Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 34

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 Estimates 

During the six months ended July 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 Statements of Operations on a delayed basis of one month as
One Earth has a fiscal year end of December 31.

Results of Operations

Trends and Uncertainties 

Renewable Fuel
Standard II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States.
There has been much uncertainty in the enforcement of RFS II. When it was originally established, RFS II required the volume
of “conventional” or corn derived ethanol to be blended with gasoline to increase each year until it reached 15.0
billion gallons in 2015 and required that it remain at that level through 2022. There are no established congressional target
volumes beginning in 2023. The EPA has the authority to waive the biofuel mandate, in whole or in part, if there is
inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition,
under RFS II, a small refiner that processes fewer than 75,000 barrels of oil per day can petition the EPA for a waiver
of their requirement to submit RINs. The EPA, through consultation with the United States Department of Energy and the USDA,
can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 88 refinery exemptions for 2016-2018
compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA did not grant
any small refinery waivers for 2019-2022. There have been multiple ongoing legal challenges on how the EPA has handled the
small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of