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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>UNITED
          STATES</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>SECURITIES
          AND EXCHANGE COMMISSION</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>WASHINGTON,
          D.C.&#160;&#160;20549</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>FORM
          8-K</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>CURRENT
          REPORT</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
          to Section 13 or 15(d) of the</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Securities
          Exchange Act of 1934</font></div>
        <div><br></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Date
          of
          Report (Date of earliest event reported): July 23, 2007</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>NESTOR,
          INC.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Exact
          name of registrant as specified in its charter)</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Delaware</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(State
          or
          other jurisdiction of incorporation)</font></div>
        <div><br></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>0-12965</strong></font></div>
                </td>
                <td valign="top" width="37%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>13-3163744</strong></font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="37%" style="BORDER-BOTTOM: black">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(Commission
                    File Number)</font></div>
                </td>
                <td valign="top" width="37%" style="BORDER-BOTTOM: black">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(IRS
                    Employer Identification Number)</font></div>
                </td>
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        </div>
        <div><br></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>42
          Oriental Street; Third Floor, Providence, Rhode Island</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Address
          of principal executive offices)</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(401)
          274-5658</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Registrant&#8217;s
          telephone number, including area code)</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Not
          Applicable</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div><br></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Former
          name or former address, if changed since last report)</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Check
          the
          appropriate box below if the Form 8-K filing is intended to simultaneously
          satisfy the filing obligation of the registrant under any of the following
          provisions:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Written
                    communications pursuant to Rule 425 under the Securities Act (17
                    CFR
                    230.425)</font></div>
                </td>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        <div>
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                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings">&#168;</font></font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Soliciting
                    material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                    240.14a-12)</font></div>
                </td>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings">&#168;</font></font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pre-commencement
                    communications pursuant to Rule 14d-2(b) under the Exchange Act
                    (17 CFR
                    240.14d-2(b))</font></div>
                </td>
              </tr>
  
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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
  
              <tr valign="top">
                <td style="WIDTH: 27pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings">&#168;</font></font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pre-commencement
                    communications pursuant to Rule 13e-4(c) under the Exchange Act
                    (17 CFR
                    240.13e-4(c))</font></div>
                </td>
              </tr>
  
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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item&#160;1.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Entry
          Into a Material Definitive Agreement</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">On
          July&#160;23, 2007, Nestor, Inc. (the &#8220;<strong>Company</strong>&#8221;) entered into a
          Securities Purchase Agreement (the &#8220;<strong>Agreement</strong>&#8221;) with certain
          accredited investors, including affiliates of the Company (the
  &#8220;<strong>Purchasers</strong>&#8221;) to sell 8,532,403 shares of the Company&#8217;s common
          stock, par value $0.01 per share (the &#8220;<strong>Common Stock</strong>&#8221;) at a
          purchase price per share of $0.5802 (the &#8220;<strong>Purchase
          Price</strong>&#8221;)<strong>&#160;</strong>for an aggregate purchase price of
          $4,950,500 in a private placement pursuant to Regulation D under the Securities
          Act of 1933 (the &#8220;<strong>Transaction</strong>&#8221;).&#160;&#160;The Transaction was
          closed on July 27, 2007.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">As
          a
          predicate to the Transaction, the Company entered into separate agreements
          (&#8220;<strong>Waivers</strong>&#8221;) with holders of more that 75% of the outstanding
