HaloSource says revenues from continuing operations for the full year ended 31 December are expected to be not less than $2.0 million (2016: $4.2 million). Net cash at the year-end is expected to be approximately $2.1 million (2015: $4.6 million).
As previously announced on 3 November, revenues for 2016 were impacted by decreased demand from our largest Chinese customer, Perfect Purification Manufacturing Company Ltd.
Perfect has now resumed shipments against its approximately 600,000 unit installed base of in-home devices, each of which need annual replacement of HaloPure powered cartridges to keep water safe.
During 2016, the Company added several key development contracts for Asian product launches of HaloPure enabled devices including with one of the world's largest device manufacturers, Midea Group, for a launch in India in 2017.
An update says: "Finally, our partner, Jarden, launched pitchers in Mexico in a limited number of stores of a US-based big box retailer late in 2016. Results of initial sales and a decision from the retailer to expand distribution of Jarden pitchers using HaloPure to all of their stores in Mexico is expected to be known in Q1 2017.
"During the year we also made solid progress on the development and scale-up of our new lead removal technology and we expect it to be available during H1 2017. This technology would enable us to offer a powerful combination of heavy-metal removal along with viral and bacterial disinfection already provided by HaloPure." The company's board has recently concluded its strategic review of options available to the company, as previously announced on 3 November, and will pursue either additional external equity financing or a sale of the company. Acting CEO James Thompson, said: "In addition to completing the disposition of our Environmental Water and Recreational Water businesses, we have also implemented a number of structural changes during 2016 which enable us to better focus on our Drinking Water business while also significantly reducing our operating costs. A majority of our commercial efforts are being driven by teams in the markets in which we do business, primarily China, with innovation driven out of the US, supported by a small technical team in India. To help address the customer concentration issues of a small business, in 2H 2016, we added 6 new customers in China and one new customer in India that we expect to contribute to increased revenues in 2017.
"The Asian markets for drinking water products are growing at 30-40% annually and these customers need technologies and regulatory approvals to launch differentiated products. These relationships and our growing pipeline are expected to deliver solid growth well into the future.
"We remain focused on delivering our class-leading HaloPure Drinking Water technology through current and future strategic partnerships with some of the world's leading household appliance brands."
(LON:HAL) HaloSource share price was 0p at 7.5p
(LON:HALO) HaloSource DI share price was +0.38p at 1.75p