Nestor, Inc. Announces Contract Extension and Expansion With Delaware Department of Transportation

PROVIDENCE, RI–(EMWNews – August 13, 2008) – Nestor, Inc. (OTCBB: NEST), a leading

provider of advanced automated traffic enforcement solutions and services,

announced today that its wholly owned subsidiary, Nestor Traffic Systems,

Inc. (“NTS”), has entered into a contract extension and expansion with the

Delaware Department of Transportation (“DelDOT”) to continue supporting

Delaware’s Electronic Red Light Safety Program.

NTS has been providing services to DelDOT since 2004. With the contract

extension and expansion, DelDOT has committed to an extension of three

years plus a minimum of twenty additional approaches to be protected by

NTS’s patented CrossingGuard® system, which is based on advanced digital

technology and provides unique safety features and advanced client support

capabilities. The contract addendum will expand upon the past four years

of improving intersection safety and reducing the number of red-light

violations throughout the State of Delaware. Since 2004, 16 of the 20

intersections in Delaware that have CrossingGuard® installed have

experienced a decrease in total crashes.

By entering into the contract addendum, DelDOT has illustrated its

confidence that NTS is the only partner to assist DelDOT in its unequalled

commitment to safety. Delaware is currently the only statewide red-light

program in the nation. DelDOT firmly believes that NTS is the proven

vendor of the highest level of technology coupled with an unrivaled

commitment to making intersections safer and offering the best customer

support in the industry. After working with NTS for four years, DelDOT

recognizes that no other competitor could perform the kind of services with

the level of excellence that NTS has consistently demonstrated.

“We are very pleased to continue our relationship with DelDOT. By entering

into a contract extension and expansion with NTS, DelDOT has illustrated

its commitment to ensuring the safety of its citizens and all those who

drive upon its roads. We are honored to be a part of such a commitment and

will continue to provide DelDOT with the best services and support

possible,” said Clarence A. Davis, NTS Chief Executive Officer.

NTS, through its CrossingGuard® product, will continue to provide DelDOT

with the ability to capture multiple frames of red light violations,

providing law enforcement officials with the ability to objectively review

an event and the circumstances under which it occurred. With this level of

fair and objective evidence, officials can be certain that events are

reviewed in the proper context and with the highest level of integrity.

CrossingGuard® has a less than three percent court challenge rate and a

less than one percent overturn rate system-wide.

Nestor Traffic Systems provides automated traffic enforcement solutions to

state and municipal governments. Our CrossingGuard® red light

enforcement system uses patented multiple, time-synchronized videos to

capture comprehensive evidence of red light violations. In addition,

CrossingGuard® offers customers a unique Collision Avoidance™ safety

feature that can help prevent intersection collisions. We also offer a

video-based ViDAR™ speed detection and imaging system which uses

non-detectable, passive video detection and enforces multiple, simultaneous

violations bi-directionally. Nestor Traffic Systems is a distributor for

the Vitronic PoliScanSpeed™ scanning LiDAR, capable of tracking multiple

vehicles in multiple lanes simultaneously. CrossingGuard® and ViDAR™

are registered trademarks of Nestor Traffic Systems, Inc.

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, 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, further

approvals of contracted approaches, legal and legislative challenges to

automated traffic enforcement, patent protection of our technology, and

other factors discussed in Risk Factors in our most recent Annual Report on

Form 10-K filed with the SEC. Investors are advised to read our Annual

Report on Form 10-K, 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 included in this press release represent our

current views and we specifically disclaim any obligation to update these

forward-looking statements in the future.