Exhibit 99.1

                          NESTOR, INC.

  SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE PRIVATE
                           SECURITIES
                  LITIGATION REFORM ACT OF 1995

         CERTAIN CAUTIONARY STATEMENTS AND RISK FACTORS

    Nestor, Inc. and its subsidiaries (collectively, the Company)
or  their representatives from time to time may make or may  have
made  certain  forward-looking statements, whether orally  or  in
writing,  including without limitation, any such statements  made
or  to  be  made  in  the  Management's Discussion  and  Analysis
contained in its various SEC filings or orally in conferences  or
teleconferences.   The  Company  wishes  to  ensure   that   such
statements  are accompanied by meaningful cautionary  statements,
so as to ensure to the fullest extent possible the protections of
the  safe harbor established in the Private Securities Litigation
Reform Act of 1995.

     ACCORDINGLY, THE FORWARD-LOOKING STATEMENTS ARE QUALIFIED IN
THEIR  ENTIRETY  BY  REFERENCE TO  AND  ARE  ACCOMPANIED  BY  THE
FOLLOWING  MEANINGFUL CAUTIONARY STATEMENTS  IDENTIFYING  CERTAIN
IMPORTANT  FACTORS  THAT  COULD CAUSE ACTUAL  RESULTS  TO  DIFFER
MATERIALLY FROM THOSE IN SUCH FORWARD-LOOKING STATEMENTS.

     This  list of factors is likely not exhaustive. The  Company
operates  in  a rapidly changing and evolving business  involving
electronic  commerce  and payments, and  new  risk  factors  will
likely  emerge.  Management cannot predict all of  the  important
risk  factors, nor can it assess the impact, if any, of such risk
factors  on  the Company's business or the extent  to  which  any
factor,  or  combination of factors, may cause actual results  to
differ materially from those in any forward-looking statements.

     ACCORDINGLY,  THERE CAN BE NO ASSURANCE THAT FORWARD-LOOKING
STATEMENTS  WILL BE ACCURATE INDICATORS OF FUTURE ACTUAL  RESULTS
AND  IT  IS  LIKELY THAT ACTUAL RESULTS WILL DIFFER FROM  RESULTS
PROJECTED IN FORWARD-LOOKING STATEMENTS. SUCH DIFFERENCES MAY  BE
MATERIAL.

Nestor is dependent on its PRISM products

          Nestor has derived a substantial majority of its  total
revenues from licensing its PRISM family of software products and
providing services and maintenance related to those products. The
PRISM  products and related services and maintenance are expected
to  provide  the majority of Nestor's revenues in the foreseeable
future.  Nestor's  results  will  depend  upon  continued  market
acceptance of its PRISM products and related services as well  as
Nestor's ability to continue to adapt and modify them to meet the
changing needs of its customers. Any reduction in demand for,  or
increase  in  competition with respect to, PRISM  products  would
have  a  material adverse effect on Nestor's financial  condition
and results of operations.

Nestor is subject to risks of conducting international operations

          Nestor  has  derived a material portion  of  its  total
revenues  from  sales  to customers outside  the  United  States.
International operations generally are subject to certain  risks,
including:

         -  difficulties in staffing and management,

         -  reliance on independent distributors,

         -  fluctuations in foreign currency exchange rates,

         -  compliance with foreign regulatory requirements,

         -  variability of foreign economic conditions, and

         -  changing restrictions imposed by U.S. export laws.

There can be no assurance that Nestor will be able to manage  the
risks   related   to  selling  its  products  and   services   in
international markets.

Nestor is dependent on the banking industry

           Nestor's  business  is  concentrated  in  the  banking
industry,  making  Nestor  susceptible  to  a  downturn  in  that
industry.  For example, a decrease in bank spending for  software
and related services could result in a smaller overall market for
electronic payment software. Furthermore, banks are continuing to
consolidate,  decreasing the overall potential number  of  buyers
for  Nestor's  products and services. These factors  as  well  as
others  negatively affecting the banking industry  could  have  a
material  adverse  effect  on Nestor's  financial  condition  and
results of operations.

Nestor must manage its growth effectively

          Nestor  is  experiencing a period of  growth  which  is
placing  demands  on  its  managerial and  operations  resources.
Nestor's  inability  to  manage  its  growth  effectively  or  to
maintain  its  current  level of growth  could  have  a  material
adverse  effect  on  its  financial  condition  and  results   of
operations.

