 1998, the Company entered into a 3 year employment agreement with Lee E. Sawyer, commencing on the first day of the month in which the Company receives the proceeds from the completion of an initial public offering of its securities, under which he is obligated to devote substantially all of his business and professional time to the Company and its Plan of Operation in the capacity as President and Chief Operating Officer of the Company. Under such agreement, Mr. Sawyer is entitled to receive a salary of $240,000 during the first year of the agreement, $252,000 during the second year and $264,000 during the last year and a minimum bonus of $15,000 per quarter during the agreement's term, with bonus increases determined by the Board of Directors depending upon such factors as performance, profitability and the financial condition of the Company. He is also entitled to certain employee benefits normally associated with employment such as vacation, health and disability insurance and was granted an option to purchase 180,000 shares of the Company's Common Stock pursuant to the Company's 1998 Stock Option Plan. The agreement is automatically renewable for an additional 3 years and may be terminated earlier by the employee upon 12 months notice or by the Company upon payment of a severance of 12 months base pay and minimum bonus, except if the termination is for cause. Since the Company has not initiated an initial public offering, the employment agreement, by its terms, has not become effective.

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               Each of the employment agreements contain customary covenants prohibiting the employee from disclosure of confidential information regarding the Company, its inventions and its products, and provisions confirming that all inventions conceived, made or developed by the employee and relating to the business of the Company constitutes the sole property of the Company. Each of the employment agreements contains covenants restricting the employee from engaging in any activities competitive with the business of the Company during the terms of such agreements and for a period of two years after termination. Each of the employment agreements also contain a provision that the benefits provided thereunder continue even if the employee were to become unable to perform services for the Company during its term.

Option/SAR Grants in Last Fiscal Year

               The following table sets forth certain information for the Named Executive Officers as well as the Company's Consultants with respect to the grant of options to purchase common stock during the fiscal year ended December 31, 2000.

	Shares Underlying	% of Options
Name	Options Granted	Granted to Employees	Exercise Price	Expiration Date
Keith E. Gleasman	0	0%	0	0
James A. Gleasman	0	0%	0	0
Vernon E. Gleasman	0	0%	0	0
Morton A. Polster	0	0%	0	0
Herbert H. Dobbs	0	0%	0	0
Lee E. Sawyer	0	0%	0	0

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

               The following table sets forth certain information for the Named Executive Officers as well as the Company's Consultants with respect to the exercise of options to purchase common stock during the fiscal year ended December 31, 2000 and the number and value of securities underlying unexercised options held by the Named Executive Officers as well as the Company's Consultants as of such date.

Name	Shares Acquired on Exercise	Value Realized	Number of Unexercised Options at December 31, 2000 Exercisable      Unexercisable		Value of Unexercised    In-the-Money Options   at December 31, 2000(1) Exercisable     Unexercisable
Keith E. Gleasman	0	0	20,000	5,000	$   0	$   0
James A. Gleasman	0	0	20,000	5,000	$   0	$   0
Vernon E. Gleasman	0	0	20,000	5,000	$   0	$   0
Morton A. Polster	0	0	60,000	40,000	$   0	$   0
Lee E. Sawyer	0	0	108,000	72,000	$   0	$   0
Herbert H. Dobbs	0	0	60,000	40,000	$   0	$   0

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(1)     The closing price of the Company's common stock on December 29, 2000 (the last trading day of the year) was $4.125 per share. Since the per share exercise price is $5.00 under the option agreements, none of the options were "in-the-money" as of that date.

Year 2000 Options

               No options were granted in the fiscal year ended December 31, 2000 under the Company's 1998 Stock Option Plan.

1998 Stock Option Plan

               On December 1, 1997, the Company's Board of Directors adopted the Company's 1998 Stock Option Plan pursuant to which officers, directors, key employees and/or consultants of the Company may be granted incentive stock options and/or non-qualified stock options to purchase up to an aggregate of 2,000,000 shares of the Company's common stock. On May 27, 1998, the Company's shareholders approved the 1998 Stock Option Plan. On December 17, 1998, the Company registered the shares reserved for issuance under the 1998 Stock Option Plan under the Securities Act of 1933.

