AquaCell Technologies Inc. Announces Operating Results for the Third Quarter.

Business Editors

RANCHO CUCAMONGA, Calif.--(BUSINESS WIRE)--May 11, 2001

AquaCell Technologies Inc. (AquaCell) (AMEX:AQA) today announced results of operations for the quarter and nine months ended March 31, 2001.

During the quarter ended March 31, 2001 the company completed its initial public offering, generating net proceeds of approximately $4.6 million. A cash balance of $11,000 at Dec. 31, 2000 improved to cash and short-term investment notes of $2,886,000 at March 31, 2001, which will allow AquaCell to implement its business and marketing plans and take the company to the next level. The capital deficiency of $1,336,000 at Dec. 31, 2000 improved to stockholders' equity of $3,415,000 at March 31, 2001. Liabilities decreased from $2,334,000 at Dec. 31, 2000 to $155,000 at March 31, 2001, and the company eliminated all debt.

AquaCell generated minimal sales because executive management, which had been responsible for all sales through the March 31, 2001 quarter, devoted all of its time to the company's initial public offering. AquaCell has maintained high gross profit margins on sales of approximately 58% and is well positioned for future growth.

The net loss from recurring operations for the quarter ended March 31, 2001 was $364,000 ($0.05 per share) as compared with $325,000 ($0.07 per share) for the quarter ended March 31, 2000. During the quarter ended March 31, 2001, an additional $242,000 ($0.04 per share) represented non-recurring expenses.

AquaCell's net loss from recurring operations for the nine months ended March 31, 2001, adjusted for the $242,000 of non-recurring expense discussed above, was $857,000 ($0.15 per share) as compared with $792,000 ($0.16 per share) for the nine months ended March 31, 2000. For the nine months ended March 31, 2001, non-recurring expenses were $1,095,000 ($0.19 per share) which included the $242,000 ($0.04 per share) and $853,000 ($0.15 per share) attributed to the Black-Scholes write-off in connection with warrants issued.

The Black-Scholes write-off was $83,000 ($0.02 per share) for the nine months ended March 31, 2000. Net interest expense arising from money borrowed prior to completion of the initial public offering was $101,000 ($0.02 per share) for the nine months ended March 31, 2001, as compared with $114,000 ($0.02 per share) for the nine months ended March 31, 2000. This interest expense has been eliminated since all debt has been converted to equity.

Summary of Operating Results:

                           Three Months Ended       Nine Months Ended
                                March 31                 March 31
                            2001        2000         2001        2000

Net sales                $53,000     $80,000     $159,000    $201,000

Loss from operations
 before interest expense,
 net of interest income,
 and extraordinary
 item (a)              $(612,000)  $(227,000) $(1,099,000)  $(792,000)

Interest expense, net
 of interest income,
 including amortization
 of debt discount (a)    $(6,000)     98,000      795,000     197,000

Loss before
 extraordinary
 item (a)              $(606,000)  $(325,000) $(1,894,000)  $(989,000)
Extraordinary item (a)
 -- Loss on
 extinguishment of debt        -           -      159,000           -

Net loss               $(606,000)  $(325,000) $(2,053,000)  $(989,000)

Net loss per common
 share:
  Loss before
   extraordinary
   item (a)               $(0.09)     $(0.07)      $(0.32)     $(0.20)
  Extraordinary
   item (a)                    -           -        (0.03)          -

  Net loss per common
   share                  $(0.09)     $(0.07)      $(0.35)     $(0.20)

Weighted average shares
 outstanding           7,112,000   4,938,000    5,876,000   4,938,000

      (a) The extraordinary item and amortization of debt discount
represents Black-Scholes charges.

AquaCell, based in Rancho Cucamonga, manufactures the patented self-filling Purific(R) Water Cooler. The Purific 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.

AquaCell's clients, primarily comprised of Fortune 500 companies, save money in comparison to the cost of bottled water and benefit by the elimination of inconveniences associated with changing, storing and the delivery of five-gallon bottled water.

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 risk, uncertainties and other factors which may cause the actual results, performance of 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 our ability to continue relationships with customers; our ability to offer our products at competitive prices, and our ability to use the most current technology for our products.