SOURCE: Nestor, Inc.

November 10, 2006 17:30 ET

Nestor, Inc. to Apply for Transfer From Nasdaq Global Market to Nasdaq Capital Market

PROVIDENCE, RI -- (MARKET WIRE) -- November 10, 2006 -- Nestor, Inc. (NASDAQ: NEST), the parent company of Nestor Traffic Systems, Inc., a leading provider of advanced traffic enforcement solutions, is pleased to announce that it has filed an application to transfer the listing of the Company's common stock from The Nasdaq Global Market to The Nasdaq Capital Market.

On November 10, 2006, the Executive Committee of the Board of Directors authorized management to file an application to transfer the listing of the Company's common stock from The Nasdaq Global Market to The Nasdaq Capital Market. The Company filed the application on November 10, 2006. The Company expects to receive Nasdaq's approval decision within two weeks and expects to maintain its current Nasdaq Global Market status pending approval of the transfer application. The Company believes it is eligible to transfer to The Nasdaq Capital Market, although there can be no assurance that the transfer will be approved.

As previously announced, on October 16, 2006, the Company received a Nasdaq Staff Deficiency Letter indicating that the market value of the Company's common stock had fallen below $50 million, the minimum level required for the continued listing of its common stock on the Nasdaq Global Market based on Marketplace Rule 4450(b)(1)(A). In accordance with Marketplace Rule 4450(e)(4), the Company was provided with 30 calendar days, or until November 15, 2006, to regain compliance. If at any time before November 15, 2006, the market value of the Company's common stock had been $50 million or more for at least ten consecutive business days, Nasdaq's staff would have determined if the Company complied with the Nasdaq Global Market continued listing standards. The Company will not be able to demonstrate compliance by November 15, 2006. The Company expects to maintain its current Nasdaq Global Market status pending approval of the transfer application.

Nestor Traffic Systems provides automated traffic enforcement solutions to state and municipal governments. CrossingGuard® uses patented multiple, time-synchronized videos to capture comprehensive evidence of red light and speed violations. In addition, CrossingGuard® offers customers a unique Collision Avoidance™ safety feature that can help prevent intersection collisions. CrossingGuard® is a registered trademark of Nestor Traffic Systems, Inc. Collision Avoidance™ and NTS Video VASCAR™ are trademarks of Nestor Traffic Systems, Inc. Nestor Traffic Systems is the exclusive North American distributor for Vitronic's PoliScanSpeed™ scanning LiDAR, which tracks multiple vehicles bi-directionally in multiple lanes simultaneously. PoliScanSpeed™ is a trademark of Vitronic. For more information, call (401) 274-5658 or visit www.nestor.com.

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: approvals of our application to transfer our listing, 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.