NSTEIN POSTS SIGNIFICANT EARNINGS GROWTH

2001-08-30

Thanks to the recognition of its technology in the U.S. market

(Montreal, Aug. 30, 2001) - Nstein Technologies Inc. "Nstein" (Mtl: EIN) posted earnings of $345,651 during the second quarter of 2001. This is an increase of 71.4% compared with the first quarter of 2001 when income reached $201,667. During the second quarter of 2000, while in its start-up phase, Nstein recorded no income.

For the first two quarters of the 2001 fiscal year, the Company's income totalled $547,318. Nstein recorded no earnings during the first half of 2000.

The income generated in the second quarter is mostly attributable to the sale of a Nmedia Server user's licence to the American press group United Press International (UPI) and to Newsworld Communications, an affiliated consortium. This agreement should generate a minimum of $1.2 million in earnings for Nstein over the next five years. Half of this sum is scheduled to be paid during the first year. Income recorded during the first quarter of 2001 was earned from the sale of the Nmedia Server to the CEDROM-SNi Group.

Furthermore, the Company's loss before tax credits for the first six months of the 2001 fiscal year was $2.9 million or $0.03 per share, compared with $3.8 million or $0.05 for the same period last year. This is a decrease of 24.3 %.

Highly Encouraging Results

"These financial results are highly encouraging. They reflect the effectiveness of our marketing strategy for the United States. In this respect, our deal with UPI constitutes a major breakthrough. We are confident that we should be able to continue our sales growth in the United States over the coming months," said Mr. Mario Girard, Nstein's President and Chief Executive Officer.

"Before opting for the Nmedia Server, UPI conducted an exhaustive study of competing solutions available on the market. Nstein's solution emerged as UPI's number one choice. This comparative analysis, carried out by a world-class player, has just provided us with valuable ammunition with which to pursue our marketing efforts," said Mr. Girard. UPI, a press agency founded in 1907, has more than 700 correspondents in 90 offices globally.

The Nmedia Server, aimed at the electronic information distribution and management market, enables the user to categorize, classify and summarize large amounts of unstructured data. Thanks to Nstein's unique Linguistic DNA (TM) technology, the company enjoys a significant competitive advantage in the field of Computer-Aided Indexing (CAI). According to the Delphi Group of Boston, the electronic information management and distribution market should reach $1.0 billion US by the end of 2002.

New Logo

In order to give itself a corporate identity that truly represents the unique and innovative nature of its technology, Nstein created a new logo and launched a new corporate website on May 31st, 2001.

"The new logo puts the emphasis on our field of expertise and excellence. The "N" is now highlighted and will be a focal point of the corporate branding strategy. The sinuous lines drawn over the "N" symbolize the amount of unstructured information that, when treated by Nstein's Linguistic DNA(TM) technology, transforms into a true asset for the client company " a structured knowledge-base. This transformation is symbolized by three straight, vertical lines placed under the "N", explained Mr. Girard.

Nstein's new website (www.Nstein.com) contains a wealth of information on the company's technology and products. This information is presented in a clear and structured manner. A complete section of the site is dedicated to investors. "Thanks to the beauty and refinement of its design and the quality of its navigation system, the site enables the Internet user to explore with ease and pleasure. Our new site is a rich and effective information tool that will help us secure strong alliances, and partnerships with our present and future clients," said Mr. Girard.

About Nstein Technologies

Nstein Technologies is a public company listed on the Montreal Exchange since June 2000. It develops and markets innovative e-business solutions based on linguistic artificial intelligence.

It is now estimated that the number of web pages is growing at 10 million a day and that more than 15 billion emails are sent every day. Because Nstein's content management tools automate time-consuming and complex tasks such as content classification, XML tagging, and summarization, the company is ideally positioned to capitalize on this booming content management market.

Nstein's intensive research in computational linguistics has resulted in Linguistic DNATM technology'which combines the strengths of linguistic and statistical analysis with artificial intelligence to produce search results and organize them with unparalleled precision and relevance. Nstein currently markets its technology to the information management industry. Nstein is set to launch its second product, Nportal server (for the corporate portal market), this month. Over the coming months, Nstein's range of products will expand to include even more functionalities designed to address the rapidly growing needs of other markets, such as the e-marketplace and customer relationship management (CRM) sectors.

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