REX AMERICAN RESOURCES Corp

Previous wording

Our ethanol operations and the results thereof are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, distillers corn oil and natural gas, and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations depending upon several factors that affect commodity prices in general, including crop conditions, the amount of corn stored on farms, weather, federal policy, foreign trade, and international disruptions caused by wars or conflicts. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy decisions and trade negotiations can impact ethanol and distillers grains prices), at times ethanol and distillers grains prices may not follow movements in corn prices and, in an environment of higher corn prices or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants. As a result, at times, we may operate our plants at negative or minimally positive operating margins.

Current wording

Our ethanol operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, distillers corn oil and natural gas, and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations depending upon several factors that affect commodity prices in general, including crop conditions, the amount of corn stored on farms, weather, federal policy, foreign trade, tariffs, and international disruptions caused by wars or conflicts. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy decisions and trade negotiations can impact ethanol and distillers grains prices), at times ethanol and distillers grains prices may not follow movements in corn prices and, in an environment of higher corn prices or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants. As a result, at times, we may operate our plants at negative or minimally positive operating margins.

Previous wording

We attempt to manage the risk related to the volatility of commodity prices by utilizing forward corn and natural gas purchase contracts, forward ethanol, distillers grains and distillers corn oil sale contracts and commodity futures agreements, as management deems appropriate. We attempt to match quantities of these sale contracts with an appropriate quantity of corn purchase contracts over a given period of time when we can obtain an adequate gross margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price. Consequently, we generally execute fixed price ethanol contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time during which our fixed price contracts are fulfilled, we generally cannot predict the future movements in our realized crush spread for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations of our ethanol facilities. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swap contracts, in conjunction with certain of our corn procurement activities and commodity marketing activities.

Current wording

We attempt to manage the risk related to the volatility of commodity prices by utilizing forward corn and natural gas purchase contracts, forward ethanol, distillers grains and distillers corn oil sale contracts, and commodity futures agreements, as management deems appropriate. We attempt to match quantities of these sales contracts with an appropriate quantity of corn purchase contracts over a given period of time when we can obtain an adequate gross margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol prices. Consequently, we generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in our realized crush spread for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations of our ethanol facilities.

Previous wording

Through our affiliate, One Earth Energy, LLC, we are in the developmental stage of a carbon sequestration project near the One Earth Energy ethanol plant in Gibson City, IL. A test well has been drilled to a total depth of approximately 7,100 feet, in which almost 2,000 feet of Mt. Simon Sandstone was encountered, which is the geological formation that is the region’s primary carbon storage resource. Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells. In October 2022, we applied for a Class VI injection well permit for three wells with the U.S. Environmental Protection Agency (“EPA”), and we continue to provide information to the EPA during the technical review of our application upon request. We currently expect the EPA to prepare a draft permit by the first quarter of 2025 and make a final permit decision by the third quarter of 2025, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We have now secured sufficient subsurface easements for the proposed first injection well to allow for sequestration of all the carbon emissions from the One Earth Energy ethanol plant for a minimum of 15 years. We also need to obtain a county special-use zoning permit for the sequestration site. Last year, we began construction of a facility to capture, dehydrate, and compress carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration. We are nearing the completion of construction of the capture and compression facility.

Current wording

One Earth Sequestration, LLC, a wholly owned subsidiary of One Earth Energy, LLC, is in the developmental stage of a carbon sequestration project near the One Earth ethanol plant. In October 2022, we applied for a Class VI injection well permit for three wells with the EPA, and we continue to provide information to the EPA upon request during the technical review of our application. We currently expect the EPA to prepare a draft permit by November 2025 and make a final permit decision by April 2026, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We also need to obtain a county special-use zoning permit for the sequestration site. We have completed the construction of the capture and compression facility to capture, dehydrate, and compress carbon dioxide from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin construction of the pipeline or sequestration well until further permits and approvals are received.

Previous wording

In October 2023, we submitted an application to the Illinois Commerce Commission (“ICC”) for a certificate of authority under the state’s Carbon Dioxide Transportation and Sequestration Act (the “CO 2 Act”) to build a short pipeline to deliver carbon dioxide from the One Earth Energy ethanol plant to the proposed sequestration site. We also have obtained easements from all of the necessary landowners for the use of their land for the pipeline for the first two wells. On May 26, 2024, however, the Illinois General Assembly passed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (Senate Bill 1289), which was signed by the governor in July 2024. The new legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO 2 pipelines. Further, the new legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO 2 pipelines until the earlier of the date proposed federal CO 2 pipeline safety standards are finalized by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) or, subject to certain other conditions, July 1, 2026. As a result of this legislation, the ICC dismissed our application without prejudice, and we will be required to resubmit an application after rules are finalized or subsequent to July 1, 2026.

