content: 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
  
  
  
                                   November 5, 2004
  --------------------------------------------------------------------------------
                  Date of Report (Date of earliest event reported)
  
  
                                    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)
  
  
                          400 MASSASOIT AVENUE, SUITE 200
                        EAST PROVIDENCE, RHODE ISLAND 02914
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
  
  
                                   (401) 434-5522
  --------------------------------------------------------------------------------
                (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 (see General Instruction A.2. below):
  
    [ ] 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))
  
  
  
  
  <PAGE>
  
  ITEM   1.01.   ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
  
         On November 5, 2004 and November 9, 2004,  Nestor,  Inc. (the  "Company")
  completed  the  sale of  $5,600,000  aggregate  principal  amount  and  $400,000
  aggregate principal amount, respectively,  of its 5% Senior Convertible Notes to
  institutional and accredited  investors  pursuant to a Note Agreement (the "Note
  Agreement").
  
         Under the Note  Agreement,  the Company issued Senior  Convertible  Notes
  (the  "Senior   Convertible   Notes")  in  the  aggregate  principal  amount  of
  $6,000,000,  convertible  into Common  Stock of the Company at the option of the
  investors at $5.82 per share. The Senior Convertible Notes accrue interest at 5%
  per year and all outstanding principal and unpaid interest is due on October 31,
  2007. The Company must make quarterly  interest-only  payments to the holders of
  the Senior  Convertible Notes until the Senior Convertible Notes are either paid
  in full or are converted into the Company's  common stock.  At the option of the
  holders,  all amounts due under the Notes may be accelerated upon certain events
  of default,  including failures to pay principal or interest when due, breach of
  covenants in the Note Agreement that remain uncured after notice,  bankruptcy of
  the Company or certain  similar events and defaults under other material  credit
  arrangements.  The Company  may, at its  option,  redeem the Senior  Convertible
  Notes in whole or in part,  at a  redemption  price of 105%  before  November 1,
  2005, 102.5% before November 1, 2006, and 101% thereafter, plus unpaid interest,
  upon 30 to 60 days prior  written  notice.  The Company is obligated to offer to
  repurchase the Senior Convertible Notes at the then-current  redemption price in
  the event of a change in control of the Company or upon the  occurrence  certain
  financing events.
  
         In connection  with the placement of the Senior  Convertible  Notes,  the
  Company issued a warrant (the "Warrant") to purchase 60,000 shares of the Common
  Stock at a per share exercise  price of $5.21.  The Warrant is  exercisable,  in
  whole or in part, until October 31, 2009.
  
         Pursuant to a registration  rights agreement  between the Company and the
  investors,  the Company  has agreed to file a  registration  statement  with the
  Securities and Exchange  Commission ("SEC") registering the resale of the shares
  of the Company's  common stock  underlying the Senior  Convertible  Notes by the
  holders thereof. Pursuant to the terms of the Warrant, the Company has agreed to
  include the resale of the shares of the Company's  common stock  underlying  the
  Warrant by the holder thereof in future registration statements upon the request
  of such holder.
  
         The  foregoing  summary  of the  Senior  Convertible  Notes  and  related
  agreements  is  qualified  in its  entirety  by the terms of the Note  Agreement
  (including  the  form of  Senior  Convertible  Note),  the  Registration  Rights
  Agreement  and  the  Warrant,   attached  as  Exhibits  10.1,   10.2  and  10.3,
  respectively,  and  incorporated  herein by  reference.  A copy of the Company's
  press release  relating to the items described above is attached as Exhibit 99.1
  and incorporated herein by reference.
  
  ITEM   2.03  CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
               UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
  
         The  disclosures  in Item  1.01 are  incorporated  in this  Item  2.03 by
  reference.
  
  ITEM   3.02  UNREGISTERED  SALE  OF  EQUITY  SECURITIES
  
         The  disclosures  in Item  1.01 are  incorporated  in this  Item  3.02 by
  reference.
  
         Senior  Convertible  Notes and the  Warrant  were  issued  to  accredited
  investors in a private placement  transaction exempt from registration under the
  Securities  Act of  1933,  as  amended,  pursuant  to Rule 506 of  Regulation  D
  promulgated  thereunder.  The Notes were sold for 100% of their principal amount
  and the placement agents received a 7% commission.
  
         The Senior  Convertible  Notes and the Warrant  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   9.01  FINANCIAL STATEMENTS AND EXHIBITS.
  
               (c) Exhibits
  
                   See Exhibit Index attached to this Current Report on Form 8-K.
  
  
  
  
  
  
  
  
  <PAGE>
  
  
                                     SIGNATURES
  
  
         Pursuant to the requirements of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
                                         NESTOR, INC.
                                         (Registrant)
  
  
  
                                         By: /s/ Claire M. Iacobucci
                                            --------------------------------------
                                            Claire M. Iacobucci
                                            Treasurer and Chief Financial Officer
  
  
  Dated:     November 12, 2004
  
  
  
  <PAGE>
  
  
  
  
                                    EXHIBIT INDEX
                                    -------------
  
  
         Exhibit Number                    Description
         --------------                    -----------
  
           10.1               Note Agreement between Nestor, Inc. and the
                              Purchasers, dated November 5, 2004.
  
           10.2               Registration Rights Agreement between Nestor, Inc.
                              and the Purchasers, dated November 5, 2004.
  
