SALEM, Utah--(BUSINESS WIRE)--Nov. 19, 2001

In a significant move for the renewable energy industry, International Automated Systems, Inc. (IAUS.OB) has signed a letter of intent to license its patent-pending "bladeless" Propulsion Turbine to The Hydrogen Renewable Energy Enterprise, LLC, (THREE) a Hawaiian-based company that develops projects to convert renewable energies into electricity.

THREE has been actively involved in Hawaii's pioneering energy legislation, which encourages use of the islands' renewable energy. THREE's president, Jack Dean who has spent more than 30 years in the energy industry, is well-known in connection with renewable energy production and an author of works on steam turbine and power plant principles.

"After witnessing the operation of a prototype in Utah, I am convinced of the turbine's capabilities and can envision its application among a variety of energy projects," said Dean. "In Hawaii, we must always consider the most efficient use of our land. Because of this, we focus on evaluating technologies which increase the conversion efficiency of energy-to-power to best meet the electrical needs of the islands."

IAS's Propulsion Turbine, which obviates the need for expensive, high-maintenance blades characteristic of traditional turbines, has been tested both in labs and on-site at a major utility company's geothermal plant. Results indicate that the Propulsion Turbine can generate a kilowatt of energy for a far lower cost than is possible with traditional geothermal turbines.

Under the terms of the agreement, IAS will provide turbine/generator packages for projects developed by THREE. In turn, THREE will have the exclusive right to acquire the IAS turbine/generator package for all applications in the State of Hawaii, including geothermal and solar. Under the arrangements outlined in the letter of intent, THREE will pay a fee to IAS for 20 years for the turbine/generator packages. That fee will be based upon kilowatt-hours of power sold.

According to Dean, the IAS turbine could have an enormous effect on the renewable energy production. "Whenever energy conversion efficiency increases, there is a positive environmental impact," said Mr. Dean. "In this case, when the increased efficiency is on the order of magnitude that may be possible with this new IAS turbine, that positive impact becomes significant and impossible to overlook."

Propulsion Turbine Eliminates Need for Costly Equipment

At geothermal plants where traditional turbines are used, hot water from thousands of feet underground is forced up a well before entering a flashing chamber where it is separated into steam. This steam is then channeled into the turbine, hitting the blades, which turn an output shaft, which drives a generator. Cooling towers are needed to allow steam to flow through the turbine. It is in these cooling towers where much of the water is lost, a significant problem in many areas of the country where water supply is limited.

IAS's turbine differs from traditional turbines because it obviates the need for flashing chambers, turbine blades and cooling towers, which are inefficient and costly to manufacture and maintain.

The Propulsion Turbine uses a jet nozzle to channel the hot water from the well directly onto the output shaft -- a "bladeless" turbine. IAS estimates the cost of building its turbine for a geothermal plant to be a fraction of the cost of manufacturing a traditional turbine.

The company envisions its turbine as a complement to existing geothermal or other power plant facilities as a way to produce additional energy at lower cost.

We are excited by the prospect of proving that our turbine can deliver less expensive energy, and confident that we can show the significance of the Propulsion Turbine's design," said Neldon Johnson, president and CEO of International Automated Systems. "We believe that our turbine can enhance electric production, at geothermal and other types of plants."

About International Automated Systems, Inc. (; IAUS:OB)

Founded in 1988, International Automated Systems, Inc., develops high-technology products for diverse markets such as energy production, wireless communications, consumer purchasing and financial transactions. The company, founded by a former AT&T communications engineer, is based in Salem, Utah.

About The Hydrogen Renewable Energy Enterprise, LLC

The Hydrogen Renewable Energy Enterprise, LLC, core business is to develop renewable energy projects to reduce the reliance of businesses and residents in Hawaii upon fossil fuel. Its projects are designed to convert wind, solar and geothermal energy to electrical power for use by the local utility and for the production of hydrogen as a fossil fuel replacement for transportation and distributed generation. The company, founded by a former vice president/general manager of Hawaii's first commercial geothermal facility, is based in Hilo, Hawaii.

Note: Statements contained in this press release that are not strictly historical are forward-looking within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are made based upon information available to the company at the time, and the company assumes no obligation to update or revise such forward-looking statements. Editors and investors are cautioned that such forward-looking statements invoke risk and uncertainties that may cause the company's actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to, demand for the company's product both domestically and abroad, the company's ability to continue to develop its market, general economic conditions, and other factors that may be more fully described in the company's literature and periodic filings with the Securities and Exchange Commission.