American Water Star Inc. Announces Agreement with Lipsey Mountain Spring Water Co.

LAS VEGAS -- American Water Star Inc. (AMEX: AMW) is proud to announce that an agreement has been reached with Lipsey Mountain Spring Water Co. located in Norcross, Ga.

Lipsey Mountain Spring Water Co. is the exclusive provider of water for the Federal Emergency Management Agency (FEMA) during presidentially declared disasters. In April 2003, the U.S. Army Corps of Engineers (USACE) selected Lipsey to serve as sole supplier for bottled water during disaster relief operations. Lipsey has provided FEMA tens of millions of gallons of water for relief operations. The company has been praised for its highly successful efforts in forming "a core of vital supply for the people of America" by the United States Army Corps of Engineers. (http://www.FEMAwaternetwork.com)

Lipsey has agreed to utilize American Water Star's bottling facilities to supply a portion of the water required by USACE, FEMA and individual states for disaster relief. The water will be bottled in various sizes. AMW's Jacksonville plant will service the southeastern region of the United States which includes Mississippi, Florida, North Carolina, South Carolina, Georgia, Louisiana and Alabama. AMW's Phoenix plant will service Lipsey in Arizona, Texas, Nevada, New Mexico, Utah and California.

"In 2004, the quantities of water shipped for disaster relief in Florida was in excess of 6,000 truckloads. This year in July alone, over 600 truckloads of water have been shipped to Florida, Alabama and Mississippi for disaster relief," stated Joe Lipsey III of Lipsey Mountain Spring Water Co.

"We are very proud to be part of this nationwide program. We have assured Lipsey that we have the capacity, over and above our normal production, to ship hundreds of truckloads of water on an 'as needed' basis to help our friends in their time of need," said Roger Mohlman, CEO of American Water Star.

About American Water Star Inc.

American Water Star Inc. ("AMW") is a publicly traded company and is engaged in the beverage bottling industry. Its product brands are licensed and developed in-house, and bottled in strategic locations throughout the United States. AMW's beverage products are sold by the truckload, principally to distributors, who sell to retail stores, corner grocery stores, convenience stores, schools and other outlets.

At AMW, we believe our great-tasting, new zero sugar, zero calorie flavored water beverages have positioned us to capture a large share of the market for healthy flavored waters. Our product line consists of four branded beverages: Geyser Sport; Geyser Fruit; Geyser Fruta; and Hawaiian Tropic. Geyser Sport is a sugar-free, calorie-free, carb-free fruit-flavored beverage fortified with vitamins and calcium, offered in eight different fruit flavors. Geyser Fruit is a non-carbonated water with a low sugar content, also offered in eight different flavors. Geyser Fruta is targeted to the Hispanic market and includes authentic Latin-flavored beverages. Our Hawaiian Tropic products feature sugar-free, no carbohydrate, caffeine-free, sodium-free tropical drinks offered in four flavors.

Forward-Looking Statements

This press release may contain statements that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "establish," "project" and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks include, but are not limited to, a final agreement being reached with Lipsey and actual amount of annual sales of AMW water for disaster relief; the frequency of presidentially declared emergencies; AMW's production capabilities; changes in economic conditions; changes in the non-alcoholic beverages business environment, including actions of competitors and changes in consumer preferences; our ability to capture market share; the effectiveness of our advertising and marketing programs; fluctuations in the cost and availability of raw materials or necessary services; our ability to avoid production output disruptions; our ability to achieve earnings goals; regulatory and legal changes; our ability to penetrate developing and emerging markets; litigation uncertainties; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10-KSB, Quarterly Reports on Form 10-QSB, and Current Reports on Form 8-K, which reports are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.