International Automated Systems License its New Breakthrough Turbine Technology to The Hydrogen Renewable Energy Enterprise, LLC<br><br>

    SALEM, Utah--Aug. 13, 2002--International Automated Systems Inc. (IAUS.OB) ("IAS") Tuesday announced that it has signed an agreement to license its patent-pending "bladeless" Propulsion Turbine for the State of Hawaii to The Hydrogen Renewable Energy Enterprise, LLC (THREE).<br><br>

    THREE is a Hawaiian-based company that has been actively involved in Hawaii's pioneering energy legislation, which encourages use of the islands' renewable energy. <br><br>

    THREE's president, Jack Dean, who has spent more than 35 years in the energy industry, is well known in connection with renewable energy production and an author and co-author of several publications covering subjects ranging from steam turbine principles and water induction, to power plant principles for plant operators and engineers.<br><br>

    IAS' new Propulsion Turbine is a breakthrough technology, which some professionals believe will revolutionize electrical power generation, and hydrogen fuel production for automobiles and fuel cells.<br><br>

    Tests have been conducted by IAS at a university laboratory, at various power plant facilities, and at its own laboratory during the past 18 months. Conservative numbers demonstrate remarkable advantages in areas of cost, maintenance, size, efficiency and versatility over today's expensive conventional turbine under the same conditions.<br><br>

    IAS' advantages will likely make a significant global impact by economically producing power using renewable energy such as solar thermal and geothermal. Utilizing these free, and practically unlimited sources of energy has previously been cost prohibitive. IAS' new breakthrough technology opens vast new doors in the renewable energy market. <br><br>

    With such advancements, renewable resources can be used to economically produce electricity, heat, and cold air for homes and businesses, or clean hydrogen fuel for automobiles and fuel cells. The turbine is small enough for many homes and businesses to house their own mini power plant.<br><br>

    Power industry experts predict that, based upon a 2-3 percent per annum increase over the next 10-20 years, more than $3 trillion in present dollars (not accounting for inflation) will be needed to build plants sufficient to meet the world's growing needs. This $3 trillion does not include the cost of transmission and distribution networks.<br><br>

    "There are two unique features that give this turbine an unmatched versatility: its physical construction and its use of multiple-phase fluid," said Dean. "Use of this new Propulsion Turbine technology will offer many cost and energy saving opportunities for the people of Hawaii, and thus, move Hawaii closer to a goal of energy self-sufficiency based upon renewable energy and hydrogen."<br><br>

    "We are very pleased to have finalized a relationship with THREE," said Neldon Johnson, president and CEO of International Automated Systems Inc. "Jack Dean has a valuable and seasoned background in the power industry. From his many years of experience and study, he has an in-depth knowledge of steam turbine principles, power plant design and operations, and economics of the power industry. <br><br>

    "We look forward to working with THREE."<br><br>

    About International Automated Systems Inc. (www.iaus.com)<br><br>

    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.<br><br>

    About The Hydrogen Renewable Energy Enterprise, LLC<br><br>

    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. <br><br>

    Its projects are designed to use wind, solar and geothermal energy to produce electrical power for the local utility and for the production of hydrogen as a fossil fuel replacement for transportation and distributed generation, or to produce combined heat and power, as a cogeneration system, for business and residential customers. <br><br>

    The company, founded by a former vice president/general manager of Hawaii's first commercial geothermal facility, is based in Hilo, Hawaii.<br><br>

    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.