Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 58

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 8
Chunk 58
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 totaling $15.6 million were made
prior to fiscal year 2025, with monthly payments of approximately $39,000 to be made over the term of the lease, which was
determined to be 10 years. The lease term for this lease includes the noncancelable period of the lease and any periods for which
only the Company has the option to cancel but is reasonably expected to continue the lease. Based on this, the lease term was
determined to be 10 years. Control of the facility’s output was transferred to the Company just before the end of the first
quarter of 2025, with monthly payments commencing in the second quarter of 2025. As such, no significant expense has been incurred
to-date as the first full month in service is not until the following quarter.

The weighted average remaining lease term
for the finance lease is 10.0 years as of April 30, 2025. A discount rate of 6.9% was deemed appropriate as an incremental borrowing
rate for a 10 year term.

The following table is a summary of future
minimum rentals on such leases at April 30, 2025 (amounts in thousands):

    Years Ended January 31, 
    Minimum  Rentals 

    Remainder of 2026 
    $391 

    2027 
     469 

    2028 
     469 

    2029 
     469 

    2030 
     469 

    Thereafter 
     2,423 

    Total 
     4,690 

    Less: present value discount 
     1,309 

    Operating lease liabilities 
    $3,381 

Note 5. Fair Value

The Company applies ASC 820, which provides
a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting
standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date.

The Company determines the fair market values
of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to