               With respect to incentive stock options, the Plan provides that the exercise price of each such option must be at least equal to 100% of the fair market value of the common stock on the date that such option is granted (110% of fair market value in the case of shareholders who, at the time the option is granted, own more than 10% of the total outstanding common stock), and requires that all such options have an expiration date not later than the date which is one day before the tenth anniversary of the date of the grant of such options (or the fifth anniversary of the date of grant in the case of 10% shareholders). However, in the event that the option holder ceases to be an employee of the Company, such option holder's incentive options immediately terminate. Pursuant to the provisions of the Plan, the aggregate fair market value, determined as of the date(s) of grant, for which incentive stock options are first exercisable by an option holder during any one calendar year cannot exceed $100,000.

               With respect to non-qualified stock options, the Plan permits the exercise price to be less than the fair market value of the Common Stock on the date the option is granted and permits Board discretion with respect to the establishment of the terms of such options. Unless the Board otherwise determines, in the event that the option holder ceases to be an employee of the Company, such option holder's non-qualified options immediately terminate.

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               In connection with their employment agreements, the Company's Board of Directors granted stock options under the 1998 Stock Option Plan to the Company's Named Executive Officers entitling them to purchase an aggregate of 380,000 shares of common stock, all of which provide for an exercise price of $5.00 per share, are exercisable on a cumulative basis at the rate of 20% per year beginning on January 1, 1998 and provide that the right to exercise the option in accordance with its terms shall survive the executive's termination of employment. Each option expires on December 31, 2007. In connection with their consulting agreements, the Board of Directors granted stock options under the 1998 Stock Option Plan to the Company's consultants entitling them to purchase an aggregate of 75,000 shares of common stock, all of which provide for an exercise price of $5.00 per share, are exercisable on a cumulative basis at the rate of 20% per year beginning on December 1, 1997 and provide that the right to exercise the option in accordance with its terms shall survive the consultant's termination of services. Each option expires on November 30, 2007.

               No options were granted under the Company's 1998 Stock Option Plan during the fiscal year ending December 31, 2000. No options granted under the Plan were exercised during the fiscal year ended December 31, 2000.

Business Consultants Stock Plan

               On June 2, 1999, the Company created a Business Consultants Stock Plan and reserved 200,000 shares of the Company's $.01 par value common stock, which may be issued from time to time to business consultants and advisors who provide bona fide services to the Company, provided that such services are not in connection with the offer or sale of securities of the Company in a capital raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities.

               With respect to the actual issuance by the Company of shares for services rendered in accordance with the terms of the Plan, the per share value of such shares is equal to the closing price for the Company's common stock on a date which is one business day immediately prior to the issuance of the shares as quoted in the over-the-counter market (OTCBB).

               The Company registered the 200,000 shares reserved for issuance under the Business Consultants Stock Plan under the Securities Act of 1933, and the Registration Statement became effective on June 11, 1999. By virtue of such registration, business consultants, who are not affiliates of the Company, may immediately sell such shares in open market transactions without securities law restrictions.

               On September 12, 2000, the Board of Directors authorized a 200,000 share increase in the number of shares issuable under the Plan. The Company filed Form S-8, Registration Statement with the Securities and Exchange Commission which became effective on October 5, 2000 to register the additional 200,000 shares.

               For the fiscal year ending December 31, 2000, the Company issued 196,259 shares of common stock under the Business Consultants Stock Plan.

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Item 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Security Ownership

          The following table sets forth as of December 31, 2000 certain information with respect to the beneficial ownership of the common stock of the Company by (i) each person known by the Company to own more than 5% of the outstanding shares of the common stock of the Company, each director, each executive officer, each consultant and (ii) all directors, executive officers and named consultants of the Company as a group. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares.

