IRIS Concludes Poly U/A Tender Offer; 77% of Poly U/A Shares Tendered.

CHATSWORTH, Calif.--(BUSINESS WIRE)--July 28, 1999--

International Remote Imaging Systems Inc. or IRIS (AMEX:IRI), a leading manufacturer and worldwide marketer of automated in vitro diagnostic (IVD) imaging systems used to enhance productivity and improve outcomes in genetics, urinalysis and cytology, Wednesday announced that as of the close of business Monday, 93% of all stockholders of Poly U/A Systems Inc. (Poly U/A) had tendered 196,000 shares of Poly U/A common stock, or 77% of all of the outstanding Poly U/A common stock, in response to an IRIS tender offer made with the approval of the Poly U/A board of directors. The tender offer expired Monday at 5 p.m. Los Angeles time.

Tendering Poly U/A stockholders will receive three shares of IRIS Common Stock, one share of the new Series B Callable Preferred Stock and three-year Series G Warrants to purchase three shares of IRIS common stock in exchange for each share of Poly U/A common stock tendered and a release of any claims against IRIS and Poly U/A.

Although the offer was initially conditioned upon stockholders tendering at least 90% of the outstanding shares, IRIS amended this condition to a supermajority and is purchasing all shares tendered as of July 26.

The "callable" feature of the Series B Callable Preferred Stock will entitle IRIS to convert the new preferred stock at any time into a number shares of IRIS Common Stock equal to the liquidation value of the preferred stock divided by the market price of the IRIS Common Stock at the time of conversion (subject to a minimum valuation of $2.00 per share of IRIS Common Stock regardless of the prevailing market price).

The Series B Callable Preferred Stock will automatically convert into IRIS Common Stock under the same formula at the end of three years if not called sooner by IRIS. IRIS will also have the right to redeem any unexercised Series G Warrants for a nominal amount of cash any time after the 30-day average closing price if the IRIS Common Stock exceeds 200% of the warrant exercise price.

One-half of the Series G Warrants are exercisable at $1.00 per share, the other one-half at $2.00 per share.

Based on the number of shares of the Poly U/A common stock tendered, IRIS will issue 588,000 shares of IRIS Common Stock, 196,000 shares of Series B Callable Preferred Stock and Series G Warrants to purchase an additional 588,000 shares of IRIS Common Stock.

IRIS has already incurred a one-time noncash $1.5 million charge against first-quarter earnings in connection with this settlement. With the conclusion of the tender offer, IRIS owns a 77% interest in Poly U/A Systems.

IRIS designs, develops, manufactures and markets IVD imaging systems based on its patented and proprietary AIM technology for automating microscopic procedures performed in hospital and reference clinical laboratories and genetics laboratories, worldwide.

Its major product lines are The Yellow IRIS(R) family of urinalysis workstations, the PowerGene(TM) line of cytogenetic analyzers and the StatSpin line of centrifugal specimen preparation devices.