Nstein's Income Continues to Grow in 3rd Quarter

2001-10-26

Thanks to two important sales in the US market

Montreal (Quebec), Friday, October 26, 2001 - The third-quarter of 2001 enabled Nstein Technologies Inc. "Nstein" (CDNX: EIN) to strengthen its strategic position in the United States, the Company's target market. This resulted in the closing of two additional sales of user's licences for the nserver, of which one was sold to the American Psychological Association for $450,000. The APA, located in Washington, DC, is the largest association of psychologists in the world. The nserver will allow it to automatically classify and index data from the APA's documentation center, the most renowned in the psychology world.

The other sale of the nserver was made to Interactive Business Research (IBR), a Los Angeles-based company that provides on-line services and research and training tools for businesses. This agreement has good commercial potential since it makes Nstein an original equipment manufacturer (OEM) for IBR. The agreement consists of an initial sale of a software development licence for $115,000. The deal also includes the payment of royalties to Nstein on future sales of the system developed by IBR. The solution provided by Nstein will enable IBR to create a competively-priced, quick and precise research tool designed for specialized databases.

More than two ordinary sales deals

"The last two sales of the third-quarter testify to the recognition that Nstein has now attained in the electronic publishing market in the United States. This recognition is largely due to our recently announced sale of the nserver to United Press International (UPI), a media giant. This sale, our very first in the U.S. market, was closed after UPI conducted a thorough benchmark-analysis of the various competing solutions on the market " an analysis from which Nstein came out the big winner," underlined, Mr. Mario Girard, President and Chief Executive Officer of Nstein.

In addition to facilitating the sales to the APA and IBR, the UPI deal made a loud echo in the electronic publishing industry. Since then, Nstein has been kept busy carrying out multiple negotiations with other potential clients. The Company is confident that it will continue making inroads into the U.S. market during the coming months.

To consolidate its U.S. breakthrough, Nstein also recently announced the appointment of two top executives who will be dedicated to business development in the U.S. market. They are Marty Reiner, who has taken the position of Vice President, Sales, and Mark Adrian who is the new Director, Sales. Mr. Reiner and Mr. Adrian were both previously employed at Webmind, a company specialized in the development of artificial intelligence-based technology.

In order to support its future development projects, Nstein has also undertaken a round of financing. "The timing is just right because our technology now enjoys strong recognition in the industry," noted Mr. Girard.

Income Growth

During the third-quarter of 2001, Nstein's sales growth continued, recording income of just over $360,000. For the first nine months of the year, the Company's income totaled more than $907,000, compared to no income for the previous year.

"We are satisfied with the constant increase in income. This is a trend that we hope will continue into the future," added Mr. Girard.

For the first three-quarters of the 2001 financial year, operating, selling and administrative expenses reached $2.6 million, compared to $2.1 million for the same period in 2001. Research and development costs were at $1.4 million, down from $2.5 million in 2000.

The net loss for the nine-month period ended Sept. 30, 2001 was $3.6 million, or $0.042 per share, compared to $4.3 million, or $0.058 per share last year.
As of Sept. 30, 2001, cash and cash equivalents totaled $2.9 million, while term deposits amounted to $1.0 million. On the same date, the Company's debt added up to $2.7 million.

About Nstein Technologies

Nstein Technologies is a public company listed on the Canadian Venture Exchange (CDNX). The company develops and markets innovative content management solutions based on linguistic artificial intelligence. Nstein's content management solutions automate time-consuming and complex tasks such as content classification as well as XML tagging and summarization. The company's nserver products provide a revolutionary leap in effectiveness and cost reduction for e-publishers, portals, CRM solutions and e-marketplaces.

Nstein's intensive research in computational linguistics has resulted in Linguistic DNA technology'which combines the strengths of linguistic and statistical with artificial intelligence extract meaning form even short, unstructured documents and organize them with unparalleled precision and relevance. Nstein currently markets its technology to the e-publishing industry and is set to rollout new products for portals, e-marketplace and customer relationship management (CRM) solutions over the next two years. For further information on Nstein Technologies inc., please visit www.nstein.com.

• The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
• Any statement that appears prospective shall not be interpreted as such.

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