American Water Star Inc. Reaches a Settlement Agreement with South Beach Beverage Co.

LAS VEGAS -- American Water Star Inc. (AMEX: AMW) settled the Civil Action in the United States District Court for the District of Nevada with South Beach Beverage Co., a Delaware corporation, known for its production of SOBE beverages. Pursuant to the terms of the settlement agreement, AMW agreed to cancel its pending cancellation proceeding in the Trademark Trial and Appeal Board of the United States Patent and Trademark Office and to abandon and not pursue any application for a trademark, service mark, or trade name comprised in whole or part with the names "South Beach" or "SOBE." In November American Water Star received an undisclosed amount in accordance with the settlement.

"We believe the terms of the agreement with South Beach Beverage are fair and favorable to both parties. We are glad that we can put this issue behind us," stated Roger Mohlman, president and CEO of American Water Star.

About American Water Star Inc.

American Water Star Inc. ("AMW") is a publicly traded company, engaged in the beverage bottling industry. Its product brands are both 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 products include Hawaiian Tropic -- a product featuring a sugar-free, no carbonation, and caffeine-free, sodium-free tropical drink. Hawaiian Tropic flavors include Strawberry Kiwi, Kiwi-Lemon Lime, Orange Guava and Pineapple Pink Grapefruit. For grade-school-age children we are introducing Geyser Sport -- our new non-sugared, zero calorie, zero carbohydrates, zero sodium, vitamin- and mineral-enriched, fruit-flavored beverage brand. Our other premium beverages include: Geyser Fruit Beverages -- our line of eight different fruit-flavored waters which have proven to be popular with consumers; and Geyser Fruta -- our Latin line of seven different fruit-flavored beverages.

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 AMW's historical experience and our present expectations or projections. These risks include, but are not limited to, litigation uncertainties; the impact of our resolving our Civil Action with South Beach Beverage Co.; our ability to become an industry leader; changes in economic conditions; changes in the nonalcoholic 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; and other risks discussed in our filings with the SEC, including our Annual Report on Form 10-KSB and Quarterly Reports on Form 10-QSB, which filings 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.