          principal amount of the Company&#8217;s Senior Secured Convertible Notes bearing
          interest at the rate of 7.0% (subject to adjustment) (the &#8220;<strong>7%
          Notes</strong>&#8221;) and holders of more than 66&#8532;% of holders of the Company&#8217;s 5%
          Senior Convertible Notes (the &#8220;<strong>5% Notes</strong>&#8221;) pursuant to which the
          such holders (constituting holders of a sufficient amount of the 7% Notes
          and 5%
          Notes respectively) have waived the anti-dilution provisions associated with
          their respective Notes that would have been triggered by the
          transaction.&#160;&#160;Had the Waivers not been entered into, the Company would
          have been subject to a substantial downward adjustment to the conversion
          price
          of the outstanding principal of the 7% Notes and the 5%
          Notes.&#160;&#160;Warrant exercise rates on certain outstanding warrants will
          decrease from $4.35 and $3.60 per share of Common Stock,
          respectively.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
          connection with the Transaction, we entered into a registration rights agreement
          with the Purchasers, pursuant to which we agreed to file a Registration
          Statement on Form S-3 registering for resale the shares purchased in the
          Transaction.&#160;&#160;The Registration Statement must be filed not later than
          30 business days after the earlier of (a) the date the Company files its
          Annual
          Report on Form 10-K for the fiscal year ending December 31, 2007 or (b) the
          last
          day on which the Company could timely file such Annual Report on Form 10-K
          in
          accordance with SEC rules, with penalties imposed on the Company if such
          filing
          deadline is not met, or if the registration statement is not declared effective
          by the SEC within 60 days of filing (or 90 days if subject to SEC review)
          in an
          amount equal to 0.0493% of the Purchase Price of each share held by the
          Purchaser for each day of any such failure.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
          foregoing summary of the Agreement and related agreements is qualified in
          its
          entirety by the terms of the Agreement and the exhibits thereto.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Certain
          statements herein are &#8220;forward-looking statements&#8221; made pursuant to the safe
          harbor provisions of the Private Securities Litigation Reform Act of 1995.
          Such
          forward-looking statements reflect the Company&#8217;s current expectations or beliefs
          concerning future events. Any such forward-looking statements are subject
          to
          various risks and uncertainties, including, but not limited to, the ability
          of
          the Company to secure approval from its shareholders to increase the number
          of
          shares of authorized common stock, its ability to comply with all the terms
          and
          provisions of these agreements, and any other factors which are set forth
          in the
          Company&#8217;s Annual Report on Form 10-K for the period ended December&#160;31, 2006
          and in all filings with the SEC made by the Company subsequent to the filing
          of
          the Form 10-K.&#160;&#160;The Company does not undertake to publicly update or
          revise its forward-looking statements, whether as a result of new information,
          future events or otherwise.</font></div>
        <div><br></div><br>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">-2-</font></div>
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        <div><br></div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item&#160;3.02.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Unregistered
            Sales of Equity Securities</strong></font></div>
          <div><br></div>
          <div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                      disclosures under Item&#160;1.01 are incorporated in this Item&#160;3.02
                      by reference.</font></div>
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          </div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
            shares of Common Stock issued pursuant to the Transaction (the
  &#8220;<strong>Shares</strong>&#8221;) were issued to accredited investors in a private
            placement transaction exempt from registration under the Securities Act
            of 1933,
            as amended (the &#8220;<strong>Securities Act</strong>&#8221;), pursuant to Rule 506 of
            Regulation D promulgated thereunder.</font></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
            Shares have not been registered under the Securities Act or applicable
            state
            securities laws and may not be offered or sold in the United States absent
            registration under the Securities Act and applicable state securities laws
            or an
            applicable exemption from registration requirements.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item&#160;8.01.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Other
          Events</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
          to Rule 135c of the Securities Act, a press release with respect to the
          above-described private placement was issued by the Company on July &#160;27,
          2007, a copy of which is included as Exhibit 99.1 to this Report.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
            Clarence A. Davis, a director and the Company&#8217;s Interim Chief Executive Officer
            has agreed to enter into a long-term contract with the Company to serve
            as its