Current wording

We have secured land easements from all necessary landowners to allow the construction of a pipeline on their land to the first two injection wells. We also have landowner subsurface easements for the first injection well with the capacity to allow for carbon sequestration for our One Earth plant for 15 years. The Illinois General Assembly passed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (Senate Bill 1289), which was signed by the Governor in July 2024. The new legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines. Further, the new legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO2 pipelines until the earlier of the date federal CO2 pipeline safety standards are finalized by the federal PHMSA or, subject to certain other conditions, July 1, 2026.

Previous wording

Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth Energy, we continue to work with the various government agencies involved to obtain all required permits and approvals, with no assurance of the ultimate success or timing of the project. Also see the discussion under “Trends and Uncertainties” on page 27 of certain recently proposed legislation that, if enacted, could impact our carbon sequestration project.

Current wording

Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth, we continue to work with the various government agencies involved to obtain all required permits and approvals, with no assurance of the ultimate success or timing of the project. Also see the discussion under “Trends and Uncertainties” of certain recently proposed legislation that, if enacted, could impact our carbon sequestration project.

Previous wording

We also are concurrently expanding the One Earth ethanol plant. We received a construction permit from the EPA to increase production from 150 million gallons of ethanol per year to 175 million gallons of ethanol per year. Once we achieve that level of production, planned for the third quarter of fiscal 2025, we intend to apply for another permit to further increase production to 200 million gallon per year.

Current wording

We also intend to concurrently expand the One Earth ethanol plant. We received a construction permit from the EPA to increase production from 150 million gallons of ethanol per year to 175 million gallons of ethanol per year. Once we achieve that level of production, we intend to apply for another permit to increase production to 200 million gallons per year.

Previous wording

We continue to work to identify ways to reduce our carbon intensity (“CI”) score at the One Earth plant with the intention of maximizing the tax credits available under the Inflation Reduction Act, which created a new Clean Fuel Production Credit under 45Z of the Internal Revenue Code (“45Z”), available for calendar years 2025 – 2027, of approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI point threshold to incentivize further increases in plant efficiencies within the industry. The U.S. Department of the Treasury has not yet issued final rules on qualification for 45Z tax credits.

Current wording

We continue to work to identify ways to reduce our CI score at the One Earth plant with the intention of maximizing tax credits available under the IRA. The IRA created a new Clean Fuel Production Credit, available for calendar years 2025 – 2027, which established a credit of approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI score threshold to incentivize further increases in plant efficiencies within the industry. The U.S. Department of the Treasury has not yet issued final rules on qualification for 45Z tax credits.

Previous wording

We expect the total cost of these projects to be approximately $165-175 million, which we continue to pay from our available cash. As of October 31, 2024, we have spent $52.9 million life-to-date and are contractually committed to spend an additional $2.4 million toward the carbon sequestration project. If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q of the Internal Revenue Code (“45Q”) and section 45Z of the Internal Revenue Code, as outlined in the Inflation Reduction Act, with 45Z credits being subject to final guidance yet to be issued by the U.S. Department of the Treasury. As of October 31, 2024, we have spent $50.2 million life-to-date and are contractually committed to spend an additional $7.4 million at the One Earth plant toward plant capacity expansion and ongoing efforts to reduce our CI scoring.

Current wording

We currently budget capital expenditures for both projects to be approximately $220 million to $230 million, subject to further refinement as we move forward. We plan to pay for all expenditures from available cash. As of April 30, 2025, we had spent $56.3 million since inception and were contractually committed to spend an additional $0.9 million toward the carbon sequestration project. If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q, based on tons of carbon sequestered, and section 45Z, based on gallons of ethanol produced, as outlined in the IRA. However, 45Z credits are only available for calendar years 2025 – 2027 and the regulations have not yet been finalized by the U.S. Department of the Treasury. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. As of April 30, 2025, we had spent $66.4 million since inception and were contractually committed to spend an additional $8.3 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.