Name and Address of   Beneficial Owner	Number of           Position	Shares    Owned	Percent   of Shares   Owned(1)
Herbert H. Dobbs 448 West Maryknoll Road Rochester Hills, Michigan 48309 Keith E. Gleasman 11 Pond View Drive Pittsford, New York 14534 Lee E. Sawyer 16 Williamsburg Lane Rolling Hills, California 90274 Morton A. Polster c/o Eugene Stephens & Associates 56 Windsor Street Rochester, New York 14605 James A. Gleasman 11 Pond View Drive Pittsford, NY 14534 Vernon E. Gleasman 11 Pond View Drive Pittsford, NY 14534 Samuel M. Bronsky 6653 Main Street Williamsville, NY 14221 All Executive Officers and Directors as a Group (7 persons)	Chairman of the Board of Directors Director; President and Consultant to Torvec, Inc. Director Director; Secretary of Torvec, Inc. Director; Consultant to Torvec, Inc. Consultant to Torvec, Inc. Chief Financial Officer	401,000(2) 5,382,943(3) 393,000(4) 319,883(5) 5,372,141(6) 5,477,601(7) 12,989 17,359,557(8)	1.77% 23.84% 1.73% 1.41% 23.8% 24.3% Less Than     1% 76.21%

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1.     Except as indicated in the footnotes to this table, the Company believes that all the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable. In accordance with the rules of the Commission, a person or entity is deemed to be the beneficial owner of securities that can be acquired by such person or entity within 60 days from December 31, 2000 upon the exercise of options or warrants. Each beneficial owner's percentage ownership is determined by assuming that options and warrants that are held by such person (but not those held by any other person) and which are exercisable within 60 days of December 31, 2000 have been exercised. The inclusion herein of such shares listed as beneficially owned does not constitute an admission of beneficial ownership. Percentages herein reflect a base of 22,552,062 shares of common stock outstanding as of December 31, 2000.

2.     Includes 60,000 shares which may be purchased through the exercise of an option granted in connection with his employment agreement, exercisable at $5.00 per share. In May, 1998, Dr. Dobbs entered into option agreements pursuant to which related parties have the right to purchase 360,000 shares of the Company's common stock from him at an exercise price of $5.00 per share at any time during a ten year option term.

3.     Includes 20,000 shares which may be purchased through the exercise of an option granted in connection with his consulting agreement, exercisable at $5.00 per share. In December, 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 300,000 shares of the Company's common stock from him at an exercise price of $5.00 per share at any time during a ten year option term.

4.     Includes 108,000 shares which may be purchased through the exercise of an option granted in connection with his employment agreement, exercisable at $5.00 per share.

5.     Includes 60,000 shares which may be purchased through the exercise of an option granted in connection with his employment agreement, exercisable at $5.00 per share.

6.     Includes 20,000 shares which may be purchased through the exercise of an option granted in connection with his consulting agreement, exercisable at $5.00 per share. In November, December 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 364,000 shares of the Company's common stock from him at an exercise price of $5.00 per share at any time during a 10 year option term.

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7.     Includes 1,744,066 shares attributable to ownership by Mr. Gleasman's wife. Includes 20,000 shares which may be purchased through the exercise of an option granted in connection with his consulting agreement, exercisable at $5.00 per share. In December, 1997, Mr. Gleasman entered into option agreements pursuant to which related parties have the right to purchase 2,000,000 shares of the Company's common stock from him at an exercise price of $5.00 per share at any time during a 10 year option term.

8.     Includes an aggregate 288,000 shares which may be purchased through the exercise of options granted in connection with employment and consulting agreements, exercisable at $5.00 per share.