            permanent Chief Executive Officer.&#160;&#160;The Company will announce the
            details of Mr. Davis&#8217;s contract once they have been
            finalized.</font></div>
        </div>
        <div><br>&#160;</div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item&#160;9.01.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
          Statements and Exhibits</strong></font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Exhibits</strong></font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Exhibit
          No.</u>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<u>Description</u></strong></font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">99.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Press
          Release dated May 27, 2007 regarding private placement.</font></div><br>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
          to the requirements of the Securities Exchange Act of 1934, as amended, the
          Registrant has duly caused this report to be signed on its behalf by the
          undersigned hereunto duly authorized.</font></div>
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                    INC.</font></div>
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                    Nigel P. Hebborn</font></div>
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                    P. Hebborn</font></div>
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                    Vice President, Treasurer and CFO</font></div>
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                    27, 2007</font></div>
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metadata_filer: {"company-data": {"conformed-name": "NESTOR INC", "cik": "0000720851", "assigned-sic": "7372", "irs-number": "133163744", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-12965", "film-number": "071007569"}, "business-address": {"street1": "42 ORIENTAL STREET", "street2": "THIRD FLOOR", "city": "PROVIDENCE", "state": "RI", "zip": "02908", "phone": "4012745658"}, "mail-address": {"street1": "42 ORIENTAL STREET", "street2": "THIRD FLOOR", "city": "PROVIDENCE", "state": "RI", "zip": "02908"}}
text: form8k.htm
  UNITED
          STATES
  SECURITIES
          AND EXCHANGE COMMISSION
  WASHINGTON,
          D.C.  20549
  FORM
          8-K
  CURRENT
          REPORT
  Pursuant
          to Section 13 or 15(d) of the
  Securities
          Exchange Act of 1934
  Date
          of
          Report (Date of earliest event reported): July 23, 2007
  NESTOR,
          INC.
  (Exact
          name of registrant as specified in its charter)
  Delaware
  (State
          or
          other jurisdiction of incorporation)
  0-12965
  13-3163744
  (Commission
                    File Number)
  (IRS
                    Employer Identification Number)
  42
          Oriental Street; Third Floor, Providence, Rhode Island
  (Address
          of principal executive offices)
  (401)
          274-5658
  (Registrant's
          telephone number, including area code)
  Not
          Applicable
  (Former
          name or former address, if changed since last report)
  Check
          the
          appropriate box below if the Form 8-K filing is intended to simultaneously
          satisfy the filing obligation of the registrant under any of the following
          provisions:
  ¨
  Written
                    communications pursuant to Rule 425 under the Securities Act (17
                    CFR
                    230.425)
  ¨
  Soliciting
                    material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                    240.14a-12)
  ¨
  Pre-commencement
                    communications pursuant to Rule 14d-2(b) under the Exchange Act
                    (17 CFR
                    240.14d-2(b))
  ¨
  Pre-commencement
                    communications pursuant to Rule 13e-4(c) under the Exchange Act
                    (17 CFR
                    240.13e-4(c))
  Item 1.01                      Entry
          Into a Material Definitive Agreement
  On
          July 23, 2007, Nestor, Inc. (the "
  Company
  ") entered into a
          Securities Purchase Agreement (the "
  Agreement
  ") with certain
          accredited investors, including affiliates of the Company (the
  "
  Purchasers
  ") to sell 8,532,403 shares of the Company's common
          stock, par value $0.01 per share (the "
  Common Stock
  ") at a
          purchase price per share of $0.5802 (the "
  Purchase
          Price
  ")
  for an aggregate purchase price of
          $4,950,500 in a private placement pursuant to Regulation D under the Securities
          Act of 1933 (the "
  Transaction
  ").  The Transaction was
          closed on July 27, 2007.
  As
          a
          predicate to the Transaction, the Company entered into separate agreements
          ("
  Waivers
  ") with holders of more that 75% of the outstanding
          principal amount of the Company's Senior Secured Convertible Notes bearing
          interest at the rate of 7.0% (subject to adjustment) (the "
  7%
          Notes
  ") and holders of more than 66⅔% of holders of the Company's 5%
          Senior Convertible Notes (the "
  5% Notes
  ") pursuant to which the
          such holders (constituting holders of a sufficient amount of the 7% Notes
          and 5%
          Notes respectively) have waived the anti-dilution provisions associated with
          their respective Notes that would have been triggered by the
          transaction.  Had the Waivers not been entered into, the Company would
          have been subject to a substantial downward adjustment to the conversion
          price
          of the outstanding principal of the 7% Notes and the 5%
          Notes.  Warrant exercise rates on certain outstanding warrants will
          decrease from $4.35 and $3.60 per share of Common Stock,
          respectively.
