27-Jan-2010 Entry into a Material Definitive Agreement.
On January 27, 2010, Torvec executed an agreement to settle its litigation with Ice Engineering LLC concerning certain payments owed to Torvec in connection with the assignment of its ice technology license to Ice Engineering. As a result of the settlement, Torvec will be paid a total of $1,100,000, with $300,000 paid to Torvec on January 27, and an additional $800,000 paid to Torvec by February 26, 2010.
Torvec's board of directors believes this settlement is in the best interests of Torvec since it enables the company to obtain needed dollars and avoid continued protracted litigation.
This influx of dollars, coupled with approximately $103,000 received by Torvec on January 26, 2010, representing refundable New York State research and development tax credits, will enable Torvec to complete the following programs towards the commercialization of the company's IsoTorque technology:
1. In mid-January 2010, the company shipped an IsoTorque differential to General Motors to enable GM to evaluate the IsoTorque in the Cadillac CTS (and perhaps for a new vehicle platform under consideration). While we anticipate GM's evaluation will take place over the next month to six weeks, we will simultaneously move forward with building an IsoTorque for shipment and evaluation by GM for its fleet of front-wheel drive vehicles;
2. The company now will be able to complete its work in developing a design-specific IsoTorque differential for shipment and evaluation by Hyundai for its Genesis Coupe;
3. As a direct result of the company's successful racing efforts and contacts developed through such efforts, the company intends to use a portion of the monies described above to exploit the differential aftermarket in 2010 by marketing, manufacturing and distributing IsoTorque differentials for Corvette C-5 and C-6 cars as well as for the SMS 620 Camaro sports cars. According to the company's research, up to 380,000 C-5 and C-6 Corvettes have been produced since 1997 and up to 80,000 current-generation Camaros were produced in 2009.
4. These funds will enable the company to complete IsoTorque units for shipment and evaluation by Ford Motor Company for its fleet of front-wheel drive vehicles, including the very popular Ford Taurus and the Ford Edge family of vehicles as well as for shipment and evaluation by Tesla Motors, a leading-edge electric car manufacturer, for its Roadster.
In addition these monies will also assist the company move forward with the Torvec-SEAL
program adapting our constant velocity joint technology for use in the worldwide mining industry. This program has been specifically commissioned by a significant West Virginia mining corporation----Eastern Mining & Industrial Supply company of Chapmanville, West Virginia.
Finally, these monies, coupled with the anticipated success of the programs detailed above, will enable the company to continue all of its commercializing efforts with all of our other technologies-----including the FTV-Air Force program which the company anticipate will shift into high gear after we ship the FTV, as modified in accordance with Air Force specific requests, back to Panama City in early February, 2010.
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