Nestor, Inc. Announces CrossingGuard Agreeement With Savannah Economic Development Authority

PROVIDENCE, R.I.--Sept. 1, 2004--Nestor, Inc. (OTC: NESO) is pleased to announce that its subsidiary, Nestor Traffic Systems, Inc. (NTS), has entered into an agreement with the Savannah Economic Development Authority (SEDA) to provide a CrossingGuard(R) traffic signal violation detection system and related services in Chatham County, Georgia. According to the terms set forth in the agreement, NTS will supply and install equipment and software as well as provide user training and support services for the program.

William B. Danzell, Chief Executive Officer of Nestor, Inc. stated, "We are excited about this opportunity to showcase our CrossingGuard system in Chatham County. It will be the first system in Georgia that combines multiple videos, time-synchronized images, and non-invasive technology. The CrossingGuard(R) system provides officials with the tools needed to accurately evaluate what happened at the intersection, resulting in few contested citations, increased motorist compliance, and community support. In addition, we offer a patented Collision Avoidance safety feature that can help prevent accidents caused by red light runners."

NTS' CrossingGuard system offers advanced digital-video technology, a unique Collision Avoidance(TM) safety feature and advanced client support capabilities. CrossingGuard's multiple, time-synchronized images give police officers and court officials a complete picture of what actually happened at the intersection, enabling them to make accurate, objective decisions.

Nestor, Inc., through its wholly owned subsidiary, Nestor Traffic Systems, is a leader in providing innovative, video-based monitoring systems and services for traffic safety. Its products incorporate Nestor's patented technology into intelligent, real-time solutions that promote traffic efficiency and intersection safety.

Statements in this press release about future expectations, plans and prospects for Nestor, including statements containing the words "expects," "will," "results," and similar expressions, constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements and investors should not place undue reliance on our forward-looking 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, patent protection of our technology, and other factors discussed in Exhibit 99.1 to our most recent annual report filed with the SEC. The forward-looking statements included in this press release represent our current views and we specifically disclaim any obligation to update these forward-looking statements in the future.

CrossingGuard is a registered trademark of Nestor Traffic Systems, Inc. For more information, call (401) 434-5522 or visit www.nestor.com.