Previous wording

All references in this report to a particular fiscal year are to REX’s fiscal year ended January 31. The Company refers to its fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, “fiscal year 2024” means the period February 1, 2024 to January 31, 2025. The Company includes the results of operations of One Earth Energy, LLC (“One Earth”) in its Consolidated Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end of December 31.

Current wording

All references in this report to a particular fiscal year are to REX’s fiscal year ended January 31. The Company refers to its fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, “fiscal year 2025” means the period February 1, 2025 to January 31, 2026. The Company includes the results of operations of One Earth in its Consolidated Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end of December 31.

Previous wording

In addition, under RFS II, a small refiner that processes less than 75,000 barrels of oil per day can petition the EPA for a waiver of their obligation to submit renewable identification numbers (“RINs”). The EPA, through consultation with the Department of Energy and the U.S. Department of Agriculture (“USDA”), can grant the refiner a full or partial waiver, or deny the waiver petition. The EPA issued 88 small refinery exemptions (“SREs”) for the 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA did not grant any small refinery waivers for 2019-2022 and has continued that stance in the proposed volumes for 2023-2025. There remain multiple ongoing legal challenges to how the EPA has handled the small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of Columbia Circuit vacated many of the EPA’s 2022 SRE denials. The EPA had denied 105 SREs in 2022. As a result of this Court ruling, the EPA has voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. On November 21, 2024, the EPA reported that 130 SRE petitions were then pending under the RFS, up from 50 as of mid-September. The increase is attributed to submissions from small refineries seeking reconsideration of petitions that were previously denied.

Current wording

Renewable Fuel Standard II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States. In recent years, there has been much uncertainty in the enforcement of RFS II. When it was originally established, RFS II required the volume of “conventional” or corn derived ethanol to be blended with gasoline to increase each year until it reached 15.0 billion gallons in 2015 and required that it remain at that level through 2022. There are no established congressional target volumes beginning in 2023. The EPA has the authority to waive the biofuel mandate, in whole or in part, if there is inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition, under RFS II, a small refiner that processes less than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement to submit RINs. The EPA, through consultation with the Department of Energy and the Department of Agriculture, can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 88 refinery exemptions for 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA has not granted any small refinery waivers for 2019-2022. There remain multiple ongoing legal challenges on how the EPA has handled the small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of Columbia Circuit vacated many of the EPA’s 2022 SRE denials. The EPA had denied 105 SREs in 2022. As a result of this Court ruling, the EPA voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. During the previous Trump administration, the EPA granted more SREs than under other administrations. These and additional SREs could lead to decreased RIN values and ethanol pricing. As of May 2025, there were 169 SRE petitions pending.

Previous wording

The EPA has issued Renewable Fuel Standard volume obligations for calendar years 2023-2025 for conventional biofuels (which includes corn-based ethanol) of 15.0 billion gallons for each year. Additionally, for 2023, the EPA restored 250 million gallons previously waived.

Current wording

The EPA has issued Renewable Fuel Standard volume obligations for calendar years 2023-2025. The volumes from conventional biofuels (which includes corn-based ethanol) were 15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. The EPA was required to propose RVOs for 2026 by November 2024, but that deadline was missed. The EPA delivered the proposed 2026 RVOs to the White House Office of Management and Budget on May 14, 2025, which is the final step before being released to the public for comments.

Previous wording

The Inflation Reduction Act will likely impact our business by creating a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code (“45Z”), available for the years 2025 to 2027. The Clean Fuel Production Credit is approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI point threshold. The Act also raises the carbon capture tax credit from $50 per metric ton to $85 per metric ton under section 45Q. Taxpayers may elect to be treated as making a payment against tax for 100% of the value of the 45Q credit (“direct pay”) for the first five years, starting with the year a qualifying carbon sequestration facility is placed in service, but not beyond December 31, 2032. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. Other potential impacts of the Inflation Reduction Act include (a) extension of the biodiesel tax credit, which could support the value of our renewable corn oil, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production; (b) creation of new tax credit for sustainable aviation fuel (“SAF”); (c) funding of biofuel refueling infrastructure which could increase the availability of higher level ethanol blended fuel; and (d) provision for production and purchase credits for electric vehicles, which could reduce the amount of internal combustion engines on the road over time, and ultimately reduce the demand for gasoline, diesel fuels and ethanol.

