Trading Statement

11 December 2015

HaloSource, Inc.

("HaloSource" or the "Company")

Trading Update

HaloSource, Inc. (HAL.LN, HALO.LN), the global clean water technology solutions company trading on London's AIM, today announces that, further to our announcement of 20 November 2015, the Company has successfully resumed full production at our Drinking Water facility in China and is now actively fulfilling customer orders. This follows an extended shutdown of our Drinking Water facility due to unexpected operational challenges in relation to the production of cartridges as we increased manufacturing capacity.

Whilst we now have installed increased manufacturing capacity to meet existing and future market demand, the shutdown of the facility has resulted in a further delay in orders that were previously expected to be delivered in 2015. The majority, if not all, of these orders are now expected to be shipped in the first quarter of 2016. Accordingly, we now expect that Drinking Water revenues for the second half will be lower than previously anticipated. As a result, we expect total consolidated revenues for the year ending 31 December 2015 to be materially lower than current market expectations and in the range of $18 million to $19 million, resulting in the net loss for the full year being consequentially higher than market expectations and net cash being approximately $4 million at the year-end. The Company is exploring opportunities to strengthen its balance sheet and improve cash generation.

We expect a strong 2016 as market demand for our class leading HaloPure Drinking Water technology continues to increase in the fast-growing point-of-use drinking water segment and we look to grow the number of customers who will deploy our technology in their water purification systems.

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About HaloSource

HaloSource, Inc. creates innovative solutions for water purification that serve people, preserve the planet and protect our most valuable resource. The Company works with scientists and industry experts across the globe in search of new ways to improve water quality and has been awarded more than 70 patents for its ground breaking chemistries, which provide effective and environmentally responsible solutions to the growing issue of water stress.

Founded in Seattle, Washington, HaloSource has grown to become an influential leader in three market segments: drinking water, recreational water, and environmental water treatment and remediation. 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.

HaloKlear, HaloPure, and SeaKlear are either trademarks or registered trademarks 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.