Financial Analysis

Note 13. Commitments and Contingencies The Company may be involved in various legal actions arising in the normal course of business, from time to time. After taking into consideration legal counsels evaluations of any such action(s), management is of the opinion that their outcome will not have a material adverse effect on the Companys Consolidated Financial Statements. There were no material liabilities recorded for legal actions at July 31, 2026 as the Company did not believe that there was a probable and reasonably estimable significant loss associated with any legal contingencies. At July 31, 2026, One Earth and NuGen had combined forward purchase contracts for approximately 15.6 million bushels of corn, the principal raw material for their ethanol plants, and they had combined forward purchase contracts for approximately 1.7 million MmBtu (million British thermal unit) of natural gas. At July 31, 2026, One Earth and NuGen had combined sales commitments for approximately 51.7 million gallons of ethanol, approximately 106,400 tons of distillers grains and approximately 19.7 million pounds of distillers corn oil. One Earth entered into a 15-year agreement, effective February 1, 2019, with an unrelated party for the use of a portion of that partys natural gas pipeline, with monthly payments of $29,250. One Earth paid approximately $88,000 in the three month periods ended July 31, 2026 and 2025 and $176,000 in the six month periods ended July 31, 2026 and 2025, pursuant to t …

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Note 11. Employee Benefits Until its expiration on June 1, 2025, the Company maintained the REX American Resources Corporation 2015 Incentive Plan, approved by its shareholders, which reserved a total of 3,300,000 split-adjusted shares of common stock for issuance pursuant to its terms. At its time of expiration, 1,065,809 shares (pre-2025 split) remained available for issuance under the plan. On May 28, 2026, shareholders approved the REX American Resources Corporation 2026 Incentive Plan, which reserves a total of 1,500,000 shares of common stock pursuant to its terms. The plan provides for the granting of shares of stock, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted stock unit awards to eligible employees, non-employee directors and consultants. The Company measures share-based compensation grants at fair value on the grant date, adjusted for estimated forfeitures. The Company records non-cash compensation expense related to liability and equity awards in its consolidated financial statements over the requisite service period on a straight-line basis. At July 31, 2026, 1,225,277 shares remain available for issuance under the Plan, excluding the impact of the 69,816 restricted stock units that may vest between zero and 139,632 shares of stock depending on certain performance metrics being achieved. Restricted Stock Awards As a component of their compensation, restricted st …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

The following tables shows disaggregated revenue by product (amounts in thousands): Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Ethanol $ 125,777 $ 123,312 $ 245,658 $ 247,709 Dried distillers grains 24,163 21,260 48,326 43,546 Distillers corn oil 17,589 12,509 30,545 22,388 Modified distillers grains 811 1,251 1,845 2,873 Derivative financial instruments gains (losses) 62 201 (1,513) 218 Other 91 30 131 169 Total $ 168,493 $ 158,563 $ 324,992 $ 316,903

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Note 5. Fair Value The Company applies ASC 820, which provides a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company determines the fair market values of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values which are provided below. The Company carries certain cash equivalents, investments, and derivative instruments at fair value. The fair values of derivative assets and liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple market inputs including interest rates, prices and indices to generate pricing and volatility factors, which are used to value the position. The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. Estimation risk is greater for derivative asset and liabi …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 12 . Income Taxes The Companys income tax provision was approximately $7.5 million and $2.8 million for the three months ended July 31, 2026 and 2025, respectively. The effective tax rate was 15.5% and 22.9% for the three months ended July 31, 2026 and 2025, respectively. The Companys income tax provision was approximately $11.9 million and $5.7 million for the six months ended July 31, 2026 and 2025, respectively. The effective tax rate was 16.0% and 22.2% for the six months ended July 31, 2026 and 2025, respectively. The primary causes for the difference between the statutory tax rate and our effective tax rate are the impact from nontaxable income associated with 45Z tax credits, as well as the impact from noncontrolling interests. The Company assessed all available positive and negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization of existing federal deferred tax assets. There is sufficient objectively verifiable income for management to conclude that it is more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration. On July 4, 2025, the OBBBA was signed into law. The OBBBA contains various tax reform provisions affecting businesses, such as the extension of bonus depreciation for assets placed in service after January 19, 2025 and immediate expensing of domestic research and development costs, to result in current deductions that allowed …

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Recently Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) , which provides clarity in assessing an entitys performance and prospects for future cash flows by disclosure of more detailed information about the types of expenses in commonly presented expense captions. This ASU is effective for the Companys fiscal year ended January 31, 2028. The Company is currently evaluating the impact of this ASU. In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) , which establishes accounting and disclosure requirements for environmental credits and environmental credit obligations. The Companys operations involve environmental credits, including RINs and EACs. This ASU is effective for the Companys fiscal year ended January 31, 2029. The Company is currently evaluating the impact of the ASU on its accounting policies, financial statement presentation, and disclosures. The Company has not yet determined the impact that adoption of this standard will have on its consolidated financial statements and related disclosures. …

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Note 14. Related-Party Transactions During the second quarter of fiscal years 2026 and 2025, One Earth and NuGen purchased approximately $21.2 million and $29.0 million, respectively, of corn (and other supplies) from minority equity investors and board members of those affiliates. Such purchases totaled approximately $40.1 million and $53.9 million for the six months ended July 31, 2026 and 2025, respectively. The Company had amounts payable to related parties of approximately $1.0 million and $1.2 million at July 31, 2026 and January 31, 2026, respectively.

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Note 3. Net Sales and Revenue The Company recognizes sales of products 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 or truck used to transport the products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods. Sales, value added and other taxes the Company collects concurrently with revenue producing activities are excluded from net sales and revenue. The majority of the Companys sales have payment terms ranging from 5 to 10 days after transfer of control. The Company has determined that sales contracts do not generally include a significant financing component. The Company has not historically entered into sales contracts in which payment is due from a customer prior to transferring product to the customer. Thus, the Company does not record unearned revenue. The following tables shows disaggregated revenue by product (amounts in thousands): Three Months Ended July 31, Six Months Ended July 31, 2026 2025 2026 2025 Ethanol $ 125,777 $ 123,312 $ 245,658 $ 247,709 Dried distillers grains 24,163 21,260 48,326 43,546 Distillers corn oil 17,589 12,509 30,545 22,388 Modified distillers grains 811 1,251 1,845 2,873 Derivative financial instruments gains (losses) 62 201 (1,513) 218 Other 91 30 131 169 Total $ 168,493 $ 158,563 $ 324,992 $ 316,903 …

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Note 15. Segment Reporting 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 and are consolidated in the financial statements presented. The members of the Executive Committee, consisting of the Executive Chairman of the Board and the Chief Executive Officer, are the Companys chief operating decision maker. The chief operating decision maker uses net income generated from operating segments in determining the allocation of resources and making assessment of Company performance. 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 Companys operations at its ethanol plants are aggregated into one reporting segment, each of which is reviewed in the same manner by the chief operating decision maker. Aggregation into one reporting segment is appropriate based upon the similarity of economic characteristics of the operating segments, including the markets for identical revenue sources and the primary input, corn. The plants in all locations operate in a similar manner to produce ethanol and by-products. The types of customers and how the products are distributed to the customers are similar across each operating entity, consisting of a combination of rail and truck shipments. Fina …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys fiscal year 2025 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. The carrying amo …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing