FOR IMMEDIATE RELEASE
Contact:
Vanson HaloSource, Inc.
Sean Manne
(425) 881-6464
smanne@vanson.com

Firmani & Associates
Mark Firmani
(206) 443-9357
mark@firmani.com

July 19, 2002

Vanson HaloSource Closes $5 Million Series B Funding
Original Round Target Oversubscribed by 67 Percent

( Redmond, Washington ) — Vanson HaloSource, developers of products using chitin/chitosan- and N-halamine-based technologies, today announced that it has closed on a total of $5 million in its series B round of equity financing, exceeding the original offering cap of $3 million by 67 percent.
"Exceeding our targeted capital goal for the round is an important milestone for Vanson HaloSource," said Jerry Wetherbee, the company's president and CEO. "The overwhelming response from the investment community is strong validation of the innovative applications developed by our 63 scientists and employees."

Wetherbee said the funds will be used to expand the market-share of the company's existing products, and accelerate the commercialization of new products. Vanson HaloSource has pioneered sophisticated chitin/chitosan- and N-halamine-based technologies to manufacture a wide range of products and ingredients for the water treatment, biomedical, home and personal care markets.
This is the first round of funding in the company since its creation through the merger of Vanson and HaloSource Corporation in May of this year. Wetherbee expects the new company to return to profitability by the end of the year.

The round was led by Seattle venture capital fund Alexander Hutton Venture Partners (AHVP), which invested $1.5 million. Seattle-based venture fund Buerk Craig Victor LLC (BCV) and offshore-based Britannia Holdings Ltd. each added $1 million. The balance of the round came from a small group of individual investors.

Roger Victor from BCV will become a member of the Vanson HaloSource board of directors, joining AHVP's Kent Johnson who came on board at the time of the merger.
"The tremendous array of products and technologies makes Vanson HaloSource a very compelling company," said Johnson, managing director of AHVP. "One example is the company's ability to deliver inexpensive water purification using its N-halamine technology. A huge opportunity in itself, that is just one of many applications."

Andy Dale, BCV's managing partner, said his company also sees great potential in the company's management team. "We believe in Jerry Wetherbee - he is an excellent leader and a very effective CEO," Dale said. "Jerry and the entire management team are the catalysts for this company to flourish."
Vanson HaloSource's N-halamine technology harnesses the power of chlorine - one of the most broadly used and effective antimicrobials - to kill all known bacteria, viruses, fungi and most parasites on solid surfaces and textile fibers. The technology enhances and prolongs the antimicrobial effectiveness of chlorine while significantly reducing toxic, carcinogenic and corrosive by-products in ways that existing products cannot.

The company's Sea-Klear® product line for pools and spas and Storm-Klear™ products for storm water management use chitosan's natural clarifying properties in the water treatment industry. In addition, many domestic and international dietary supplement manufacturers use the company's patented LipoSan Ultra®, a chitosan-based ingredient for weight management products.
In addition to Vanson Halosource's offices and laboratories in Redmond, it has manufacturing facilities in Raymond, Wash. The company's product lines include: Sea-Klear®, Storm-Klear™, Klarify™, LipoSan Ultra®, Haloshield®, Halopure® and Halofresh®.

About Alexander Hutton Venture Partners
Alexander Hutton Venture Partners, LP is a Seattle-based $95 million venture capital company, inaugurated in December 1999. Committed to delivering the highest level of service as investors, directors and strategic advisors, AHVP focuses on nurturing early-stage technology companies located in the Pacific Northwest. AHVP's team of professionals has served in leadership roles in some of the most innovative and successful technology companies in the region, including Microsoft, RealNetworks, and F5 Networks. Alexander Hutton Venture Partners can be found on the Web at www.alexanderhutton.com

About Buerk Craig Victor LLC
Buerk Craig Victor LLC, a Seattle, Washington-based company with a $15 million private equity growth fund launched in 2002, focuses on investments in diverse business sectors. BCV is also an investor in Door to Door Storage, now rated as the 54th fastest growing private company in America. BCV's five partners have extensive investment experience with a long history of successful ventures, including investments in Costco Wholesale, Primus Knowledge Solutions, and Eden Bioscience, among others. Buerk Craig Victor can be found on the Web at www.bcvllc.com
About Vanson HaloSource

Vanson HaloSource is a bioscience company that employs chitin/chitosan- and N-halamine-based technologies to create innovative solutions for a wide range of customer applications. With facilities in Redmond and Raymond, Wash., the company combines expertise from chemists, biochemists and microbiologists to manufacture products and ingredients to serve the water treatment, biomedical, home and personal care markets. It leverages cutting-edge processes to refine chitin and chitosan for water-clarification and various consumer products. With N-halamine technology, the company is developing antimicrobial and antiviral filters, coatings and textiles to purify water and improve sanitation in homes, healthcare settings and a multitude of environments. The company investors include Alexander Hutton Venture Partners, Buerk Craig Victor LLC, and Britannia Holdings as well as other institutional and private investors.