Nstein Reports Third Quarter Results

2002-10-29

Montreal, October 29, 2002 - Nstein Technologies Inc., "Nstein" (TSX:EIN) reports $915,072 in revenue earned for the first three quarters of 2002, similar to that recorded for the same period last year, at $907,782.

During its third quarter of 2002, Nstein earned revenues of $263,768, as compared with $360,464 for the same period in 2001. Losses for the company's third quarter increased to $1,353,497, or $0.013 per share, as compared with $771,072, or $0.009 per share for the same quarter last year. For the first three quarters of 2002, losses are recorded at $4,242,263, or $0.043 per share, as compared with $3,578,257, or $0.042 per share for the same period in 2001.

"Throughout the third quarter, Nstein has continued to pursue its marketing and sales efforts targeted towards the e-publishing industry. We have pursued this marketplace aggressively, turning every page towards our goal to realize successful sales with our potential customers. We have uncovered several opportunities through this strategy, and continue to expect concrete results from our efforts," comments Mario Girard, Chairman of the Board and Chief Executive Officer of Nstein.

Nstein's principal target market, the United States e-publishing industry, has been affected by the climate of economic uncertainty in the United States and continues to show signs of slowed infrastructure investment. Nstein is confident that delays in purchase decision-making are not a reflection of the company's strategy, since competitors are showing slowed sales results as well.

Operating, sales and administration expenses for the three-month period increased to $1,102,150, as compared with $641,954 for the third quarter of 2001, mainly due to expanded business activity in the United States. Research and development costs totalled $646,749 at the end of the third quarter, higher than those reported for the same period last year when they were $398,125.

Financial Results

As of September 30, 2002, total short-term assets were $5.4 million, compared to $5.7 million as at December 31, 2001. Cash and cash equivalents reached $3.6 million at the end of the third quarter of 2002, the same amount recorded, $3.6 million as at December 31, 2001. Term deposits at the end of the quarter totaled $0.9 million, compared with $1.0 million as at December 31, 2001.

Nstein's total interest bearing debt stood at $1.4 million on September 30, 2002, compared to $2.5 million on December 31, 2001.

Short-Term Outlook

During the quarter, Nstein initiated the development of a new product line targeted at large enterprises with mass volume document processing requirements. Nstein will build on its advanced processing technology already available through its flagship NserverTM product suite to serve large customers" immediate applications. "We view a favourable sales environment in this sector for the short term," states Girard.

"During the next few months, our business strategy will focus on markets that can bring us the most immediate opportunities for generating revenue. Our operational plan is committed towards deploying our resources towards achieving our business objectives and maintaining our financial autonomy."

• 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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