Item 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions

               During the ten plus years prior to the incorporation of the Company, Vernon E., Keith E. and James A. Gleasman invented and patented numerous improvements relating to drive mechanisms for tracked vehicles, transmissions, hydraulic pumps/motors, a unique form of gearing, universal joints, and constant velocity joints as disclosed in such patents. Upon the Company's incorporation, the Gleasmans assigned all their right, title and interest to and in such inventions and patents to the Company in exchange for the issuance of 16,464,400 shares of the Company's common stock and the agreement of the Company to pay the Gleasmans the sum of $365,000 for expenditures in the development of these inventions and products, the Gleasmans having agreed to waive and release the Company from payment of any other expenses that they incurred in the development of these inventions and products. The Board of Directors of the Company concluded that the value of the inventions, patents and patent applications assigned to the Company, as well as the value of the services rendered, had a value in excess of the par value of the number of shares transferred to the assignors and service providers, respectively. Shares issued are fully paid and nonassessable.

               On April 15, 1997, the Company issued 1,000,000 shares of its $.01 par value common stock to certain principals of LT Lawrence & Co., Inc. as compensation pursuant to the terms of a nonexclusive financial consulting agreement entered into February 11, 1997. LT Lawrence & Co., Inc. dissolved in March 1998, although the principals still hold the shares which were issued to them less any shares they may have sold. As a result of the same transaction, there are 125,000 outstanding consulting warrants which may be exercised if and when the Company has an initial public offering of its common stock.

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               On March 26, 1999, Keith and James Gleasman each purchased 26,000 shares of the Company's common stock at $10.00 per share under the Company's 1998 private placement. On June 25, 1999, Keith and James Gleasman each purchased 9,500 shares of the Company's common stock at $10.00 per share under the Company's 1998 private placement. On August 9, 1999, Keith Gleasman purchased 4,870 shares and James Gleasman purchased 3,500 shares at $10.00 per share under the Company's 1998 private placement.

               On June 29, 2000, the Company announced that it had granted an exclusive, world-wide license of all its automotive technology to Variable Gear, LLC for the aeronautical and marine markets. Variable Gear will pay the Company 4% royalties for 7 years after which the Company can repurchase the license. Variable Gear is owned 51% by Robert C. Horton, Chairman and CEO of Ultrafab, Inc. and a Company shareholder. The Company owns the remaining 49%.

               Mr. Morton A. Polster, a director of the Company and its Secretary, has been Patent Counsel to the Gleasman family since 1989 and has been in charge of the preparation and execution of the Gleasmans' and now the Company's U.S. and international patent protection. Mr. Polster received 291,600 shares of the Company's Common Stock at the inception of the Company. Mr. Polster has received 9,113 shares under the Company's Business Consultants Stock Plan through March 15, 2001.

               On December 8, 2000, the Company entered into an Investment Banking Services Agreement with Dunwoody Brokerage Services, Inc., d/b/a Swartz Institutional Finance. Under the agreement, Swartz has agreed to introduce the Company to potential investment partners with a view to making an investment in the Company and/or entering into a strategic partnership with the Company. Swartz will receive 4% of the "transaction value" of any closed transaction resulting from any Swartz introduction. Such amount is payable in cash or common stock of the Company. In addition, Swartz will be issued warrants to purchase the number of the Company's common shares equal to 4% of the transaction value of any closed transaction, based upon the market price of the Company's common stock on the closing date, at an exercise price equal to such market price.

               Certain officers, directors and consultants may engage in transactions with the Company in the ordinary course of the business of the Company. It is expected that the terms and conditions of such transactions will be substantially the same as similar transactions with unrelated parties.

               Other than as described herein, there have been no material transactions, series of similar transactions or currently proposed transactions to which the Company was or is a party, in which the amount invested exceeds $60,000 and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than five percent of the Company's common stock, or any member of the immediate family of any of the foregoing persons, had a material interest.

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Item 13.     EXHIBITS AND REPORTS ON FORM 8-K.

(a)     Exhibits

               The following Exhibits, as applicable, are attached to this Annual Report (Form 10-KSB). The Exhibit Index is found on the page immediately succeeding the signature page and the Exhibits follow on the pages immediately succeeding the Exhibit Index.

