AquaCell Announces Dividend of New Subsidiary's Preferred Stock to Stockholders.

Business Editors

RANCHO CUCAMONGA, Calif.--(BUSINESS WIRE)--Sept. 25, 2001

AquaCell (AMEX:AQA) announced today that it has formed a new subsidiary, AquaCell Media Inc. ("Media") exclusively dedicated to the selling of advertising space on the label of the permanently attached five-gallon bottle on the company's patented self-filling Purific(R) Water Cooler.

AquaCell will hold 100 percent of the common stock of the subsidiary with preferred stock issued AquaCell's common stockholders. AquaCell stockholders as of the record date of Oct. 25, 2001 will receive a 26 percent dividend of preferred stock, or approximately one (1) share for every four (4) shares of common stock held in AquaCell. In addition, up to 1 million shares of preferred stock will be issued to the management team of Media.

AquaCell's management is actively recruiting individuals from the advertising industry to fill key management positions, including CEO and president. Media's management will work collectively with both advertisers and with advertising agencies.

The company will initially target placement of Purific coolers in the waiting rooms of medical care facilities, selling advertising space on the bottle label to healthcare companies. Since the bottle is permanently attached to the water cooler, the label -- which can be changed intermittently to coincide with advertising campaigns -- remains intact. The program will be rolled out to encompass other targeted industries as well, such as, brokerage firms, travel agencies, salons, schools and universities.

"While our earliest business plans always included this advertising program, we did not expect to roll it out until September 2002," said James C. Witham, chairman and CEO of AquaCell. "Given recent developments and opportunities, we are pleased to be able to move up the timing on this program in our strategic business plan."

Witham continued, "Despite slowing in the advertising industry, we believe that the time is right to introduce this exciting program, as businesses are hungry for more targeted ways to reach their audience."

"This is a brand new concept in advertising, creating a billboard on a water cooler," said Karen Laustsen, president and chief operating officer. "Since the water cooler is a known congregating location, it is the perfect venue for advertisers, especially given the fact that we can place the Purific coolers in strategic targeted locations."

Laustsen continued, "There are significant benefits to advertising on the Purific bottle label, including a highly targeted audience; a high level of viewing frequency; no clutter from competing ads; long viewing time -- since pages can't be turned, there is no channel surfing or mouse clicking; and, it is inexpensive."

Gary Wolff, chief financial officer said, "The five-year projections we have put together for Media shows a significant revenue growth with high gross profits and operating income before taxes."

Introducing AquaCell

AquaCell, based in Rancho Cucamonga, manufactures and markets nationwide the only patented system that permanently attaches a five-gallon water bottle to a traditional water cooler, creating a completely closed system. This Purific(R) water cooler, which has been tested and validated by the Water Quality Association, is equipped with its own state-of-the-art filtration system and automatically refills the permanently attached five-gallon bottle with freshly filtered and purified water every time water is dispensed.

The company's clients, primarily comprised of Fortune 500 corporations, save money in comparison to the cost of bottled water, and the companies are relieved of having bottles to change, bottles to store and the inconvenience of bottled water deliveries. The unique nature of the company's product enables it to market nationwide without the use of distributors, tapping into the $5 billion bottled water market.

Safe Harbor, Statement Under the Private Securities Litigation Reform Act of 1995.

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements about: the company's ability to continue relationships with customers; the company's ability to offer its products at competitive prices; the company's ability to maintain its listing on the American Stock Exchange; and the company's ability to use the most current technology for its products.