Nstein Announces $2M Investment by Solidarity Fund QFL; Launches Knowledge Base Manager

Sep 02, 2003

Nstein Technologies Inc., a provider of software applications for managing unstructured data, has announced that the Solidarity Fund QFL (the "Fund") will make an additional investment of $2 million in Nstein's capital. The investment is to be made through a private placement of approximately 28.6 million of Nstein's treasury common shares issued at $0.07 per share. The Fund will also obtain equity warrants allowing the Fund to acquire 2 million of treasury common shares to be issued at $0.10 per share, totaling $200,000. The equity warrants would be exercisable for a period of five years. The private placement is conditional upon the concurrent disbursement by a Canadian financial institution of $1.8 million under a $ 2.25 million term loan to be obtained by the Company, in respect of which the Company expects a decision in September 2003, and is subject to other customary closing conditions including a satisfactory due diligence review by the Fund and receipt of all necessary regulatory approvals. The proceeds of the financing will be used for the commercialization of the Company's products.

The Solidarity Fund QFL presently owns 20 million common shares, representing 19% of the total 104.2 million of Nstein's issued and outstanding common shares. Upon closing of the transaction, the Fund will own 37% of Nstein's common shares or 38% upon exercising of the 2 million equity warrants. In connection with the proposed transaction, approximately 6.7 million equity warrants previously issued to the Fund will be cancelled.

Nstein has also announced the launch of Knowledge Base Manager. Two US-based firms have already licensed the Knowledge Base Manager, part of the software suite Nserver. Knowledge Base Manager is the latest addition to a family of indexing products developed by Nstein. The module is designed to automate the creation and refinement process of knowledge bases, a data set needed for automated document indexing. In a single click, users can now trigger automatic processes refining the documents' indexing precision.

(http://www.fondsftq.com), (http://www.nstein.com)