SOURCE: Nestor, Inc.

October 09, 2008 13:00 ET

Nestor Announces $500,000 in New Financing

Investors, Shaken by Economic Downturn, Are Confident in Nestor's Success

PROVIDENCE, RI--(Marketwire - October 9, 2008) - Nestor, Inc. (OTCBB: NEST) announced today that it has secured $500,000 in new financing to support growth in the Company's automated traffic safety enforcement business. Several institutional and accredited investors committed 500,000 dollars in bridge financing after thoroughly reviewing the Company's progress and growth potential. The Board of Directors approved this new investment amidst news of record losses in the U.S. and international stock markets.

Clarence A. Davis, Nestor's Chief Executive Officer, stated: "We are extremely pleased with investors' demonstrated confidence in Nestor. To have secured financing in this market on such favorable terms demonstrates Nestor's inherent strength and serves notice that we are here to stay. Our recent growth, together with carefully planned and thoroughly vetted business objectives, has convinced investors that we are a viable choice for their future. We are the right company at the right time."

Nestor's third quarter financial results will be released mid-November. Second quarter results showed tremendous positive progress and forecasted the Company's ability to grow a successful and profitable business.

About Nestor:

Nestor, Inc. is a 25-year-old publicly held Delaware corporation incorporated in 1983. Nestor wholly owned subsidiary Nestor Traffic Systems is a leading provider of automated traffic violation enforcement and crash prevention systems and services. Nestor's product suite includes CrossingGuard® Automated Red Light Enforcement, which uses patented multiple, time-synchronized videos to capture comprehensive evidence of red light and speed violations, unique and unmatched Collision Avoidance™ that directly prevents intersection crashes and Vitronic's PoliscanSpeed™ speed enforcement, capable of tracking multiple vehicles in multiple lanes simultaneously. Nestor works with local, county and state governments of all sizes including the City of Los Angeles, Fulton County, Georgia and the State of Delaware, with the country's only fully operational statewide automated enforcement program, to deploy and install sensible safety solutions.

Statements in this press release about future expectations, plans and prospects for Nestor, including statements containing the words "expects," "will," and similar expressions, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We may not meet the expectations disclosed in our forward-looking statements and investors should not place undue reliance on those statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including: market acceptance of our products, competition, legal and legislative challenges to automated traffic enforcement, and other factors discussed in Risk Factors in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC. Investors are advised to read Nestor's Annual Report, quarterly reports on Form 10-Q and current reports on Form 8-K filed after our most recent annual or quarterly report. The forward-looking statements in this letter represent our current views and we disclaim any obligation to update these forward-looking statements.

CrossingGuard® is a registered trademark of Nestor Traffic Systems, Inc. PoliscanSpeed™ is a trademark of Vitronic. For more information, call (866) 434-5522 or visit www.nestor.com.