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NESTOR REPORTS OPERATING RESULTS FOR FIRST QUARTER OF FISCAL 1994

 PROVIDENCE, R.I., Nov. 15 /PRNewswire/ -- NESTOR, Inc. (OTC: NEST) today announced operating results for the first quarter of fiscal 1994 ended September 30, 1993.
 Dr. David Fox, president and chief executive officer, commenting on the results, stated, "In comparing quarter-to-quarter revenues, it is important to note that last year, $240,000, or about one-third of the total revenues for the quarter, were for engineering under our prior Defense Advanced Research Projects Agency (DARPA) contract, which was substantially completed in FY93, and $75,000 was a restatement of prior quarter events. These items thus tend to obscure the fact that other revenues increased from $393,000 in the first quarter of 1992 to $491,000 in the first quarter of 1993. Furthermore, revenues from product licensing, the true measure of our future business, increased from 27 percent to 63 percent of total revenues.
 "Pivotal events," he continued, "have taken place over the last few months in each of the market areas that Nestor has committed itself to. In the area of high- speed recognition hardware, Nestor, who had jointly developed the Ni1000 chip with Intel, was recently awarded a new ARPA contract to develop applications for a second generation chip. We announced an agreement several days ago with Intel Corporation in which the two companies will again join forces under a 15 year license for development and commercialization of the Ni1000 and related hardware and software. This can lead to an entirely new generation of high-speed neural-network chips that will revolutionize desk-top computing.
 "We continue to add customers in the area of credit card fraud detection. We recently signed three contracts for our Fraud Detection System (FDS) with major companies, in addition to the on-going program with Mellon Bank. These
contracts with Bank of America, the Canadian


Imperial Bank of Commerce in Toronto, and Europay International, a global partner of Mastercard International in Europe have the potential to develop into major sources of revenue for us.
 "In the increasingly important area of optical character recognition, we have increased the number of resellers who use NestorReader as the character recognition module in their end-user product. NestorReader integrators and resellers now number over 25 compared with seven one year ago. End-users, last year, amounted to approximately 200. This year, that number has surged to well over 2,000. This factor, too, should result in a growing stream of licensing revenue for Nestor.
 "All of these factors indicate that we have begun the shift from an "engineering" company to a "product-selling" company. The foundation for our future growth has begun to take shape."
 All NESTOR products use the Company's proprietary neural-network technology contained in adaptive information-processing systems that "learn" from experience. These products can be taught to recognize complex configurations of data, and to interpret and classify various patterns.
 NESTOR, INC.
 Selected Operating Results (unaudited)
 Three Months Ended September 30
 1993 1992
 Total revenues $ 491,383 $ 707,980
 Net income (loss) (314,031) (109,349)
 Net income (loss)
 Per share $ (0.05) $ (0.02)
 Weighted average number
 of shares outstanding 6,802,702 6,801,602
 -0- 11/15/93
 /CONTACT: David Fox of NESTOR, 401-331-9640; or Burton Arkin of Arkin Associates, 212-599-2369/
 (NEST)


CO: NESTOR, Inc. ST: Rhode Island IN: CPR SU: ERN

WB -- NY091 -- 4456 11/15/93 13:03 EST
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Publication:PR Newswire
Date:Nov 15, 1993
Words:550
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