Current wording

The IRA may impact our business by creating a new Clean Fuel Production Credit, section 45Z, available for years 2025 to 2027. The Clean Fuel Production Credit is established at approximately $0.02 per ethanol gallon per CI point reduction below a 50 CI score threshold. The Act also raises the carbon capture tax credit from $50 per metric ton to $85 per metric ton, under section 45Q. Taxpayers may elect to be treated as making a payment against tax for 100% of the value of the 45Q credit (“direct pay”) for the first five years, starting with the year a qualifying carbon sequestration facility is placed in service, but not beyond December 31, 2032. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. Other potential impacts include (a) extending the biodiesel tax credit, which could impact our renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production; (b) creating a new tax credit for synthetic aviation fuel; (c) funding biofuel refueling infrastructure which could impact the availability of higher level ethanol blended fuel; and (d) provision for production and purchase credits for electric vehicles, which could impact the amount of internal combustion engines on the road over time, and ultimately reduce the demand for gasoline, diesel fuels and ethanol.

Previous wording

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, for approximately $12.0 million, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. As the plant was no longer eligible to receive federal production tax credits beginning on November 18, 2021, we ceased operations on that date. We began classifying this operation as discontinued operations in the third quarter of fiscal 2021. Over the course of operation, we recognized $58.2 million in tax credits. The federal production tax credits received through operation of this facility remain under IRS audit.

Current wording

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. As the plant was no longer eligible to receive federal production tax credits beginning on November 18, 2021, we ceased operations on that date and subsequently sold the facility. The approximately $58.2 million of federal production tax credits received through ownership of this facility remain under IRS audit.

Previous wording

Comparison of Three and Nine Months Ended October 31, 2024 and 2023

Current wording

Comparison of Three Months Ended April 30, 2025 and 2024

Previous wording

Net sales and revenue in the quarter ended October 31, 2024 decreased 21% compared to the prior year’s third quarter. Net sales and revenue in the first nine months ended October 31, 2024 decreased approximately 25% compared to the first nine months of 2023.

Current wording

Net sales and revenue in the quarter ended April 30, 2025 decreased 2% compared to the prior year first quarter.

Previous wording

Dried distillers grains revenue decreased 28% in the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 as the average price per ton sold decreased 25%, coupled with a 5% decrease in tons sold. Dried distillers grains revenue decreased 27% in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023, driven by a 25% decrease in the average selling price, along with a 3% decrease in the tons sold. The decrease in the dried distillers grains selling price resulted primarily from a decrease in corn prices as dried distillers grains prices often correlate with corn pricing.

Current wording

Dried distillers grains revenue decreased 27% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the average price per ton sold decreased 22%, coupled with a 6% decrease in tons sold. The decrease in the dried distillers grains selling price is consistent with recent quarters and reflects an extended period of lower corn pricing as dried distillers grains prices often correlate with corn pricing. The decrease in tons sold was partially offset by an increase in tons of modified distillers grains sold, but also impacted by lower production levels. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.

Previous wording

Distillers corn oil revenue decreased approximately 31% in the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 as the average price per pound sold decreased 28%, along with a 3% decrease in pounds sold. Distillers corn oil revenue decreased 27% in the first nine months of 2024 compared to the first nine months of 2023 as the average price per pound decreased 27%, along with a 1% decrease in pounds sold. The decrease in the distillers corn oil selling price resulted primarily from fluctuations in demand with the renewable biodiesel market and is often tied to the price of soybean oil.

Current wording

Distillers corn oil revenue increased approximately 1% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased 2%, offset by a 2% decrease in the average price per pound. The decrease in the distillers corn oil selling price resulted primarily from fluctuations in demand in the renewable biodiesel market which often reflects the price of soybean oil.

Previous wording

Modified distillers grains revenue did not change in the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 due to a 36% increase in the tons sold, offset by a decrease in the average selling price per ton sold of 27%. Modified distillers grains revenue decreased 9% in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023 due to a 34% decrease in the average selling price per ton sold, offset by a 39% increase in tons sold during the same period. The decrease in the modified distillers grains selling price resulted primarily from a decrease in corn prices as prices tend to move in the same direction. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.

Current wording

Modified distillers grains revenue increased 36% in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 as the amount of pounds sold increased by 52%, offset partially by a decrease in the average selling price per ton sold of 11%. The decrease in the modified distillers grains selling price resulted primarily from an extended period of lower corn prices as prices tend to move in the same direction. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.

