Shareholder approval for Placing of £16 million

FOR IMMEDIATE RELEASE

12 October 2012

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

HaloSource, Inc.

Shareholder approval for Placing of £16 million

HaloSource, Inc. ("HaloSource" or "the Company"), the clean water and antimicrobial technology company, refers to its previous announcement of 28 September 2012 in relation to its successful conditional placing of new common shares (the "Placing Shares") to raise approximately £16 million.

The Company is pleased to announce that the Company has obtained the requisite number of waivers of existing shareholders to (a) issue the Placing Shares without having to make a pre-emptive offer to existing shareholders, and (b) waive the requirement for certain placees to make a cash offer for the Company on the basis that such placees will hold 30% or more of the Company's shares on completion of the Placing. Accordingly, the Company will shortly apply for admission of the Placing Shares to trading on AIM ("Admission").

Admission is expected to occur at 8:00 a.m. on 19 October 2012 (or such later time as Liberum Capital Limited and the Company may agree, being not later than 8:00 a.m. on 31 October 2012).

Enquiries:

About HaloSource

HaloSource (www.halosource.com) is a global clean water technology company headquartered in Bothell, Washington, U.S.A. We design solutions to protect people, preserve the planet and celebrate our most valuable resource-water that is safer, cleaner and more accessible for people everywhere.

HaloSource is committed to relentless innovation, industry-leading products and ongoing support for water-related philanthropy. Our proprietary technologies for drinking and recreational water, textile coatings, and environmentally friendly wastewater recycling, enable our partners to rid the world's water of impurities and return it responsibly to the earth.

HaloSource Technologies that Protect Water and Textiles:

·; HaloPure® media is the most flexible, price-competitive disinfection solution for clean drinking water in the industry. In 2009, it became the first drinking water technology in 30 years to be registered by the United States Environmental Protection Agency (USEPA), widely recognized as having the world's most stringent performance requirements for water purification. In 2010, HaloPure media was approved by China's Ministry of Health (MOH) and recognized for meeting the world's most stringent water purification requirements, a key differentiator for our multi-national partners. In Brazil, the use of HaloPure media has met or exceeded all appropriate standards of the National Institute of Metrology, Standardization and Industrial Quality (INMETRO).

·; SeaKlear® Pool and Spa treatment products bring both natural biopolymers and antimicrobial applications for treating recreational water.

·; HaloShield® products consist of antimicrobial coatings solutions that employ unique technology that binds chlorine-based bleach to textiles such as sheets, lab coats and towels for use as a non-toxic biocide.

HaloSource Technologies that Preserve the Environment:

·; HaloKlear™ products use natural biopolymers providing industrial water clarification with dramatic reductions in ecological impact.

HaloKlear, HaloPure, SeaKlear and HaloShield are either trademarks or registered trademarks of HaloSource, Inc. All other trademarks, brand names or product names belong to their respective holders.

Liberum Capital Limited, which is regulated by the Financial Services Authority, is acting exclusively for HaloSource in connection with the Placing and no-one else and will not be responsible to anyone other than HaloSource for providing the protections afforded to customers of Liberum Capital Limited, or providing advice in connection with the Placing or any transaction or arrangement referred to in this announcement.

This announcement does not constitute, or form part of, an offer, or solicitation of an offer, or invitation to subscribe for or purchase any rights, ordinary shares or other securities of the Company in the United States. In addition, the securities of the Company to be issued in the Placing have not been, and will not be, registered under the US Securities Act of 1933 (as amended) (the "Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold or delivered within, in or into the United States or to, or for the account or benefit of, US Persons absent an applicable exemption from the registration requirements of the Securities Act. There will be no public offer of securities within the United States.