AquaCell Reports Year-End Results.

RANCHO CUCAMONGA, Calif. -- AquaCell (AMEX:AQA) announced today the results for the fiscal year ended June 30, 2004, which was a year of transformation for the Company.

James Witham, AquaCell's Chairman and Chief Executive Officer said, "This was a transition year for AquaCell in which we launched our 'Message On The Bottle' advertising program through our Aquacell Media subsidiary. A significant portion of our cash was utilized for the manufacturing of Aquacell 1000 Bottled Water Cooler Systems and the shipping and installation costs for this program, in addition to related operating costs." Mr. Witham continued, "We believe the non-cash charges related to stock based compensation to consultants will be beneficial to the Company and its shareholders for future growth."

For the year ended June 30, 2004 revenues were $729,000 on a consolidated basis, representing a decrease of $859,000 as compared to the prior year. This decrease is attributable to the restructuring of our marketing plan following the long and costly negotiation for the return of the exclusive distribution rights from Corbett Water Technologies and S&B Technical ("Corbett"), which resulted in aggregate non-cash losses of approximately $2,000,000.

Net loss on a consolidated basis, before preferred stock dividends, for the year ended June 30, 2004 was $4,512,000 or $0.40 per share, as compared to $2,574,000 or $0.30 per share for the prior year. The increase in the loss is primarily attributable to additional stock based compensation of $873,000; a fair value adjustment of $333,000 attributable to the dissolution of the Corbett agreements; goodwill impairment of $218,000 related to our acquisition of Water Science Technologies; and the decrease in revenues.

For a complete year-end report, please refer to our Form 10KSB.

INTRODUCING AQUACELL

AquaCell, based in Rancho Cucamonga, CA, through its Aquacell Media, Inc. operating subsidiary, installs its patented self-filling Aquacell 1000 Bottled Water Cooler Systems free of charge into various locations, including retail establishments. Aquacell Media retains ownership of the coolers, and revenue is generated through the sale of targeted advertising on the band of the cooler's permanently attached five-gallon bottle of products and/or services pertinent to the location, similar to the concept of billboard advertising. The Company also manufactures products for water filtration and purification through its two operating subsidiaries, Water Science Technologies, Inc. and Global Water-Aquacell, Inc. Its products address various water treatment applications for industrial, commercial, institutional and residential applications. These applications range from providing purified drinking water -- through its point-of-use patented self-filling water cooler and production of water bottling plant equipment -- to processing water for ultra-pure purposes, such as micro-chip and pharmaceutical manufacturing.

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

Certain statements in this press 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, performances or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements about: our ability to continue relationships with customers; our ability to offer our products at competitive prices; our ability to maintain our listing on the American Stock Exchange; and our ability to use the most current technology for our products.