Previous wording

Cost of sales decreased approximately 26% in the quarter ended October 31, 2024, compared to the prior year third quarter. Corn accounted for approximately 76% ($102.6 million) of our cost of sales during the third quarter of fiscal year 2024 compared to approximately 80% ($145.2 million) during the third quarter of fiscal year 2023. Natural gas accounted for approximately 3% of our cost of sales during the third quarter of fiscal year 2024 ($4.6 million) and the third quarter of fiscal year 2023 ($6.2 million). Cost of sales decreased approximately 29% in the nine-months ended October 31, 2024, compared to the prior year comparable period. Corn accounted for approximately 76% ($312.2 million) of our cost of sales during the first nine months of fiscal year 2024 compared to approximately 81% ($467.0 million) during the first nine months of fiscal year 2023. Natural gas accounted for approximately 4% of our cost of sales during the nine months ended October 31, 2024 ($15.6 million) and during the first nine months of fiscal year 2023 ($23.3 million). The cost of corn and natural gas decreased primarily due to lower pricing for both during the three and nine months ended October 31, 2024.

Current wording

Cost of sales decreased 2% in the quarter ended April 30, 2025, compared to the prior year first quarter. Corn accounted for approximately 74% ($106.3 million) of our cost of sales during the first quarter of fiscal year 2025 compared to approximately 75% ($110.6 million) during the first quarter of fiscal year 2024. Natural gas accounted for approximately 6% ($8.1 million) of our cost of sales during the first quarter of fiscal year 2025 and 5% ($7.1 million) in the first quarter of fiscal year 2024.

Previous wording

As a result of the foregoing, gross profit for the third quarter of fiscal year 2024 increased approximately $0.4 million compared to the prior year’s third quarter. Gross profit for the first nine months of fiscal year 2024 increased approximately $6.1 million compared to the first nine months of fiscal year 2023.

Current wording

As a result of the foregoing, gross profit for the first quarter of fiscal year 2025 decreased approximately $0.1 million compared to the prior year first quarter.

Previous wording

During the third quarter of fiscal year 2024, we recognized income from our equity investment in Big River of approximately $3.6 million compared to income of approximately $4.7 million for the third quarter of fiscal year 2023. During the first nine months of fiscal year 2024, we recognized income from our equity investment in Big River of approximately $7.1 million compared to income of approximately $9.3 million during the first nine months of fiscal year 2023. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 38.5 million gallons of ethanol shipped in the trailing twelve months ended October 31, 2024. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Current wording

During the first quarter of fiscal year 2025, we recognized income from our equity investment in Big River of approximately $1.0 million compared to income of approximately $1.7 million for the first quarter of fiscal year 2024. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 39.2 million gallons of ethanol shipped in the trailing twelve months ended April 30, 2025. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Previous wording

Interest and other income was approximately $4.6 million for the third quarter of fiscal year 2024 versus approximately $4.9 million for the third quarter of fiscal year 2023. Interest and other income was approximately $15.0 million for the first nine months of 2024 versus approximately $10.9 million for the first nine months of fiscal year 2023. One of our consolidated ethanol plants recognized $1.2 million in patronage income from an investment in a cooperative in the first quarter of 2024. During 2023, the Company’s consolidated plants received COVID-19 relief grants from the USDA of approximately $0.9 million and $1.0 million for the three- and nine-month periods ended October 31, 2023. The remaining change between the year-to-date periods related to increased interest income in the current year based upon higher balances and yields on our excess cash and short-term investments in fiscal year 2024, compared to 2023.

Current wording

Interest and other income was approximately $4.2 million for the first quarter of fiscal year 2025 versus approximately $5.9 million for the first quarter of fiscal year 2024. The decrease is primarily related to decreased interest income of $1.3 million in the current year based upon lower balances and yields on our excess cash and short-term investments in fiscal year 2025, compared to 2024. One of our consolidated ethanol plants recognized $0.5 million less in patronage income from an investment in a cooperative in the first quarter of 2025 ($0.7 million) compared to the first quarter of 2024 ($1.2 million). We do not expect patronage income from this investment in a cooperative to be significant in future periods.

Previous wording

As a result of the foregoing, income before income taxes was approximately $39.5 million and $41.3 million for the third quarters of fiscal year 2024 and 2023, respectively. Income before income taxes was approximately $75.0 million and $66.0 million for the first nine months of fiscal year 2024 and 2023, respectively.

