American Water Star Inc. Enters into Contract with Nico Worldwide, Smokers' Alternative Product

American Water Star Inc. (AMEX: AMW) has reached
an agreement with Nico Worldwide Inc. to immediately begin the
co-packing and distribution of their NicLite(TM) supplement beverage.
The NicLite(TM) supplement beverage is the only smoking replacement
product on the market today that has the added health benefit of
drinking purified, clean-tasting water with a hint of lemon.
   NicLite(TM) is the result of more than six years of extensive
research and development through the steadfast efforts and vision of
J. Robert Knight, the founder and CEO of Nico Worldwide Inc.
   "With an estimated 2.5 billion smokers worldwide seeking to align
with current smoking restrictions we feel that a comfortable
accommodation has been achieved with this beverage. NicLite(TM)
allows a smoker a suitable, healthy alternative where smoking is not
allowed such as airplanes, hospitals, office buildings, sporting
events, movie theaters," said Roger Mohlman, CEO of American Water
Star.
   American Water Star will co-pack the product in their plants,
making it more cost-effective to distribute nationally and
internationally.
   "It is a pleasure working with you and running our first retail
product, NicLite(TM), at your Arizona plant. We here at Nico Worldwide
Inc. will be using American Water Star as our primary co-packer," said
Knight.

   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 Nico and actual amount of annual sales of
the NicLite products; any benefits of the new co-packing and
distributing agreement; the reputation of the NicLite products; AMW's
production and co-packing capabilities; changes in economic
conditions; actual distribution of the NicLite products; the ability
to obtain a liquor distribution license; our ability to become an
industry leader; 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.