Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 8

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 8
---
 tax credit carryforwards. The Company provides for a valuation allowance if, based on the weight of available
positive and negative evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The
Company paid income taxes of approximately $1.9 million and $0.1 million and received no refunds during the three months ended
April 30, 2025 and 2024, respectively.

As of April 30, 2025, and January 31, 2025,
total unrecognized tax benefits were approximately $18.9 million. Accrued penalties and interest were approximately $105,000 and
approximately $99,000 at April 30, 2025 and January 31, 2025, respectively. If the Company were to prevail on all unrecognized
tax benefits recorded, the provision for income taxes would be reduced by approximately $18.8 million. In addition, the impact
of penalties and interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits
are recorded within income tax expense. On a quarterly basis, the Company accrues for the effects of open uncertain tax positions
and the related potential penalties and interest.

Inventory

Inventories
are carried at the lower of cost or net realizable value. Cost for all inventories is determined using the first-in, first-out
method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonable predictable costs
of completion, disposal, and transportation. Inventory includes direct production costs and certain overhead costs such as depreciation,
property taxes and utilities related to producing ethanol and related by-products. Inventory is permanently written down in instances
when cost exceeds estimated net realizable value; such write-downs are based primarily upon commodity prices as the market value
of inventory is often dependent upon changes in commodity prices. The Company did not record any inventory write-downs at
April 30, 2025. The Company recorded approximately $0.1 million of inventory write-downs in cost of sales at January 31, 2025.
Fluctuations in the write-down of inventory generally relate to the levels and composition of such inventory and changes in commodity
prices at a given point in time.

10

The components of inventory are as follows
as of the dates presented (amounts in thousands):

    April
    30,  2025  
    January 31, 2025 

    Ethanol and other finished