Current wording

As a result of the foregoing, income before income taxes was approximately $13.6 million and $16.0 million for the first quarters of fiscal year 2025 and 2024, respectively.

Previous wording

The Company applies an effective tax rate to interim periods that is consistent with the Company’s estimated annual tax rate as adjusted for discrete items impacting the interim periods. Our income tax provision was approximately $9.4 million and $9.6 million for the three months ended October 31, 2024 and 2023, respectively. Our income tax provision was approximately $17.6 million and $15.4 million for the first nine months of fiscal year 2024 and 2023, respectively.

Current wording

The Company applies an effective tax rate to interim periods that is consistent with the Company’s estimated annual tax rate as adjusted for discrete items impacting the interim periods. Ourincome tax provision was approximately $3.0 million and $3.7 million for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

As a result of the foregoing, net income was approximately $30.1 for the third quarter of fiscal year 2024 compared to approximately $31.6 million for the third quarter of fiscal year 2023. Net income was approximately $57.4 million for the first nine months of fiscal year 2024 compared to approximately $50.6 million for the first nine months of fiscal year 2023.

Current wording

As a result of the foregoing, net income was approximately $10.7 million for the first quarter of fiscal year 2025 compared to approximately $12.3 million for the first quarter of fiscal year 2024.

Previous wording

Net income attributable to noncontrolling interests was approximately $5.6 million for the third quarters of fiscal year 2024 and 2023. Net income attributable to noncontrolling interests was approximately $10.3 million for the first nine months of fiscal years 2024 and 2023. These amounts represent the other owners’ share of the income of NuGen and One Earth.

Current wording

Net income attributable to non-controlling interests was approximately $2.0 million for the first quarter of fiscal year 2025 and $2.1 million for the first quarter of 2024. These amounts represent the other owners’ share of the income of NuGen and One Earth.

Previous wording

As a result of the foregoing, net income attributable to REX common shareholders for the third quarter of fiscal year 2024 was approximately $24.5 million, compared to net income attributable to REX common shareholders of approximately $26.1 million for the third quarter of fiscal year 2023. Net income attributable to REX common shareholders from the first nine months of fiscal year 2024 was approximately $47.1 million, compared to net income attributable to REX common shareholders of approximately $40.4 million for the first nine months of fiscal year 2023.

Current wording

As a result of the foregoing, net income attributable to REX common shareholders for the first quarter of fiscal year 2025 wasapproximately$8.7 million, compared to net income attributable to REX common shareholders ofapproximately$10.2 million for the first quarter of fiscal year 2024.

Previous wording

Net cash provided by operating activities was approximately $39.1 million for the first nine months of fiscal year 2024, compared to net cash provided by operating activities of approximately $65.5 million for the first nine months of fiscal year 2023. For the first nine months of fiscal year 2024, cash was provided by net income of approximately $57.4 million, adjusted upward for non-cash items of approximately $20.3 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision, stock-based compensation expense, and loss on disposal of property and equipment. We received dividends from Big River of approximately $3.0 million. A decrease in the balance of accounts receivable provided cash of approximately $0.9 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventories increased over the first nine months of fiscal year 2024, using cash of approximately $2.1 million. An increase in the balance of other assets of approximately $12.6 million primarily relates to prepayments on certain executed lease agreements, offset by changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value, decreases to spare parts inventory and decreases to prepaid insurance balances. A decrease in the balance of refundable income taxes of approximately $0.2 million primarily relates to the accrual of the federal taxes currently payable and the timing of estimated tax payments for the first nine months of 2024. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable used cash of approximately $21.6 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $6.2 million, which was primarily caused by the reduction in the lease liability of $4.0 million from payments made during the year. Additionally, a decrease in accrued payroll and accrued utility liabilities used cash of approximately $0.6 million and $1.3 million, respectively. The decrease in the accrued payroll is primarily related to the payment of the 2023 incentive bonuses, offset partially by the accrual of the 2024 incentive bonuses to be paid in 2025. Other offsetting fluctuations within other liabilities were insignificant.

