KMX Insights – Quarterly Update – August 2026

Quarterly Update

It was a strong quarter for the KMX team. Advances in mass production, successful pilot work, and the expansion of our IP portfolio and asset base were a few of the highlights.

In this quarterly update, I'll discuss:

• Technical and engineering advancements
• Commercial outlook
• How growing water security concerns are accelerating demand across our target markets

Technical and Engineering Advancements:

Over the past several months, the KMX technical and engineering team has continued to advance a number of strategic initiatives, including the expansion of our IP portfolio, the expansion of our asset base, and engineering development for KMX systems of varying scale.

The expansion of our IP portfolio further strengthens KMX's proprietary brine and mineral solution platform, enhancing our ability to unlock valuable minerals from various sources as well as desalinating harsh waste streams.

We have also continued to expand our asset base to support commercial growth and diversify our end markets. As a result, a new next generation mobile treatment system, membranes, and new support equipment are some of the items under construction or recently delivered.

These investments increase our ability to support customers while accelerating commercial deployment opportunities.

Commercial Outlook:

Growing Tailwinds Across Oil & Gas, Lithium, and Data Centers

The commercial outlook across KMX's core markets continues to strengthen. We are seeing growing demand in oil & gas produced water desalination and lithium recovery while continuing to build momentum through discussions with leading participants in the rapidly expanding data center industry.

Within oil & gas, the opportunity to desalinate produced water continues to grow, driven by disposal constraints and the emerging opportunity to provide desalinated produced water to data centers in West Texas.

In lithium, improving market conditions over the past year have provided greater stability for project developers. We expect this trend to support increased demand for KMX's lithium concentration technology, which has been government-validated to concentrate lithium solutions to saturation while retaining more than 99.99% of ions.

For data centers, KMX was recently highlighted in a BlueTech Research data center Insights Report: Data Centers, Separating Hype from Reality.

The report's author, Dr. Vishal Wagholikar, shows that demand for water technology from data centers is not evenly distributed and that there is significant demand for water technology that can maximize recovery in a small number of water-stressed hubs in arid regions.

Despite growing interest in air-cooling technologies for data centers, hardware thermal limitations and operational realities continue to support significant long-term demand for water-based cooling systems, according to Dr. Wagholikar.

As a result, global data center water consumption is expected to increase significantly through 2035 despite ongoing efficiency improvements, leading to substantial growth in cooling tower blowdown and other wastewater streams that can benefit from KMX's technology.

Growing Water Security Concerns

Droughts spanning regions where data center, lithium, oil & gas, and other industry activity takes place is accelerating the need for customers to utilize KMX's brine concentration technology.

Economic incentives and emerging regulatory realities to adopt technologies that can maximize water recovery are driving demand. We expect to see tighter regulations governing water discharge and recycling in several regions we are currently focused on, and believe this will be another catalyst for KMX's next leg of commercial growth.

Drought in the West, spanning the Colorado River Basin, is presenting headwinds for lithium development, recently highlighted by the Financial Times.

As a result, companies that utilize KMX's VMD technology in arid regions have the opportunity to be net contributors of freshwater to the communities in which they operate, providing significant local support and additional revenue from potential water sales.

Up Next

Ongoing pilot work and continuing to optimize large-scale engineering remains the team's core focus. Our end-market diversification efforts are accelerating as well, and we hope to announce an exciting new market for our technology soon!

- Zac

Zachary Sadow

Chairman & CEO
KMX Technologies