  In
          connection with the Transaction, we entered into a registration rights agreement
          with the Purchasers, pursuant to which we agreed to file a Registration
          Statement on Form S-3 registering for resale the shares purchased in the
          Transaction.  The Registration Statement must be filed not later than
          30 business days after the earlier of (a) the date the Company files its
          Annual
          Report on Form 10-K for the fiscal year ending December 31, 2007 or (b) the
          last
          day on which the Company could timely file such Annual Report on Form 10-K
          in
          accordance with SEC rules, with penalties imposed on the Company if such
          filing
          deadline is not met, or if the registration statement is not declared effective
          by the SEC within 60 days of filing (or 90 days if subject to SEC review)
          in an
          amount equal to 0.0493% of the Purchase Price of each share held by the
          Purchaser for each day of any such failure.
  The
          foregoing summary of the Agreement and related agreements is qualified in
          its
          entirety by the terms of the Agreement and the exhibits thereto.
  Certain
          statements herein are "forward-looking statements" made pursuant to the safe
          harbor provisions of the Private Securities Litigation Reform Act of 1995.
          Such
          forward-looking statements reflect the Company's current expectations or beliefs
          concerning future events. Any such forward-looking statements are subject
          to
          various risks and uncertainties, including, but not limited to, the ability
          of
          the Company to secure approval from its shareholders to increase the number
          of
          shares of authorized common stock, its ability to comply with all the terms
          and
          provisions of these agreements, and any other factors which are set forth
          in the
          Company's Annual Report on Form 10-K for the period ended December 31, 2006
          and in all filings with the SEC made by the Company subsequent to the filing
          of
          the Form 10-K.  The Company does not undertake to publicly update or
          revise its forward-looking statements, whether as a result of new information,
          future events or otherwise.
  -2-
  Item 3.02.                      Unregistered
            Sales of Equity Securities
  The
                      disclosures under Item 1.01 are incorporated in this Item 3.02
                      by reference.
  The
            shares of Common Stock issued pursuant to the Transaction (the
  "
  Shares
  ") were issued to accredited investors in a private
            placement transaction exempt from registration under the Securities Act
            of 1933,
            as amended (the "
  Securities Act
  "), pursuant to Rule 506 of
            Regulation D promulgated thereunder.
  The
            Shares have not been registered under the Securities Act or applicable
            state
            securities laws and may not be offered or sold in the United States absent
            registration under the Securities Act and applicable state securities laws
            or an
            applicable exemption from registration requirements.
  Item 8.01.                      Other
          Events
  Pursuant
          to Rule 135c of the Securities Act, a press release with respect to the
          above-described private placement was issued by the Company on July  27,
          2007, a copy of which is included as Exhibit 99.1 to this Report.
  Mr.
            Clarence A. Davis, a director and the Company's Interim Chief Executive Officer
            has agreed to enter into a long-term contract with the Company to serve
            as its
            permanent Chief Executive Officer.  The Company will announce the
            details of Mr. Davis's contract once they have been
            finalized.
  Item 9.01.                      Financial
          Statements and Exhibits
  (d)           Exhibits
  Exhibit
          No.
  Description
  99.1                      Press
          Release dated May 27, 2007 regarding private placement.
  -3-
  SIGNATURES
  Pursuant
          to the requirements of the Securities Exchange Act of 1934, as amended, the
          Registrant has duly caused this report to be signed on its behalf by the
          undersigned hereunto duly authorized.
  NESTOR,
                    INC.
  By:
  /s/
                    Nigel P. Hebborn
  Nigel
                    P. Hebborn
  Executive
                    Vice President, Treasurer and CFO
  Date:July
                    27, 2007
  -4-