Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 88

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 8
Chunk 88
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 necessary permits and approvals, the agreement would allow NuGen to share
in the economic benefits of tax credits through the sale of the CO2 output of its ethanol production facility for sequestration,
as well as to 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 CO2 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 tax credits through November 18, 2021, subject to meeting qualified emissions reductions
as governed by Section 45 of the IRC. We ceased operating the facility on November 18, 2021 and subsequently sold the facility.
The approximately $58.2 million in federal production tax credits received through the ownership of this facility remain under
IRS audit. We have received a Notice of Proposed Adjustments from the IRS that they intend to deny these tax

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credits. We intend to vigorously defend these credits.

Critical Accounting Policies and Estimates

During the nine months ended October 31,
2025, we did not change any of our critical accounting policies as disclosed in our 2024 Annual Report on Form 10-K as filed with
the Securities and Exchange Commission on March 28, 2025.

Fiscal Year

All references in this report to a particular
fiscal year are to REX’s fiscal year ended January 31. The Company refers to its fiscal year by reference to the year immediately
preceding the January 31 fiscal year end date. For example, “fiscal year 2025” means the period February 1, 2025 to
January 31, 2026. The Company includes the results of operations of One Earth in its Consolidated