Pilot production of lead reduction media

13 February 2017

This announcement contains inside information

HaloSource, Inc.

("HaloSource" or the "Company")

Announces successful pilot production of lead reduction media

HaloSource Inc. (HAL.LN, HALO.LN), the global clean water technology company traded on London Stock Exchange's AIM market, announces today that it has succeeded in pilot-scale production of a filtration media that is expected to be the class-leading lead ("Pb") reduction media for gravity-cartridge applications, capable of meeting National Standards Foundation/ANSI 53 ("NSF/ANSI 53") certification in a certified device.

The novel formulation invented by HaloSource scientists for application in gravity-fed devices (such as pitchers) overcomes the challenge of reducing both colloidal lead and dissolved lead salts from water, meeting and exceeding NSF/ANSI 53 standards for lead reduction to below the current acceptable threshold of 10 parts per billion (ppb). This breakthrough media represents a major step forward in the application of a cartridge based form for reduction of lead from household drinking water when deployed in a gravity fed application (including pitchers, bottles, counter top units, etc) and the potential to reduce other heavy metals.

The HaloSource solution is unique in the mechanism and cartridge life, which will be more than double the capacity compared to competitive gravity pitchers currently certified to reduce lead to NSF/ANSI 53 standards. This innovation represents the Company's 2nd major technology platform joining HaloPure®, the world's leading brominated bead media for cartridge-based bacteria and virus disinfection in a wide variety of devices and applications.

In summary:

· Lab-scale media has been tested at Water Quality Association ("WQA") and met the NSF/ANSI 53 standards for pH 8.5 & 6.5 lead reduction in a representative gravity-fed drinking water device

· Pilot-scale media has been successfully produced and tested to the NSF/ANSI 53 standard by a 3rd party

· Samples of the material will ship to several interested commercial partners by the end of February

James Thompson, acting CEO of HaloSource, commented,

"We are delighted to be progressing toward full-scale production of an entirely new technology to address the issue of heavy metal contamination at the household level. The size of the market for this product is enormous and this innovation will allow us to enter the North American market, where the problems of lead contamination at the household level are proving to be far more widespread than imagined. Flint, Michigan is a particular example of how important this breakthrough will prove to be as the issues of water contamination through chemical contamination (primarily lead) grow steadily worse and consumers look to solutions that can provide a "final barrier" of protection at the household level. Similarly, markets such as China and parts of Europe are dealing with water quality problems and the opportunity for the introduction of this class-leading technology in these geographies are at least as big as North America.

We are proud of the innovation created by our team of dedicated scientists in which we have been able to bring to bear a highly effective solution at a reasonable cost to a critical category of contaminants. We will continue to press on further innovation to provide additional solutions to address the growing problem of contamination in our most precious resource: clean, safe, good tasting water".

The residential drinking water purification market in North America is approximately $2.0 billion today and China, the fifth largest globally, was estimated to total approximately US$2.5 billion in 2014 and is expected to grow 7-9% CAGR by 2019 (source: 2015 Verify Markets Report). In India, the water purification segment amounts to over $600 million in total with gravity fed devices accounting for 45% of new unit sales driven by poor electrical connectivity and reliability in rural areas and affordability (source: 2015 Verify Markets).

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About HaloSource

HaloSource, Inc. innovates and integrates technologies to deliver clean drinking water solutions to partners with trusted brands around the world. The Company works with scientists and industry experts across the globe in search of new ways to improve drinking water quality and has been awarded more than 30 patents for its ground breaking chemistries, which provide safe drinking water for more than 10 million consumers globally. The Company's class-leading HaloPure® Drinking Water technology has the highest global certifications, including registration with the US EPA.

Founded in Seattle, Washington, HaloSource has grown to become an influential leader in drinking water purification. HaloSource is headquartered in the US with operations in China and in India. Learn more about the Company's research and development and future cutting edge technologies by visiting www.halosource.com.

HaloPure® is a registered trademark of HaloSource, Inc. All other trademarks, brand names or product names belong to their respective holders.

This document contains certain forward-looking statements relating to the Company. The Company considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Company to differ materially from those contained in any forward-looking statement. These statements are made by management in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.