Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 125

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 2
Chunk 125
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 agreement to be part of Summit Carbon Solutions’ carbon capture and storage pipeline. Should
Summit Carbon Solutions be able to obtain all 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
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

29

 in federal production tax credits received through the ownership
of this facility remain under IRS audit. We have received an Acknowledgement of Facts notice from the IRS that they intend to deny these
tax credits. We intend to vigorously defend these credits.

Critical Accounting Policies and 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