Acquisition of SmartPool's Chemical Product Lines

FOR IMMEDIATE RELEASE

HaloSource Acquires SmartPool's Chemical Product Lines

Seattle, U.S.A. - HaloSource, Inc. ("HaloSource" or "the Company") (HAL.LN, HALO.LN) the clean water and antimicrobial technology company, today announces the expansion of its Recreational Water division with the purchase of SmartPool's recreational water product lines, including the AquaPill and SPAroma brands. The Company estimates these products generated approximately $1million of gross profit in 2010. The consideration for the transaction is approximately $3 million, payable in cash.

AquaPill products are specialty swimming pool chemicals, for residential and commercial use, designed to maintain the appearance and quality of pool water. They are typically contained in prefilled, ready-to-use plastic capsules that are placed directly into a pool. SPAroma products are specialty spa chemicals, designed to reduce unpleasant aromas and enhance spa cleanliness. These are also typically contained in easy-to-dose time release capsules. AquaPill and SPAroma products will complement HaloSource's existing line of recreational water products: the SeaKlear™ brand of clarifiers, algaecides and water treatment solutions in the pool industry; and the SeaKlear™ Spa brand, a full-line of maintenance spa products for residential application.

HaloSource will utilize its existing Recreational Water division sales, marketing and management teams and established relationship channels to sell AquaPill and other product lines acquired from SmartPool. HaloSource has an existing dealer base of nearly 2,700 retail locations in the United States. HaloSource also intends to expand group sales internationally by continuing to sell the AquaPill and SPAroma products, and by introducing its existing SeaKlear and SeaKlear Spa products, to existing AquaPill and SPAroma customers in Europe, Japan, and Australia. As well as selling the AquaPill and SPAroma products, HaloSource plans to enhance sales of its existing product lines by marketing them for sale in the AquaPill and SPAroma capsules. HaloSource aims to increase its EBITDA for 2011 by approximately $750,000 as a result of this acquisition.

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About HaloSource

HaloSource is a clean water technology company, headquartered in Seattle, US with operations in India and China. It is focused on the provision of cleaner, clearer and safer water using its proprietary N-halamine bead technology to clean and purify water, killing bacteria and viruses that may cause disease.

While HaloPure provides safer drinking water; SeaKlear and StormKlear products use a second technology based on natural bio-polymers to provide water clarification and antimicrobial applications for treating recreational and environmental water; and HaloShield facilitates the binding of chlorine-based bleach to textiles such as sheets, lab coats and towels.

About HaloSource's markets

Recreational and Environmental Water

·; SeaKlear treats recreational water such as pools, spas and water parks with a full line of specialty chemicals including unique eco-friendly natural clarifying technologies, algae treatments, stain removal products and a complete hot tub care line.

·; StormKlear treats storm and industrial water by reversing the process of water contamination through its natural, environmentally friendly biopolymer technologies, separating contaminants and delivering clean water. It acts fast and requires little equipment, providing customers with a cost effective and efficient means of complying with USEPA discharge regulations.

·; Revenues for the recreational and environmental water businesses are generated from the sale of branded products through distributors and retailers to the consumer and commercial markets.