More News from the CEO-The date is wrong but it is new news.
March 3, 2009
Dear shareholders,
At our January shareholders meeting, I mentioned that board member Asher Flaum and Andrew Gleasman had “just returned from meetings in Washington, D.C.” In point of fact, Torvec has been engaged for quite some time in exploring the availability of federal dollars to expedite the completion of ongoing projects and help us accelerate the commercialization of the company’s technology portfolio.
In February, 2009, we signed a one-year exclusive agreement with Capital Campaigns, Inc. of Falls Church, Virginia to guide us through the maize of the federal bureaucracy. This company and its associates was formed by several Washington, D.C. veterans who have worked closely together on important national and regional issues for over a decade. All members have expertise as senior staff members of key Congressional committees or leadership offices and as senior counselors to companies and national organizations.
Capital Campaigns and its associated companies represent a large variety of clients, including large agricultural, energy and pharmaceutical companies as well as national and regional business associations and state and local governments. Services provided include:
monitoring legislation and federal regulations;
facilitating discussions with Congress and the Executive Branch;
guiding initiatives and funding requests through the authorization and appropriations processes;
drafting testimony before congressional committees;
building industry and grassroots coalitions.
As you probably are aware, in the past, we have sought local, state and federal funding and have engaged consultants to assist us with partial success. Despite our past experience, we believe we will be successful in lining up significant federal and state monies through this initiative for three very important reasons:
1. The National and Local Economy and Washington’s Reaction
It is perhaps the understatement of the century to state that our national and state economies are deeply frayed, almost to the breaking point. It has become equally obvious that Washington’s response is to make dollars available in abundance, far more than it would in normal times and make funds available at a much faster, more efficient pace than normally. Simply put, the pool of available money is deeper than in the past.
2. Torvec’s Products Are Eminently Suitable For Current Economic Climate
Our national mood today is all about economic revival, jobs, increased safety and increased concern for the environment (“green initiatives”). Torvec’s products and the company’s current projects are all about---------
a) Green---- we are engaged with one of Detroit’s “Big Three” to integrate our infinitely variable transmission with that company’s hydraulic launch assist device for its cars and trucks. This engagement materialized due to our outstanding test results, our transmission’s start-up torque and power density (size). It is anticipated that our combined efforts lead to the production of vehicles with dramatically less emissions than currently is available. Click here for a visual demonstration of particulate reduction;
b) Fuel-Savings----- the company’s infinitely variable transmission constitutes a major breakthrough in transmission design. Employing patented hydraulics and gear arrangements, the IVT has achieved significant(over 20%)increase in diesel fuel mileage over existing automatic transmissions while at the same time significantly reducing engine emissions and diesel particulates;
c) Safety----- the company’s IsoTorque® differential is a traction differential that increases the safety, performance and handling of cars and trucks. Due to its unique gear design, the IsoTorque is more efficient than traditional traction differentials in that it transfers more horsepower to the ground, reduces tire wear, and improves fuel economy;
d) Jobs--- as discussed at our shareholders meeting, a major medium truck manufacturer is interested in licensing the company’s Full Terrain Vehicle and purchasing the steerdrive, pumps/motors and IsoTorque differentials for each vehicle directly from Torvec. To meet such demand, the company would need to expand its physical presence in the Rochester area and employ up to 400 new employees to build, assemble and ship such products for installation in each FTV manufactured.
3. Targeted Programs/ Sense of Urgency
As we all are aware, Congress has recently completed its work on an $800 billion stimulus bill. The stimulus has breathed new life (and dollars) into federal programs targeted to financially assist companies such as Torvec. And, the stimulus contains instructions to agencies to expedite the process so that targeted companies receive needed dollars more quickly.
For example, within the U.S. Department of Energy, there is an Innovative Technology Program that assists cutting edge technology companies. This Program received $6 billion in stimulus funding, with an additional $10 million to DOE to administer what is called the Advanced Technology Vehicle Program.
The Advanced Technology Vehicle Program is one of a number of relatively new DOE Programs established by section 136 of the Energy Independence and Security Act of 2007. It is an incentive program consisting of both grants and loans to support the development of advanced technology vehicles and associated components in the U.S. This particular program was beefed up as part of the auto industry bailout, particularly with instructions to DOE to expedite the application process.
The ATVM provides dollars to automobile and automobile part manufacturers for the costs of re-equipping, expanding, or establishing manufacturing facilities in the U.S. to produce advanced technology vehicles or qualified components as well as for the associated engineering integration costs.
There, of course, is an application review process, more exhaustive review of the proposed technology, DOE determination of the terms and conditions of the grant or loan and the closing. Grants or loans are issued in 90-day tranches. The $10 million appropriated to the DOE is to enable the agency to add additional staff and resources to process applications more quickly so that it is anticipated that the first monies will be disbursed in late April or early May, 2009. DOE plans to disburse approximately $4.2 billion in ATVM dollars by the end of 2010.
We have been told by our consultants that Torvec is “well-poised” to participate this program.
I have simply given an overview of one federal program available to us. We, together with our consultants, are working to access other commercialization dollars from a wide variety of government and private sources. We anticipate, for example, spending a number of days in the near future in Washington meeting with:
a) members of the New York Congressional delegation;
b) staffers on the House Energy and Commerce Committee, House Science Committee, Senate Energy Committee and Senate Commerce Committee;
c) officials at the Department of Energy;
d) key individuals in the Office of the Vice President who are responsible for administering stimulus funds.
e) officials at the U.S. Department of Commerce and the Environmental Protection Agency.
This CEO Update is simply designed to fill you in on what we are presently doing to access stimulus dollars. Pleased be assured that all of the projects discussed at our shareholders meeting and in our public filings are proceeding apace. We will fill you in on developments as material events materialize.
Sincerely,
James Gleasman
CEO
