Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 63

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 8
Chunk 63
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 the accompanying consolidated financial statements.

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.

9

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. 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 ethanol,
distillers grains and distillers corn oil when obligations under the terms of the respective contracts with customers are satisfied;
this occurs with the transfer of control of products, generally upon shipment from the ethanol plant or upon loading of the rail
car used to transport the products.

Cost of Sales	

Cost of sales includes depreciation, costs
of raw materials, third-party freight charges, purchasing and receiving costs, inspection costs, other distribution expenses, warehousing
costs, plant repair and maintenance costs, production labor and related payroll costs, and general facility overhead charges.

Selling, General and Administrative Expenses

The Company includes non-production related
costs such as professional fees, selling charges, operating lease expense, and certain payroll in