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
  
  
  
         Date of Report (Date of earliest event reported): January 31, 2006
     -----------------------------------------------------------------------------
  
                                    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))
  
  
  
  <PAGE>
  
  
  ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
  
  On January 31, 2006, Nestor,  Inc., a Delaware  corporation (the  "REGISTRANT"),
  entered  into a  Securities  Purchase  Agreement  (the  "AGREEMENT")  among  the
  Registrant  and fifteen  accredited  investors  pursuant to which the Registrant
  privately  placed  1,237,811  shares of its Common Stock and issued  warrants to
  purchase 371,339 shares of its Common Stock. The accredited investors purchasing
  securities of the Registrant in the transaction included Silver Star Partners I,
  LLC ("SILVER  STAR"),  an affiliate of the Company which owned a majority of the
  Registrant's  outstanding  Common Stock prior to the transaction as based on the
  most recent  Schedule 13D of Silver Star filed with the  Securities and Exchange
  Commission,  and Edward F. Heil,  who prior to the  offering was the holder of a
  secured  promissory  note issued by the  Registrant in the  principal  amount of
  $1,250,000 (the "HEIL NOTE"). In the transaction,  Silver Star purchased 220,589
  shares of the Registrant's  Common Stock and a warrant to purchase an additional
  66,176 shares.  Mr. Heil purchased  395,927  shares of the  Registrant's  Common
  Stock and a warrant to purchase an additional  118,778 shares. The selling price
  for a unit  comprising  one  share of the  Registrant's  Common  Stock  and 0.30
  warrants to purchase  Common  Stock of the  Registrant  was $4.42,  resulting in
  gross  aggregate  proceeds of $5,471,144.  The warrants are exercisable at $4.91
  per share commencing on January 31, 2006 and expire on January 31, 2009. The net
  proceeds of the offering  (after  expenses and placement  agent fees or investor
  rebates in lieu of placement agent fees) were used to repay the Heil Note at the
  closing with the balance to be used for general  corporate  purposes and working
  capital.
  
  The sale of the above described  securities  pursuant to the Agreement is exempt
  from  the  registration   requirements  of  the  Securities  Act  of  1933  (the
  "SECURITIES ACT") under Regulation D thereof. In connection with this exemption,
  the Registrant has relied on the representations and warranties of the investors
  purchasing  the  securities as contained in the  Agreement,  including that said
  investors are "accredited investors" within the meaning of Regulation D.
  
  Pursuant to the  Agreement,  the  Registrant  has agreed to file a  Registration
  Statement  registering  the resale of the Common Stock issued in the transaction
  and the Common Stock  issuable  upon  exercise of the warrants no later than the
  date that is five business days after the Registrant  files its Annual Report on
  Form 10-K for the fiscal year ended December 31, 2005. If the  Registrant  fails
  to file such a Registration Statement by that deadline,  fails to timely respond
  to any  comments  on  such  Registration  Statement  made  by the  Staff  of the
  Securities and Exchange  Commission or fails to timely request  acceleration  of
  the effectiveness of such Registration  Statement,  the Registrant has agreed to
  pay liquidated damages to the purchasers of 0.0493% of the purchase price of the
  securities per day of such failures.
  
  The  transaction  reported  herein was  approved  by the members of the Board of
  Directors of the Registrant  who are  independent  and not  affiliated  with, or
  otherwise related to, any of the investors involved in the transaction.
  
  <PAGE>
  
  ITEM 3.02.   UNREGISTERED SALES OF EQUITY SECURITIES
  
  The disclosure under Item 1.01 is incorporated herein by reference.
  
  ITEM 8.01.   OTHER EVENTS
  
  Pursuant to Rule 135c of the Securities Act, a press release with respect to the
  above  described  private  placement  which was  released by the  Registrant  on
  January 31, 2006 is appended to this Form 8-K as Exhibit 99.1.
  
  ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS
  
  (c)   Exhibits
  
  Exhibit No.     Exhibit
  
  99.1            Press Release regarding private placement.
  
  
  <PAGE>
  
  
  
  
                                     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/William B. Danzell
                                               -----------------------------------
                                               William B. Danzell
                                               President & Chief Executive Officer
  
  Date:  February 1, 2006
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "form8k.txt", "description": "FORM 8K (FINANCING)", "secsgml_size_bytes": 7017}]
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": "06570603"}, "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: 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): January 31, 2006
     -----------------------------------------------------------------------------
  
                                    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 January 31, 2006, Nestor,  Inc., a Delaware  corporation (the  "REGISTRANT"),
  entered  into a  Securities  Purchase  Agreement  (the  "AGREEMENT")  among  the
  Registrant  and fifteen  accredited  investors  pursuant to which the Registrant
  privately  placed  1,237,811  shares of its Common Stock and issued  warrants to
  purchase 371,339 shares of its Common Stock. The accredited investors purchasing
  securities of the Registrant in the transaction included Silver Star Partners I,
  LLC ("SILVER  STAR"),  an affiliate of the Company which owned a majority of the
  Registrant's  outstanding  Common Stock prior to the transaction as based on the
  most recent  Schedule 13D of Silver Star filed with the  Securities and Exchange
  Commission,  and Edward F. Heil,  who prior to the  offering was the holder of a
  secured  promissory  note issued by the  Registrant in the  principal  amount of
  $1,250,000 (the "HEIL NOTE"). In the transaction,  Silver Star purchased 220,589
  shares of the Registrant's  Common Stock and a warrant to purchase an additional
  66,176 shares.  Mr. Heil purchased  395,927  shares of the  Registrant's  Common
  Stock and a warrant to purchase an additional  118,778 shares. The selling price
  for a unit  comprising  one  share of the  Registrant's  Common  Stock  and 0.30
  warrants to purchase  Common  Stock of the  Registrant  was $4.42,  resulting in
  gross  aggregate  proceeds of $5,471,144.  The warrants are exercisable at $4.91
  per share commencing on January 31, 2006 and expire on January 31, 2009. The net
  proceeds of the offering  (after  expenses and placement  agent fees or investor
  rebates in lieu of placement agent fees) were used to repay the Heil Note at the
  closing with the balance to be used for general  corporate  purposes and working
  capital.
  
  The sale of the above described  securities  pursuant to the Agreement is exempt
  from  the  registration   requirements  of  the  Securities  Act  of  1933  (the
  "SECURITIES ACT") under Regulation D thereof. In connection with this exemption,
  the Registrant has relied on the representations and warranties of the investors
  purchasing  the  securities as contained in the  Agreement,  including that said
  investors are "accredited investors" within the meaning of Regulation D.
  
  Pursuant to the  Agreement,  the  Registrant  has agreed to file a  Registration
  Statement  registering  the resale of the Common Stock issued in the transaction
  and the Common Stock  issuable  upon  exercise of the warrants no later than the
  date that is five business days after the Registrant  files its Annual Report on
  Form 10-K for the fiscal year ended December 31, 2005. If the  Registrant  fails
  to file such a Registration Statement by that deadline,  fails to timely respond
  to any  comments  on  such  Registration  Statement  made  by the  Staff  of the
  Securities and Exchange  Commission or fails to timely request  acceleration  of
  the effectiveness of such Registration  Statement,  the Registrant has agreed to
  pay liquidated damages to the purchasers of 0.0493% of the purchase price of the
  securities per day of such failures.
  
  The  transaction  reported  herein was  approved  by the members of the Board of
  Directors of the Registrant  who are  independent  and not  affiliated  with, or
  otherwise related to, any of the investors involved in the transaction.
  ITEM 3.02.   UNREGISTERED SALES OF EQUITY SECURITIES
  
  The disclosure under Item 1.01 is incorporated herein by reference.
  
  ITEM 8.01.   OTHER EVENTS
  
  Pursuant to Rule 135c of the Securities Act, a press release with respect to the
  above  described  private  placement  which was  released by the  Registrant  on
  January 31, 2006 is appended to this Form 8-K as Exhibit 99.1.
  
  ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS
  
  (c)   Exhibits
  
  Exhibit No.     Exhibit
  
  99.1            Press Release regarding private placement.
  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/William B. Danzell
                                               -----------------------------------
                                               William B. Danzell
                                               President & Chief Executive Officer
  
  Date:  February 1, 2006