           10.3               Warrant to Purchase Common Stock
  
           99.1               Press Release
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text: 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
  
                                   November 5, 2004
  --------------------------------------------------------------------------------
                  Date of Report (Date of earliest event reported)
  
                                    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)
  
                          400 MASSASOIT AVENUE, SUITE 200
                        EAST PROVIDENCE, RHODE ISLAND 02914
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
  
                                   (401) 434-5522
  --------------------------------------------------------------------------------
                (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 (see General Instruction A.2. below):
  
    [ ] 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 November 5, 2004 and November 9, 2004,  Nestor,  Inc. (the  "Company")
  completed  the  sale of  $5,600,000  aggregate  principal  amount  and  $400,000
  aggregate principal amount, respectively,  of its 5% Senior Convertible Notes to
  institutional and accredited  investors  pursuant to a Note Agreement (the "Note
  Agreement").
  
         Under the Note  Agreement,  the Company issued Senior  Convertible  Notes
  (the  "Senior   Convertible   Notes")  in  the  aggregate  principal  amount  of
  $6,000,000,  convertible  into Common  Stock of the Company at the option of the
  investors at $5.82 per share. The Senior Convertible Notes accrue interest at 5%
  per year and all outstanding principal and unpaid interest is due on October 31,
  2007. The Company must make quarterly  interest-only  payments to the holders of
  the Senior  Convertible Notes until the Senior Convertible Notes are either paid
  in full or are converted into the Company's  common stock.  At the option of the
  holders,  all amounts due under the Notes may be accelerated upon certain events
  of default,  including failures to pay principal or interest when due, breach of
  covenants in the Note Agreement that remain uncured after notice,  bankruptcy of
  the Company or certain  similar events and defaults under other material  credit
  arrangements.  The Company  may, at its  option,  redeem the Senior  Convertible
  Notes in whole or in part,  at a  redemption  price of 105%  before  November 1,
  2005, 102.5% before November 1, 2006, and 101% thereafter, plus unpaid interest,
  upon 30 to 60 days prior  written  notice.  The Company is obligated to offer to
  repurchase the Senior Convertible Notes at the then-current  redemption price in
  the event of a change in control of the Company or upon the  occurrence  certain
  financing events.
  
         In connection  with the placement of the Senior  Convertible  Notes,  the
  Company issued a warrant (the "Warrant") to purchase 60,000 shares of the Common
  Stock at a per share exercise  price of $5.21.  The Warrant is  exercisable,  in
  whole or in part, until October 31, 2009.
  
         Pursuant to a registration  rights agreement  between the Company and the
  investors,  the Company  has agreed to file a  registration  statement  with the
  Securities and Exchange  Commission ("SEC") registering the resale of the shares
  of the Company's  common stock  underlying the Senior  Convertible  Notes by the
  holders thereof. Pursuant to the terms of the Warrant, the Company has agreed to
  include the resale of the shares of the Company's  common stock  underlying  the
  Warrant by the holder thereof in future registration statements upon the request
  of such holder.
  
         The  foregoing  summary  of the  Senior  Convertible  Notes  and  related
  agreements  is  qualified  in its  entirety  by the terms of the Note  Agreement
  (including  the  form of  Senior  Convertible  Note),  the  Registration  Rights
  Agreement  and  the  Warrant,   attached  as  Exhibits  10.1,   10.2  and  10.3,
  respectively,  and  incorporated  herein by  reference.  A copy of the Company's
  press release  relating to the items described above is attached as Exhibit 99.1
  and incorporated herein by reference.
  
  ITEM   2.03  CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
               UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
  
         The  disclosures  in Item  1.01 are  incorporated  in this  Item  2.03 by
  reference.
  
  ITEM   3.02  UNREGISTERED  SALE  OF  EQUITY  SECURITIES
  
         The  disclosures  in Item  1.01 are  incorporated  in this  Item  3.02 by
  reference.
  
         Senior  Convertible  Notes and the  Warrant  were  issued  to  accredited
  investors in a private placement  transaction exempt from registration under the
  Securities  Act of  1933,  as  amended,  pursuant  to Rule 506 of  Regulation  D
  promulgated  thereunder.  The Notes were sold for 100% of their principal amount
  and the placement agents received a 7% commission.
  
         The Senior  Convertible  Notes and the Warrant  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   9.01  FINANCIAL STATEMENTS AND EXHIBITS.
  
               (c) Exhibits
  
                   See Exhibit Index attached to this Current Report on Form 8-K.
  SIGNATURES
  
         Pursuant to the requirements of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                         NESTOR, INC.
                                         (Registrant)
  
                                         By: /s/ Claire M. Iacobucci
                                            --------------------------------------
                                            Claire M. Iacobucci
                                            Treasurer and Chief Financial Officer
  
  Dated:     November 12, 2004
  EXHIBIT INDEX
                                    -------------
  
         Exhibit Number                    Description
         --------------                    -----------
  
           10.1               Note Agreement between Nestor, Inc. and the
                              Purchasers, dated November 5, 2004.
  
           10.2               Registration Rights Agreement between Nestor, Inc.
                              and the Purchasers, dated November 5, 2004.
  
           10.3               Warrant to Purchase Common Stock
  
           99.1               Press Release