Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 28

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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 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.

In May 2023, NuGen, our majority owned
ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage
pipeline. Should Summit Carbon Solutions be able to obtain all necessary permits and approvals, the agreement would allow NuGen
to share in the economic benefits of tax credits through the sale of the carbon dioxide output of its ethanol production facility
for sequestration, as well as reduce its net carbon emissions. In March 2025, South Dakota signed a bill into law that bans the
use of eminent domain in connection with carbon dioxide pipelines. This act could make the sequestration project for the NuGen
facility more difficult to complete.

We plan to seek and evaluate various investment
opportunities including ethanol and/or energy related, carbon sequestration, agricultural or other ventures we believe fit our
investment criteria. We can make no assurances that we will be successful in our efforts to find such opportunities.

Refined Coal 

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. Using licensed technology, our plant applied two separate chemicals to
convert feedstock coal into refined coal, which was sold to the end user of the refined coal. The refined coal operating results
were subsidized by federal production