Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 6

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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 conjunction with the consolidated
financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January
31, 2025. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the
year.

Basis of Consolidation – The
consolidated financial statements in this report include the operating results and financial position of the Company. All intercompany
balances and transactions have been eliminated. The Company consolidates the results of its wholly owned and majority owned subsidiaries.
The Company includes the results of operations of One Earth Energy, LLC in its Consolidated Statements of Operations on a delayed
basis of one month as One Earth has a fiscal year end of December 31.

Nature of Operations – The
Company has one reportable segment, ethanol and by-products. Within the ethanol and by-products segment, the Company has equity
investments in three ethanol limited liability companies, two of which are majority ownership interests.

In applying the criteria set forth in ASC
280, the Company determined that based on the nature of the products and production process and the expected financial results,
the Company’s operations at its ethanol plants are aggregated into one reporting segment.

Note 2. Accounting Policies

The interim consolidated financial statements
have been prepared in accordance with the accounting policies described in the notes to the consolidated financial statements included
in the Company’s fiscal year 2024 Annual Report on Form 10-K. While management believes that the procedures followed in the
preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that
will exist or calculations that will be accomplished at fiscal year-end.

8

Examples of such estimates include accrued liabilities, such
as management bonuses, and the provision for income taxes. Any adjustments pursuant to such estimates during the quarter were of
a normal recurring nature. Actual results could differ from those estimates.

Use of Estimates

The preparation
of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and
cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months
or less.

Revenue Recognition

The Company recognizes sales of