Current wording

Net cash used in operating activities was approximately $3.5 million for the first quarter of fiscal year 2025, compared to net cash used in operating activities of approximately $2.3 million for the first quarter of fiscal year 2024. For the first quarter of fiscal year 2025, cash was provided by net income of approximately $10.7 million, adjusted upward for non-cash items of approximately $4.4 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision, and stock-based compensation expense. An increase in the balance of accounts receivable used cash of approximately $6.5 million, primarily as a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventories decreased over the first quarter of fiscal year 2025, providing cash of approximately $1.2 million. A decrease in the balance of other assets of approximately $0.1 million primarily related to decreases in prepaid insurance as well as by changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value, offset by increases in spare parts inventory and other prepaid balances. An increase in the balance of refundable income taxes of approximately $0.9 million primarily relates to the accrual of the federal taxes currently payable being less than estimated federal tax payments made to date. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable used cash of approximately $8.9 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $3.8 million, which was primarily caused by a decrease in accrued payroll which used cash of approximately $5.2 million, due to the timing of annual bonus payments. Additionally, a decrease in the lease liability used cash of $1.5 million based on payments made during the quarter. These decreases are partially offset by an increase in other current liabilities of $3.0 million.

Previous wording

Net cash provided by operating activities was approximately $65.5 million for the first nine months of fiscal year 2023. For the first nine months of fiscal year 2023, cash was provided by net income of approximately $50.6 million, adjusted for non-cash items of approximately $16.3 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision, stock-based compensation expense, and loss on disposal of property and equipment. We received dividends from Big River of approximately $5.5 million. An increase in the balance of accounts receivable used cash of approximately $5.0 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventories decreased over the first nine months of fiscal year 2023, providing cash of $11.2 million. An increase in the balance of other assets of approximately $1.3 million primarily relates to changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value. An increase in the balance of refundable income taxes of approximately $1.5 million primarily relates to overpayment of taxes currently payable for the previous fiscal year and quarterly estimated tax payments. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable used cash of approximately $5.6 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $4.8 million.

Current wording

Net cash used in operating activities was approximately $2.3 million for the first quarter of fiscal year 2024. For the first quarter of fiscal year 2024, cash was provided by net income of approximately $12.3 million, adjusted upward for non-cash items of approximately $5.6 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision, and stock-based compensation expense. A decrease in the balance of accounts receivable provided cash of approximately $1.7 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventories were nearly flat over the first three months of fiscal year 2024. An increase in the balance of other assets of approximately $3.8 million primarily related to prepayments on certain executed lease agreements, offset by changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value. A decrease in the balance of refundable income taxes of approximately $1.1 million primarily relates to the accrual of the federal taxes currently payable for first quarter of 2024. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed. A decrease in the balance of accounts payable used cash of approximately $12.7 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $6.2 million, which was primarily caused by a decrease in accrued payroll of approximately $5.4 million following the payment of fiscal year 2023 bonuses.

Previous wording

At October 31, 2024, working capital was approximately $392.5 million, compared to $385.8 million at January 31, 2024. The ratio of current assets to current liabilities was 9.9 to 1 at October 31, 2024 and 6.8 to 1 at January 31, 2024.

Current wording

At April 30, 2025, working capital was approximately $356.2 million, compared to $385.4 million at January 31, 2025. The ratio of current assets to current liabilities was 9.4 to 1 at April 30, 2025 and 8.6 to 1 at January 31, 2025.

Previous wording

Cash of approximately $37.6 million was provided by investing activities for the first nine months of fiscal year 2024, compared to cash used in investing activities of approximately $63.3 million during the first nine months of fiscal year 2023. During the first nine months of fiscal year 2024, the Company had capital expenditures of approximately $55.4 million, primarily for various capital projects at our consolidated ethanol plants, including $24.5 million for expansion and CI scoring reduction projects at the One Earth facility and $22.4 million for the carbon sequestration project. During the first nine months of fiscal year 2024, we purchased short-term U.S. Treasury Bills of approximately $210.3 million, while U.S. Treasury Bills of approximately $303.0 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments. Depending on the investment options available, we may elect to retain the funds, or a portion thereof, in cash, short-term investments or long-term investments.

Current wording

Cash of approximately $1.8 million was provided by investing activities for the first quarter of fiscal year 2025, compared to cash provided by investing activities of approximately $11.9 million during the first quarter of fiscal year 2024. During the first quarter of fiscal year 2025, the Company had capital expenditures of approximately $6.9 million, primarily for various capital projects at our consolidated ethanol plants, including $5.1 million for expansion and CI scoring reduction projects at the One Earth facility and $0.7 million for the carbon sequestration project. During the first quarter of fiscal year 2025, we purchased short-term U.S. Treasury Bills of approximately $41.4 million, while U.S. Treasury Bills of approximately $50.0 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments. Depending on the investment options available, we may elect to retain the funds, or a portion thereof, in cash, short-term investments or long-term investments.

