Company: REX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000930413-25-001069
Chunk: 2

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-03-28
Form: 10-K
Item: Item 9
Chunk 2
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Internal Control— Integrated
Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated
March 28, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are
a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with U. S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of
the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising
from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee
and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate
opinions on the critical audit matter or on the accounts or disclosures to which it relates.

  56  

Unrecognized Tax Benefits

As discussed in Note 12, the
Company accounts for uncertainty in income taxes by determining whether it is more likely than not that the position will be sustained
on audit, including resolution of any related tax audits. The Company has total unrecognized tax benefits of approximately $18,880,000
at January 31, 2025 and is currently undergoing a federal income tax examination for