content: 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) December 10, 1996
                                  
                            NESTOR, INC.
              (Exact name of registrant as specified in charter)
                                  
                                  
  Delaware                      0-12-965            13-3163744
  (State of other jurisdiction  (Commission         IRS employer
  of incorporation no.)         file number)        identification
  
  
              One Richmond Square, Providence, Rhode Island  02906
                 (Address of principal executive offices)
  
  
  Registrant's telephone number,
  including area code:                    401-331-9640
  
  
                                N/A
  (Former name or former address, if changed since last report)
  
  
  
  
  
  
  Item 4.    (b) Changes in Registrant's Certifying Accountants.
  
       The Board of Directors of Nestor, Inc. (the "Company")
  
  approved on December 10, 1996, the appointment of Ernst & Young
  
  L.L.P. ("Ernst & Young") to serve as the Company's independent
  
  auditors for the fiscal period ending December 31, 1996 (see Item
  
  8 below), and the termination of the independent accounting firm
  
  of Gassman, Rebhun & Co., P.C. ("Gassman, Rebhun") which served
  
  as the Company's independent accountants for the fiscal year
  
  ended June 30, 1996 and a number of prior years.
  
       The Company believes there were no disagreements with
  
  Gassman, Rebhun within the meaning of Instruction 4 of Item 304
  
  of Regulation S-K on any matter of accounting principles or
  
  practices, financial statement disclosure or auditing scope or
  
  procedure in connection with the audits of the Company's
  
  financial statements for the fiscal years ended June 30, 1996,
  
  1995 and 1994 or for any subsequent interim period, which
  
  disagreements, if not resolved to their satisfaction, would have
  
  caused Gassman, Rebhun to make a reference to the subject matter
  
  of the disagreement in connection with its reports.
  
       The reports of Gassman, Rebhun on the Company's financial
  
  statements for fiscal years 1996, 1995 and 1994 or for any
  
  subsequent interim period did not contain an adverse opinion or a
  
  disclaimer of opinion, nor were they qualified or modified as to
  
  uncertainty, audit scope or accounting principles except as
  
  follows:  the fiscal 1995 and 1994 reports were modified so as to
  
  emphasize uncertainties associated with the Company's ability to
  
  continue as a going concern.
  
       During the Company's two (2) most recently completed fiscal
  
  years and through the present date, there have been no reportable
  
  events (as defined in Item 304 (a) (1) (V)  of Regulation S-K)
  
  with Gassman, Rebhun and during such periods the Company has not
  
  consulted with Ernst & Young regarding the application of
  
  accounting principles to a specified transaction, either
  
  completed or proposed, or the type of audit opinion that might be
  
  rendered on the Company's financial statements.
  
       A letter from Gassman, Rebhun addressed to the Securities
  
  and Exchange Commission is included in Exhibit 16 to this Form 8-
  
  K.  Such letter states that Gassman, Rebhun agrees with the
  
  statements made by the Company in this Item 4.
  
       
  
  Item 8.             Other Events.
  
       The Board of Directors of the Company approved on December
  
  10, 1996, the change in the Company's fiscal year end to December
  
  31 from June 30 effective December 31, 1996.  As a result, the
  
  Company intends to file Form 10-K for the transition period July
  
  1, 1996 to December 31, 1996.
  
  
  
  
  
  
                              EXHIBITS
  
  
  The Following exhibit is filed herewith:
  
  Exhibit No.         Description
  
      16              Letter of Gassman, Rebhun to the Securities and
  
                      Exchange Commission included herein pursuant
  
                      to the requirements of Item 304 (a) (3) of
  
                      Regulation S-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 thereunto duly authorized.
  
  
  Dated:  December 16, 1996          NESTOR, INC.
  
                                     (Registrant)
  
  
                                     By:
                                        /s/ Nigel P. Hebborn
                                        Chief Financial Officer
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text: 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) December 10, 1996
                                  
                            NESTOR, INC.
              (Exact name of registrant as specified in charter)
                                  
                                  
  Delaware                      0-12-965            13-3163744
  (State of other jurisdiction  (Commission         IRS employer
  of incorporation no.)         file number)        identification
  
              One Richmond Square, Providence, Rhode Island  02906
                 (Address of principal executive offices)
  
  Registrant's telephone number,
  including area code:                    401-331-9640
  
                                N/A
  (Former name or former address, if changed since last report)
  
  Item 4.    (b) Changes in Registrant's Certifying Accountants.
  
       The Board of Directors of Nestor, Inc. (the "Company")
  
  approved on December 10, 1996, the appointment of Ernst & Young
  
  L.L.P. ("Ernst & Young") to serve as the Company's independent
  
  auditors for the fiscal period ending December 31, 1996 (see Item
  
  8 below), and the termination of the independent accounting firm
  
  of Gassman, Rebhun & Co., P.C. ("Gassman, Rebhun") which served
  
  as the Company's independent accountants for the fiscal year
  
  ended June 30, 1996 and a number of prior years.
  
       The Company believes there were no disagreements with
  
  Gassman, Rebhun within the meaning of Instruction 4 of Item 304
  
  of Regulation S-K on any matter of accounting principles or
  
  practices, financial statement disclosure or auditing scope or
  
  procedure in connection with the audits of the Company's
  
  financial statements for the fiscal years ended June 30, 1996,
  
  1995 and 1994 or for any subsequent interim period, which
  
  disagreements, if not resolved to their satisfaction, would have
  
  caused Gassman, Rebhun to make a reference to the subject matter
  
  of the disagreement in connection with its reports.
  
       The reports of Gassman, Rebhun on the Company's financial
  
  statements for fiscal years 1996, 1995 and 1994 or for any
  
  subsequent interim period did not contain an adverse opinion or a
  
  disclaimer of opinion, nor were they qualified or modified as to
  
  uncertainty, audit scope or accounting principles except as
  
  follows:  the fiscal 1995 and 1994 reports were modified so as to
  
  emphasize uncertainties associated with the Company's ability to
  
  continue as a going concern.
  
       During the Company's two (2) most recently completed fiscal
  
  years and through the present date, there have been no reportable
  
  events (as defined in Item 304 (a) (1) (V)  of Regulation S-K)
  
  with Gassman, Rebhun and during such periods the Company has not
  
  consulted with Ernst & Young regarding the application of
  
  accounting principles to a specified transaction, either
  
  completed or proposed, or the type of audit opinion that might be
  
  rendered on the Company's financial statements.
  
       A letter from Gassman, Rebhun addressed to the Securities
  
  and Exchange Commission is included in Exhibit 16 to this Form 8-
  
  K.  Such letter states that Gassman, Rebhun agrees with the
  
  statements made by the Company in this Item 4.
  
       
  
  Item 8.             Other Events.
  
       The Board of Directors of the Company approved on December
  
  10, 1996, the change in the Company's fiscal year end to December
  
  31 from June 30 effective December 31, 1996.  As a result, the
  
  Company intends to file Form 10-K for the transition period July
  
  1, 1996 to December 31, 1996.
  
                              EXHIBITS
  
  The Following exhibit is filed herewith:
  
  Exhibit No.         Description
  
      16              Letter of Gassman, Rebhun to the Securities and
  
                      Exchange Commission included herein pursuant
  
                      to the requirements of Item 304 (a) (3) of
  
                      Regulation S-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 thereunto duly authorized.
  
  Dated:  December 16, 1996          NESTOR, INC.
  
                                     (Registrant)
  
                                     By:
                                        /s/ Nigel P. Hebborn
                                        Chief Financial Officer