Nestor may not be able to attract and retain key personnel

          Nestor's  success depends on certain of  its  executive
officers,  the loss of one or more of whom could have a  material
adverse  effect  on Nestor's financial condition and  results  of
operations. None of Nestor's U.S.-based executive officers  is  a
party to an employment agreement. Nestor believes that its future
success also depends on its ability to attract and retain highly-
skilled technical, managerial and marketing personnel, including,
in  particular, additional personnel in the areas of research and
development  and technical support. Competition for personnel  is
intense. There can be no assurance that Nestor will be successful
in attracting and retaining the personnel it requires.

The   market  for  software  and  related  services   is   highly
competitive

          Many applications software vendors offer products  that
are directly competitive with PRISM and other products of Nestor.
Nestor  also  experiences  competition  from  software  developed
internally by potential customers and experiences competition for
its consulting services from professional services organizations.
In  addition,  processing companies provide services  similar  to
those  made  possible  by  Nestor's products.  Many  of  Nestor's
current  and  potential  competitors have  significantly  greater
financial,  marketing, technical and other competitive  resources
than   Nestor.  Current  and  potential  competitors,   including
providers   of   transaction-based   software,   processing,   or
professional  services,  may establish cooperative  relationships
with   one  another  or  with  third  parties  to  compete   more
effectively  against  Nestor.  It  is  also  possible  that   new
competitors may emerge and acquire market share. In either  case,
Nestor's  financial condition and results of operations could  be
adversely affected.

Nestor's   future  success  depends  on its  ability   to  timely
develop  and market product enhancements and new products.

          The market for software in general is characterized  by
rapid change in computer hardware and software technology and  is
highly  competitive with respect to the need for  timely  product
innovation  and new product introductions. Nestor  believes  that
its  future  success  depends upon its  ability  to  enhance  its
current  applications and develop new products that  address  the
increasingly  complex needs of customers. In  particular,  Nestor
believes that it must continue to respond quickly to users' needs
for  additional  functionality and multi-platform  support.   The
introduction  and marketing of new or enhanced products  requires
Nestor to manage the transition from current products in order to
minimize  disruption in customer purchasing patterns.  There  can
be no assurance that Nestor will continue to be successful in the
timely  development and marketing of product enhancements or  new
products  that respond to technological advances,  that  its  new
products  will  adequately  address the  changing  needs  of  the
domestic  and  international markets or that it will successfully
manage the transition from current products.

          Nestor  is continually developing new products, product
versions  and  individual  features  within  a  complex  software
system.  Development projects can be lengthy and are  subject  to
changing  requirements, programming difficulties  and  unforeseen
factors  which  can result in delays in the introduction  of  new
products  and  features.  Delays could have  a  material  adverse
effect on Nestor's financial condition and results of operations.

          In  addition, new products, versions or features,  when
first  released  by Nestor, may contain undetected  errors  that,
despite  testing by Nestor, are discovered only after  a  product
has  been  installed and used by customers. To  date,  undetected
errors have not caused significant delays in product introduction
and  installation  or required substantial design  modifications.
However,  there  can  be  no assurance  that  Nestor  will  avoid
problems of this type in the future.

Nestor is dependent on proprietary technology

          Nestor relies on a combination of patents, trade secret
and  copyright  laws,  nondisclosure and  other  contractual  and
technical  measures  to  protect its proprietary  rights  in  its
products. There can be no assurance that these provisions will be
adequate to protect its proprietary rights. In addition, the laws
of certain foreign countries do not protect intellectual property
rights  to  the  same  extent as the laws of the  United  States.
Although Nestor believes that its intellectual property rights do
not  infringe upon the proprietary rights of third parties, there
can   be   no  assurance  that  third  parties  will  not  assert
infringement claims against Nestor.

Fluctuations  in  quarterly  operating  results  may  result   in
volatility in Nestor's stock price

          Nestor's  quarterly revenues and operating results  may
fluctuate depending on the timing of executed contracts,  license
upgrades  and  the  delivery of contracted  business  during  the
quarter.  In addition, quarterly operating results may  fluctuate
due  to  the  extent of commissions associated with  third  party
product sales, timing of Nestor's hiring of additional staff, new
product development and other expenses. No assurance can be given
that operating results will not vary due to these factors.

Our  sales cycles vary significantly which makes it difficult  to
plan our expenses and forecast our results

         Nestor's sales cycles typically range from six to twelve
months,  but  may  take  longer.  It is  therefore  difficult  to
predict the quarter in which a particular sale will occur and  to
plan  our  expenses accordingly.  The period between our  initial
contact  with  potential  clients  and  their  licensing  of  our
products and services varies due to several factors, including:

         -  the complex nature of our products and services,

         -  our clients' budget cycles,

           -   our  clients'  internal  evaluation  and  approval
requirements, and

   -     our clients' delays of licensing due to announcements or
   planned  introductions  of new products  or  services  by  our
   competitors.

