International Automated Systems Inc. Announces the Construction of the World's First...<br><br>

Date: Wednesday, August 27 2003 <br><br>

SALEM, Utah--(BUSINESS WIRE)--Aug. 27, 2003 <br><br>

International Automated Systems Inc. (IAUS.OB) ("IAS") announced today that it has signed an agreement with The Hydrogen Renewable Energy Enterprise, LLC ("THREE") to build the world's first "bladeless" Propulsion Turbine as a demonstration unit for the state of Hawaii. Jack Dean, president of THREE, who has consulted with IAS on the turbine development, will spearhead the demonstration of this breakthrough turbine technology. <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. 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. Conservative estimates of the turbine's abilities demonstrate remarkable advantages in areas of cost, maintenance, size, efficiency and versatility over today's expensive conventional turbine under the same conditions.<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>

Neldon Johnson, president of IAS, said, "Jack Dean has been consulting with IAS on the development of the turbine and continues to be a valuable resource for us as we make low-cost renewable energy a reality. We are excited about our continuing relationship with THREE and Mr. Dean." <br><br>

About International Automated Systems Inc. (www.iaus.com; IAUS.OB) <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, Utah<br><br>. 

About The Hydrogen Renewable Energy Enterprise, LLC (www.hydrogenrenewableenergy.com)<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. 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. 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.