SecProbe.io

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0308

         DIVISION OF
CORPORATION FINANCE

Mail Stop 03-08

July 29, 2005

Daniel Beckett
Chief Financial Officer
American Water Star, Inc.
4560 South Decatur Boulevard
Las Vegas, Nevada  89103

	Re: 	American Water Star, Inc.
		Form 10-K for the Fiscal Year Ended December 31, 2004
		Form 10-Q for the Fiscal Quarter Ended March 31, 2005
		File No.  1-32220

Dear Mr. Beckett:

      We have reviewed the above referenced filings and have the
following comments.  We have limited our review to only your
financial statements and related disclosures and do not intend to
expand our review to other portions of your documents.  Where
indicated, we think you should revise your documents in response
to
these comments in future filings.  If you disagree, we will
consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Item 6.  Management`s Discussion and Analysis of Financial
Condition
and Results of Operations, page 27

Overview and Outlook, page 27

1. We note that you have three primary revenue channels - sales to
distributors, sales to retailers, and private label/co-packing.
If
you determined that you have only one reportable segment, please
tell
us how you determined your operating segments in accordance with
FAS
131, addressing each of the components of paragraph 10 of FAS 131.
If you aggregate two or more operating segments into one
reportable
segment, tell us how you satisfied the aggregation criteria of
paragraph 17 of FAS 131 and advise us of your basis for
aggregation.
See paragraph 25 of FAS 131 for disclosure items.

Results of Operations, page 30

2. You state that, "We will record payments received as a
reduction
of the intangible asset recorded as a result of the Sunset asset
acquisition" relating to the February 2004 purchase.  We do not
note
any intangible asset on the balance sheet for the year ended
December
31, 2004.  Please revise in future filings or advise us otherwise.

3. Item 10(h) of Regulation S-B prohibits using a non-GAAP
performance measure to eliminate or smooth items identified as
non-
recurring, infrequent or unusual, when the nature of the charge is
such that it is reasonably likely to recur within two years or
there
was a similar charge within the prior two years.  Accordingly,
please
explain why your presentation of gross profit, excluding the cost
of
discarded inventory, slotting fees and promotional goods conforms
to
this presentation, or eliminate from future filings.  See Question
#8
from the Frequently Asked Questions Regarding the Use of Non-GAAP
Financial Measures, which can be found on the SEC website.

Application of Critical Accounting Policies and Pronouncements,
page
38

4. Your discussion of critical accounting policies should include
quantification of the underlying accounts and a discussion of
changes
and trends associated with the underlying accounts. For example,
your
discussion of trade accounts receivable should quantify the amount
of
expenses that you recorded in each period for allowances and
discuss
any trends or significant changes. Your discussion of stock-based
compensation should discuss any expense incurred as well as the
reasons for significant changes and trends.  Your discussion of
revenue recognition should highlight any changes in historical
discounts, rebates, and sales return rates or the lack of any
changes.

5. It is not clear why inventories would involve a critical
accounting policy. Please tell us what significant judgment and
estimates are required in your accounting for inventories.

Consolidated Statements of Cash Flows, F-7

6. Tell us why it is appropriate to classify the `capital lease
obligations` as a financing activity.  Obtaining an asset by
entering
into a capital lease is generally reported in the related
disclosures
where the transaction is a non-cash financing activity.  Refer to
paragraph 32 of FAS 95.  Please revise or advise us otherwise.

7. We note that you classified advances to/from related parties
and
notes receivable/notes payable in both investing and financing
activities.  For each transaction included in the balances, please
tell us how you decided to categorize them as investing or
financing
activities and how they meet the criteria under paragraphs 15-20
of
FAS 95 for such classification.

Item 8A.  Controls and Procedures

8. Please explain to us on a supplemental basis how the certifying
officers were able to conclude the disclosure controls and
procedures
were effective in light of the material weakness you have
identified
in your internal controls and procedures.

Notes to Consolidated Financial Statements, F-8

Note 1.  Significant Accounting Policies, F-8

Inventories, F-9

9. We note that you determine inventory cost on the basis of,
average
cost or first-in, first-out methods.  Tell us, and disclose in
future
filings, why you elect to use each of these two methods, how you
determine the inventory costing method to use in specific
circumstances, and how your election impacts the financial
statements.

Revenue recognition, F-10

10. We note that you recognize revenues upon shipment.  Tell us,
and
disclose in future filings, whether your stated shipping terms are
FOB shipping point or FOB destination and when title passes from
you
to your customer.  Unless obvious, please explain to us why sales
recognition is appropriate upon shipment, rather than upon
delivery
to and acceptance by the customer.

11. We note that you incurred slotting fees in both 2003 and 2004
in
the amounts of $1,120,660 and $1,277,324, respectively.  Tell us
and
disclose in future filings the nature and extent of these
arrangements.  For each type of arrangement treated as an expense
rather than as a reduction of revenues, tell us how this type of
arrangement meets the requirements of EITF 01-9.  For each expense
line item that includes these types of arrangements, disclose the
related amounts included in that line item.  Please also discuss
in
MD&A any significant estimates resulting from these arrangements.

Note 14.  Stockhoders` Equity, F-19

12. In future filings, please provide a basic description of the
stock option plan, the general terms of awards under the plan,
such
as vesting requirements, the maximum term of options grants, and
the
number of shares authorized for grants of options in accordance
with
paragraph 46 of FAS 123.  In addition, please tell us, and
disclose
in future filings, the total compensation expense recognized in
income for each period presented and the specific transactions to
which it relates.

*	*	*	*

      Please send us your response to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter keying your responses to our
comments
and provide any requested supplemental information.  Please file
your
response letter on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Dave Irving, Staff Accountant, at (202) 551-
3321 if you have questions regarding comments on the financial
statements and related matters.  Please contact me at (202) 551-
3841
with any other questions.

Sincerely,

Michael Moran
Branch Chief
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Mr. Daniel Beckett
American Water Star, Inc.
July 29, 2005
Page 5 of 5

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