Terra Systems, Inc. Announces Positive Assessment of Its Technology by Scientific Consulting Group.

Business Editors

PAYSON, Utah--(BUSINESS WIRE)--Oct. 25, 2001

Terra Systems, Inc. (PINK SHEETS - TSYI) announced today that a Santa Fe, NM-based scientific consulting firm, the La Mancha Company, has completed an initial study (commissioned by TSYI) about the Company's patented Pneumatic Accelerator technology.

The title of the report is "Dry Bulk Materials Handling Technology With Emphasis On Coal." The report's conclusions are positive concerning TSYI technology's technical and economic feasibility. In part because TSYI is still a development-stage company, La Mancha's report cites certain caveats including that "...these general conclusions must be adequately measured and documented in rigorous pilot-test environments such as those proposed by TSYI...."

The Summary Statement of the La Mancha Report says: "In conclusion, the process and its potential application to utilization in coal-fired power generation, the recovery of usable coal fines from long-accumulating waste sites, and its environmentally "friendly" attributes, constitute an intriguing and innovative approach to assisting in reconciling the current dichotomy of energy demand and environmental concern. The proposed Phase I Program (of Terra Systems) should be supported as a first step."

Commenting on this study, Clayton Timothy, Chairman of TSYI, said: "We are very pleased with the positive conclusions about our technology that this report has reached. The La Mancha Company is a prestigious scientific consulting firm; and, in this case, two of the authors of the report hold Ph.D.s in relevant physical sciences and are also retirees from the Los Alamos National Laboratory. We recognize the challenges TSYI faces in achieving successful commercialization, including those mentioned in this report. But, we also feel this study provides substantial professional support for the faith we have in the scientific and economic efficacy of the Company's unique process for dry bulk materials handling."

Terra Systems, Inc. was incorporated in Utah in 1996 and is presently a development-stage company. It is primarily engaged in the development and commercialization of its patented Pneumatic Accelerator. This device is a gas linear particle accelerator, which conveys and processes bulk materials at high velocity in a particle-isolated state, using air as the medium of movement. This technology operates efficiently at ambient temperatures and at low pressures and does not use water, the generally more costly traditional alternative for processing bulk materials. Virtually, all organic and inorganic bulk materials used in basic industries can be more economically separated and classified by our dry-process technology. This capability facilitates a number of associated procedures, including: drying, micro pulverizing, mixing, forming, conveying, and loading. In addition, bulk materials can be beneficiated in important ways including moisture reduction, ash reduction, Btu enhancement, and electro-customization. Our system can perform multiple tasks, needs less maintenance, requires no chemical additives, and can improve the surrounding environmental quality. Opportunities are seen for many applications in an array of large industries including power generation, agriculture, mining, environment, construction, ceramics, and materials transportation. We estimate that our technology could generate economic returns to industrial users in the form of revenues and/or cost savings in the area of $2 billion within a few years, if adopted for implementation in several large projects. Terra Systems anticipates it will share in these economic returns through fees, royalties, and profit sharing from licensing of its technology. TSYI has approximately 18 million shares currently outstanding.

SAFE HARBOR PROVISIONS

Some of the statements contained in this press release discuss future expectations, projections of sales, results of operations, financial conditions or licensee production or state other "forward-looking" information (as defined in Section 21E of the Securities Exchange Act of 1934). Such information can be identified by the use of "may," "will," "should," "expect," " anticipate," "estimate," "continue," or other similar words. These statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the statements. When considering such forward-looking statements, the reader should keep in mind these risk factors and their possible implications.

The Company believes that the information contained in its press release was accurate as of its date of publication. The Company disclaims any obligation to update information it has released. Certain pages of this release may appear on a website which contains links or frames to sites operated by third parties. The Company assumes no responsibility for the accuracy or completeness of information on such third party sites.

Company contact Clayton Timothy or Kent Harmon 801-465-4400. Feel free to visit our Website at TSYI.com. For a free Basic Research Report on TSYI, you may visit Xcelassociates.com.