(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	By-laws 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;
	3.3	Certificate of Amendment to the Certificate of Incorporation dated August 30, 2000, incorporated by reference to Form SB-2 filed October 19, 2000.
(4)	Instruments defining the rights of holders including indentures None
(9)	Voting Trust Agreement
	None

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(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;
	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 Statement registering an additional 200,000 shares of the Company's $.01 par value common stock reserved for issuance thereunder, effective October 5, 2000;
	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;

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	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	Consulting Agreement Extension with Keith E. Gleasman, effective December 1, 2000;
	10.9	Consulting Agreement Extension with James A. Gleasman, effective December 1, 2000;
	10.10	Consulting Agreement Extension with Vernon E. Gleasman, effective December 1, 2000.
(11)	Statement re computation of per share earnings (loss)
	Not applicable
(13)	Annual report to security holders for last fiscal year, Form 10-QSB or quarterly report to security holders.
	Not applicable
(16)	Letter on change in certifying accountant
	Not applicable
(18)	Letter re change in accounting principles
	Not applicable
(21)	Subsidiaries of the small business issuer
	21.1	ICE Surface Development, Inc. - New York
	21.2	Variable Gear, LLC - New York

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(22)	Published report regarding matters submitted to vote of security holders
	Not applicable
(23)	Consents of experts and counsel
	23.1	Consent of Richard A. Eisner & Company, LLP
(24)	Power of attorney
	Not applicable
(99)	Additional exhibits
	Not applicable

(b)     Reports Filed on Form 8-K

               On October 2, 2000, the Company filed a Form 8-K (Current Report) to disclose its Investment Agreement with Swartz Private Equity, LLC and to file as exhibits all documents in connection therewith.

               On November 21, 2000, the Company filed a Form 8-K (Current Report) to disclose that it had filed suit against McElroy Manufacturing, Inc. Arthur H. McElroy, II and Tri-Mc ("MMI").

               On November 30, 2000, the Company filed a Form 8-K (Current Report) to disclose its acquisition of ICE Surface Development, Inc.

(c)     Forward Looking Information

               This Annual Report contains forward-looking statements that are based on current expectations, estimates and projections about the Company and its plans for future operation as well as management's beliefs and assumptions. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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               The Future Factors that may affect the Company, its plans for its future operations and performance and results of the Company's future business include, but are not limited to, the following:

a.	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;
b.	the Company's ability to enter into collaborative joint working arrangements, formal joint venture arrangements and/or licensing 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 in the automotive industry;
e.	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.

               Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company does not intend to update forward-looking statements.

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SIGNATURES

               In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TORVEC, INC.
Date: November 6, 2001	By:      /S/ KEITH E. GLEASMAN                                       Keith E. Gleasman, President

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: November 6, 2001	By:     /S/ HERBERT H. DOBBS
	Herbert H. Dobbs, Chairman of the Board of Directors
Dated: November 6, 2001	By:     /S/ KEITH E. GLEASMAN
	Keith E. Gleasman, President and Director
Dated: November 6, 2001	By:     /S/ MICHAEL MARTINDALE
	Michael Martindale, Chief Executive Officer and Director
Dated: November 6, 2001	By:      /S/ JACOB H. BROOKS
	Jacob H. Brooks, Chief Operating Officer and Director
Dated: November 6, 2001	By:     /S/ MORTON A. POLSTER
	Morton A. Polster, Director and Secretary
Dated: November 6, 2001	By:     /S/ JAMES A. GLEASMAN
	James A. Gleasman, Director; Consultant
Dated: November 6, 2001	By:     /S/ LEE E. SAWYER
	Lee E. Sawyer, Director
Dated: November 6, 2001	By:     /S/ SAMUEL M. BRONSKY
	Samuel M. Bronsky, Chief Financial and Accounting Officer

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EXHIBIT INDEX

EXHIBIT				PAGE
(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.		N/A
(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;		N/A
	3.2		By-laws 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
	3.3		Certificate of Amendment to the Certificate of Incorporation dated August 30, 2000, incorporated by reference to Form SB-2 filed October 19, 2000.	N/A
(4)	Instruments defining the rights of holders including indentures None			N/A
(9)	Voting Trust Agreement
	None			N/A

