IRIS Tender Offer to Purchase Poly U/A Systems Accepted by Poly U/A Systems Directors.

CHATSWORTH, Calif.--(BUSINESS WIRE)--May 11, 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, announced that it plans to make a tender offer for all of the outstanding common stock of Poly U/A Systems Inc.

The tender offer has the approval of the Poly U/A Board of Directors. The offer will provide Poly U/A stockholders three shares of IRIS common stock, one share of a new class of three-year callable preferred stock and three-year warrants to purchase three shares of IRIS common stock for each share of Poly U/A common stock they hold.

The offer is contingent upon acceptance by ninety percent or more of the Poly U/A stockholders.

If all of the Poly U/A common stock is tendered and accepted, IRIS would issue 768,000 shares of its common stock, 256,000 shares of a new $3.00 three-year callable preferred stock and warrants to purchase an additional 768,000 shares of IRIS common stock. Each tendering stockholder will be required to sign a release of any potential claims against IRIS.

The value of these securities is estimated at $1.5 million. IRIS will record this amount as a one-time non-cash expense in the first quarter of 1999.

The "callable" feature of the preferred stock will entitle IRIS to convert the preferred stock at any time into a number of shares of common stock equal to the liquidation value divided by the market price of the common stock at the time of conversion (subject to a minimum value of $2.00 per share of IRIS common stock). The preferred stock will automatically be converted 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 warrants for a nominal amount of cash any time after the 30-day average closing price of its common stock exceeds 200% of the warrant exercise price. One-half of the warrants are exercisable at $1.00 per share, the other one-half at $2.00 per share.

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.

This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to uncertainties and other factors that could cause actual results to differ materially from the forward-looking statement. For example, the transaction is subject to the completion of mutually acceptable documentation and final approvals from the Boards of both companies; the tender offer may not be accepted by the necessary number of Poly U/A stockholders to meet the ninety percent contingency and dissatisfied Poly U/A stockholders could file a lawsuit. The transaction could also be affected by material changes in the company's stock price, results of operations or financial condition. IRIS refers interested persons to its most recent Annual Report on Form 10-K and its other Securities and Exchange Commission filings for a description of certain additional uncertainties and factors that may affect forward-looking statements. For further information regarding this transaction, please see the company's current report on Form 8-K filed on May 7, 1999, with the SEC.