Previous wording

Cash of approximately $63.3 million was used in investing activities for the first nine months of fiscal year 2023. During the first nine months of fiscal year 2023, we had capital expenditures of approximately $22.4 million, primarily for various capital projects at our consolidated ethanol plants, including $7.7 million for expansion and CI scoring reduction projects at the One Earth facility and $8.0 million for the carbon sequestration project. During the first nine months of fiscal year 2023, we purchased U.S. Treasury Bills of approximately $378.4 million. During the first nine months of fiscal year 2023 U.S. Treasury Bills of approximately $337.5 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments.

Current wording

Cash of approximately $11.9 million was provided by investing activities for the first quarter of fiscal year 2024. During the first quarter of fiscal year 2024, we had capital expenditures of approximately $24.8 million, primarily for various capital projects at our consolidated ethanol plants, including $10.1 million for expansion and CI scoring reduction projects at the One Earth facility and $11.0 million for the carbon sequestration project. During the first quarter of fiscal year 2024, we purchased U.S. Treasury Bills of approximately $85.0 million. During the first quarter of fiscal year 2024 U.S. Treasury Bills of approximately $121.5 million matured. The U.S Treasury Bills had maturities of less than one year and we classified them as short-term investments.

Previous wording

We are investigating various uses for our excess cash and short-term investments. We expect total capital expenditures related to the construction at the One Earth facilities to approximate $165 million to $175 million, inclusive of the carbon sequestration project and plant capacity expansion and ongoing efforts to reduce CI scoring, which we currently plan to pay from our available cash. As of October 31, 2024, we have spent $52.9 million since inception and are contractually committed to spend an additional $2.4 million toward the carbon sequestration project. As of October 31, 2024, we have spent $50.2 million since inception and are contractually committed to spend an additional $7.4 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan to spend $25 million to $35 million during the remainder of fiscal year 2024.

Current wording

We are investigating various uses for our excess cash and short-term investments. We expect total capital expenditures related to the construction at the One Earth facilities to approximate $220 million to $230 million, inclusive of the carbon sequestration project and plant capacity expansion and ongoing efforts to reduce CI scoring, which we currently plan to pay from our available cash. This estimate is subject to further refinement as the project progresses. As of April 30, 2025, we had spent $56.3 million since inception and were contractually committed to spend an additional $0.9 million toward the carbon sequestration project. As of April 30, 2025, we had spent $66.4 million since inception and were contractually committed to spend an additional $8.3 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan to spend $60 million to $80 million during the remainder of fiscal year 2025.

Previous wording

We have a stock buyback program with 876,786 shares remaining authorized at October 31, 2024. We typically repurchase our common stock when our stock price is trading at a price we deem to be a discount to the underlying value of our net assets. We continue to seek investment opportunities, including ethanol and/or energy related, carbon sequestration related, agricultural or other ventures, we believe meet our investment criteria.

Current wording

We have a stock buyback program with 1,181,963 shares remaining authorized at April 30, 2025. We typically repurchase our common stock when our stock price is trading at a price we deem to be a discount to the underlying value of our net assets. We continue to seek investment opportunities, including ethanol and/or energy related, carbon sequestration related, agricultural or other ventures, we believe meet our investment criteria.

Previous wording

This Form 10-Q contains or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the effect of pandemics such as COVID-19 on the Company’s business operations, including impacts on supplies, demand, personnel and other factors, the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, distillers corn oil, gasoline and natural gas, commodity market risk, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy, changes in foreign currency exchange rates and the effects of terrorism or acts of war. The Company does not intend to update publicly any forward-looking statements except as required by law. Other factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024 (File No. 001-09097).

Current wording

This Form 10-Q contains or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, distillers corn oil, gasoline and natural gas, commodity market risk, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy and tariffs, changes in foreign currency exchange rates, the effects of terrorism or acts of war and the effect of pandemics on the Company’s business operations, including impacts on supplies, demand, personnel and other factors. The Company does not intend to update publicly any forward-looking statements except as required by law. Other factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 (File No. 001-09097).