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EXHIBIT			PAGE
(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;	N/A
	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;	N/A
	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 Statement registering an additional 200,000 shares of the Company's $.01 par value common stock reserved for issuance thereunder, effective October 5, 2000;	N/A
	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;	N/A
	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;	N/A
	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;	N/A

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EXHIBIT				PAGE
	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;	N/A
	10.8		Consulting Agreement Extension with Keith E. Gleasman, effective January 1, 2001;	62
	10.9		Consulting Agreement Extension with James A. Gleasman, effective January 1, 2001;	63
	10.10		Consulting Agreement Extension with Vernon E. Gleasman, effective January 1, 2001.	64
(11)	Statement re computation of per share earnings (loss)			N/A
(13)	Annual report to security holders for last fiscal year, Form 10-QSB or quarterly report to security holders.			N/A
(16)	Letter on change in certifying accountant			N/A
(18)	Letter re change in accounting principles			N/A
(21)	Subsidiaries of the small business issuer
	21.1		ICE Surface Development, Inc. - New York	N/A
	21.2		Variable Gear, LLC - New York	N/A
(22)		Published report regarding matters submitted to vote of security holders		N/A
(23)		Consents of experts and counsel
		23.1	Consent of Richard A. Eisner & Company, LLP	65
(24)		Power of attorney		N/A
(99)		Additional exhibits		N/A

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EXHIBIT 10.8

-69-

EXTENSION OF AND AMENDMENT TO CONSULTING AGREEMENT

               AGREEMENT made as of December 1, 2000 between TORVEC, Inc., a corporation organized and existing under the laws of the State of New York (the "Corporation"), and KEITH E. GLEASMAN, residing at 11 Pond View Drive, Pittsford, New York 14534 (the "Consultant").

W I T N E S S E T H:

               WHEREAS, the parties hereto entered into a Consulting Agreement on the 1^st day of December, 1997 ("Consulting Agreement") pursuant to which Consultant was engaged for a period of three (3) years, and

               WHEREAS, the parties hereto desire to amend and extend the terms of said Consulting Agreement.

               NOW, THEREFORE, it is agreed as follows:

               1.               Paragraph 4 of the Consulting Agreement is hereby amended to add a new subparagraph (d) to read as follows:

(d) "All compensation owed, accrued and/or to be paid under this Agreement as herein set forth shall, in the discretion of the Board of Directors, be paid either in shares of TORVEC's capital stock, in cash or in a combination of both stock and cash at such time(s) as may be determined by the Board."

               2.               Paragraph 6 of the Consulting Agreement is hereby modified by deleting Paragraph 6 thereof and substituting therefor the following:

"This Agreement shall be for a period of three (3) years commencing on December 1, 2000 and shall be automatically extended for an additional one (1) year period as of each anniversary hereof, unless earlier terminated or canceled as provided herein."

               3.               In all other respects the Consulting Agreement is hereby ratified and confirmed.

               IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its officers thereunto duly authorized and its corporate seal to be hereunto affixed, and the Consultant has hereunto set his hand and seal, all as of the day and year first above written.

	TORVEC, Inc. By:     /S/ MORTON A. POLSTER                   Morton A. Polster, Secretary
[Corporate Seal]	/S/ KEITH E. GLEASMAN                   Keith E. Gleasman, Consultant 112

EXHIBIT 10.9

-70-

EXTENSION OF AND AMENDMENT TO CONSULTING AGREEMENT

               AGREEMENT made as of December 1, 2000 between TORVEC, Inc., a corporation organized and existing under the laws of the State of New York (the "Corporation"), and JAMES A. GLEASMAN, residing at 11 Pond View Drive, Pittsford, New York 14534 (the "Consultant").