          Any  delay or failure to complete sales in a particular
quarter  could  reduce our revenue in that quarter,  as  well  as
subsequent  quarters  over which revenue  or  the  license  would
likely  be recognized.  If our sales cycles unexpectedly lengthen
in  general or for one or more large engagements, it would  delay
our  receipt of the related revenue.  If we were to experience  a
delay  of several weeks or longer on a large engagement, it could
harm our ability to meet our forecasts for a given quarter.

Customers may cancel contracts

          Nestor  derives  a  substantial portion  of  its  total
revenues from maintenance fees and monthly software license  fees
pursuant to contracts which the customer has the right to cancel.
A  substantial  number of cancellations of these  maintenance  or
monthly  license  fee  contracts would have  a  material  adverse
effect on Nestor's financial condition and results of operations.

Nestor's stock price may be volatile

          The  stock  market  has from time to  time  experienced
extreme  price and volume fluctuations, particularly in the  high
technology  sector,  which  have  often  been  unrelated  to  the
operating  performance of particular companies.  Any announcement
with  respect to any variance in revenue or earnings from  levels
generally  expected  by securities analysts for  a  given  period
could  have  an immediate and significant effect on  the  trading
price  of the Class A Common Stock. In addition, factors such  as
announcements  of technological innovations or  new  products  by
Nestor,  its  competitors  or other third  parties,  as  well  as
changing  market conditions in the computer software or  hardware
industries, may have a significant impact on the market price  of
the Class A Common Stock.

We  cannot  predict our future capital needs, and we may  not  be
able to secure additional financing in the future

          We  believe  that  our existing cash, working  capital,
backlog,  and  line  of  credit will be sufficient  to  meet  our
anticipated   cash   needs  for  working  capital   and   capital
expenditures  for at least the next 12 months.  However,  we  may
need  to  raise  additional  funds in  the  future  to  fund  our
operations, to expand or enhance our products and services or  to
respond  to  competitive  pressures or  perceived  opportunities.
Nestor  cannot  be  assured  that additional  financing  will  be
available on acceptable terms, or at all.  If adequate funds  are
not  available  or  not available on acceptable  terms,  Nestor's
business and financial results may suffer.

Nestor's growth strategy involves numerous risks and challenges

          Nestor has expanded and may seek to continue to  expand
its  operations through the acquisition of additional  businesses
that  complement  its  core  skills and  have  the  potential  to
increase its overall value. Nestor's future growth may depend, in
part,  upon  the  continued success of its acquisition  strategy.
Nestor  may not be able to successfully identify and acquire,  on
favorable terms, compatible businesses. Acquisitions involve many
risks,  which  could have a material adverse effect  on  Nestor's
business,   financial  condition  and  results   of   operations,
including:

     -      Acquired   businesses  may  not  achieve  anticipated
     revenues, earnings or cash flow;

     -    Integration of acquired businesses and technologies may
     not  be  successful  and Nestor may not realize  anticipated
     economic, operational and other benefits in a timely manner,
     particularly if Nestor acquires a business in  a  market  in
     which  Nestor has limited or no current expertise or with  a
     corporate culture different from Nestor's;

     -    Potential dilutive effect on Nestor's stockholders from
     continued  issuance  of Common Stock  as  consideration  for
     acquisitions;

     -     Adverse  effect on net income of amortization  expense
     related  to goodwill and other intangible assets  and  other
     acquisition-related  charges,  costs  and  expenses  on  net
     income;

     -     Competing  with other companies, many  of  which  have
     greater  financial and other resources to acquire attractive
     companies  makes  it  more  difficult  to  acquire  suitable
     companies on acceptable terms; and

     -     Disruption of Nestor's existing business,  distraction
     of   management  and  other  resources  and  difficulty   in
     maintaining  Nestor's current business  standards,  controls
     and procedures.


Directors,   officers   and   principal   shareholders   exercise
significant control over the Company.

         Nestor's directors, officers, and principal shareholders
who  own  greater  than 5% of the outstanding common  stock,  and
entities affiliated with them, beneficially own approximately 49%
of  our common stock.  These shareholders, acting together,  will
be  able to exert substantial influence over all matter requiring
approval  by  Nestor's shareholders.  These matters  include  the
election  and  removal of directors and any merger, consolidation
or  sale  of  all or substantially all or Nestor's assets.   This
concentration  of  ownership may have  the  effect  of  delaying,
deferring  or  preventing  a change in  control,  or  impeding  a
merger,  consolidation, takeover or business combination even  if
the transaction might be beneficial to Nestor's shareholders.