W I T N E S S E T H:

               WHEREAS, the parties hereto entered into a Consulting Agreement on the 1^st day of December, 1997 ("Consulting Agreement") pursuant to which Consultant was engaged for a period of three (3) years, and

               WHEREAS, the parties hereto desire to amend and extend the terms of said Consulting Agreement.

               NOW, THEREFORE, it is agreed as follows:

               1.               Paragraph 4 of the Consulting Agreement is hereby amended to add a new subparagraph (d) to read as follows:

(d) "All compensation owed, accrued and/or to be paid under this Agreement as herein set forth shall, in the discretion of the Board of Directors, be paid either in shares of TORVEC's capital stock, in cash or in a combination of both stock and cash at such time(s) as may be determined by the Board."

               2.               Paragraph 6 of the Consulting Agreement is hereby modified by deleting Paragraph 6 thereof and substituting therefor the following:

"This Agreement shall be for a period of three (3) years commencing on December 1, 2000 and shall be automatically extended for an additional one (1) year period as of each anniversary hereof, unless earlier terminated or canceled as provided herein."

               3.               In all other respects the Consulting Agreement is hereby ratified and confirmed.

               IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its officers thereunto duly authorized and its corporate seal to be hereunto affixed, and the Consultant has hereunto set his hand and seal, all as of the day and year first above written.

	TORVEC, Inc. By:     /S/ MORTON A. POLSTER                   Morton A. Polster, Secretary
[Corporate Seal]	/S/ JAMES A. GLEASMAN                   James A. Gleasman, Consultant 113

EXHIBIT 10.10

-71-

EXTENSION OF AND AMENDMENT TO CONSULTING AGREEMENT

               AGREEMENT made as of December 1, 2000 between TORVEC, Inc., a corporation organized and existing under the laws of the State of New York (the "Corporation"), and VERNON E. GLEASMAN, residing at 11 Pond View Drive, Pittsford, New York 14534 (the "Consultant").

W I T N E S S E T H:

               WHEREAS, the parties hereto entered into a Consulting Agreement on the 1^st day of December, 1997 ("Consulting Agreement") pursuant to which Consultant was engaged for a period of three (3) years, and

               WHEREAS, the parties hereto desire to amend and extend the terms of said Consulting Agreement.

               NOW, THEREFORE, it is agreed as follows:

               1.               Paragraph 4 of the Consulting Agreement is hereby amended to add a new subparagraph (d) to read as follows:

(d) "All compensation owed, accrued and/or to be paid under this Agreement as herein set forth shall, in the discretion of the Board of Directors, be paid either in shares of TORVEC's capital stock, in cash or in a combination of both stock and cash at such time(s) as may be determined by the Board."

               2.               Paragraph 6 of the Consulting Agreement is hereby modified by deleting Paragraph 6 thereof and substituting therefor the following:

"This Agreement shall be for a period of three (3) years commencing on December 1, 2000 and shall be automatically extended for an additional one (1) year period as of each anniversary hereof, unless earlier terminated or canceled as provided herein."

               3.               In all other respects the Consulting Agreement is hereby ratified and confirmed.

               IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its officers thereunto duly authorized and its corporate seal to be hereunto affixed, and the Consultant has hereunto set his hand and seal, all as of the day and year first above written.

	TORVEC, Inc. By:     /S/ MORTON A. POLSTER                   Morton A. Polster, Secretary
[Corporate Seal]	/S/ VERNON E. GLEASMAN                   Vernon E. Gleasman, Consultant 114

-72-

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-80443), Form S-8 (No. 333-47392), Form S-8 (No. 333-69123) and Form SB-2 (333-48188), of Torvec, Inc. of our report dated March 7, 2001 (May 2, 2001 with respect to Note K), on our audit of the financial statements of Torvec, Inc. which is included in the annual report on Form 10-KSB/A for the year ended December 31, 2000.

/S/ RICHARD A. EISNER & COMPANY, LLP

Richard A. Eisner & Company, LLP

New York, New York
November 2, 2001

115