REX 10-K & 10-Q changes, risk factors and insider trading

The price of corn is influenced influenced by weather conditions and other factors affecting crop yields, transportation costs, farmer planting decisions,decisions including input costs, exports, foreign production, the value of the U.S. dollar, and general domestic and foreign economic, market and regulatory factors, including, but not limited to, the impacts from the Russian-Ukraine conflictand Middle Eastern conflicts as well as other conflicts and political unrest, both foreign and domestic. These factors include government policies and subsidies with respect to agriculture, international trade and tariffs, tariffs, and global and local demand and supply. The significance and relative effect of these factors on the price of corn is difficult to predict. Any event that tends to negatively affect the production and/or supply of corn, such as adverse weather or crop disease, could could increase corn prices and potentially harm the business of our ethanol plants, to include intermittent production slowdowns or stoppages. Increasing domestic ethanol production could boost the demand for corn and result in increased corn prices. International demand for corn could also result in higher or lower corn prices. Our ethanol plants may also have difficulty, from time to time, in physically sourcing corn on economic terms due to regional supply shortages, transportation issues, delays in farmer marketing decisions or unfavorable local pricing. The corn harvest near our NuGen facility for 2022 was negatively impacted by dry weather and impacted the supply of corn until the 2023 harvest. Such a shortage or price impact could require our ethanol plants to suspend operations which would have a material adverse effect on our consolidated results of operations.

Our ethanol plants rely upon upon third parties for their supply of natural gas, which is consumed as fuel in the production process. The prices for and availability of of natural gas are subject to volatile market conditions. These market conditions often are affected by factors beyond the ethanol plants’ plants’ control, such as weather conditions, overall economic conditions, export market, governmental regulation and foreign and domestic relations, including, but not limited to, the impacts from the Russian-Ukraine conflict.and Middle Eastern conflicts. Significant disruptions in the supply of natural gas could impair or completely prevent the ethanol plants’ ability to economically manufacture ethanol for their customers. Furthermore, increases in natural gas prices may adversely affect results of operations and financial position at our ethanol plants.

Distillers grains compete with other protein-based animal feed products. The price of distillers grains may decrease when the prices of competing feed products decrease. The prices of competing animal feed products are based in part on the prices of the commodities from which these products are made. Historically, sales prices for distillers grains have tracked along with the price of corn and soybean meal. However, there have been instances when the price increase increases for distillers grains hashave lagged increases in corn prices.

Pricing of distillers corn oil is primarily driven driven by the demand from renewable diesel, biodiesel, and to some extent, synthetic aviation fuel markets. Distillers corn oil is marketed as a low-carbon feedstock to be used in these markets which may see expanded demand due to the extended blending tax credit, credits included in the IRA and growing Low Carbon Fuel Standard (“LCFS”) markets, resulting in an impact to distillers corn oil demand. With a lower CI score, distillers corn oil may see improved pricing compared to heating oil and soybean oil, which it has traditionally tracked closely in price. Alternatively, other feedstocks such as cooking oil and animal fats, with lower CI scoring, could be preferred over distillers corn oil. A decrease in the price of or demand for distillers corn oil could negatively impact our results of operations.

According to the RFA, domestic domestic ethanol production capacity is approximately 18.318.5 billion gallons per year. Under RFS II, there were mandated volumes through 2022 for conventional and advanced biofuels. After 2022, RFS volumes are to be determined by the EPA in coordination with the Secretaries of Energy and Agriculture. The EPA has set conventional renewable fuel volumes of 15.0 billion gallons for 2023 through 2025. In addition, for 2023 theythe EPA restored 250 million gallons previously waived. On March 27, 2026, the EPA issued RVOs for 2026 and 2027 of 15.0 billion gallons of conventional ethanol for each year. The implied excess capacity over the EPA proposed proposed volumes could have an adverse effect on the results of our operations. In a manufacturing industry with excess capacity, producers have an incentive to manufacture additional products for so long as the price exceeds the marginal cost of production production (i.e., the cost of producing only the next unit, without regard for interest, overhead or fixed costs). This incentive could result in the reduction of the market price of ethanol to a level that is inadequate to generate sufficient cash flow to cover costs.

A decrease in demand for ethanol may mayalso result in excess capacity, which could result from a number of factors, including, but not limited to, regulatory developments, developments and reduced U.S. gasoline consumption.consumption, and increases in gasoline prices. Reduced gasoline consumption could occur as a result of increased prices for gasoline or crude oil, which could cause businesses and consumers to reduce driving or acquire vehicles with more favorable gasoline gasoline mileage or acquire non-gasoline powered vehicles. In addition, decreased overall economic activity could also lead to reduced gasoline gasoline consumption.

There are limited markets for ethanol other than than what is federally mandated. Increased consumer acceptance of E15E-15 and E85E-85 fuel is likely necessary in order for ethanol to achieve significant market share growth beyond federal mandate levels.

Consumer demand for gasoline may be impacted by by emerging transportation trends, such as hybrid and electric vehicles. NumerousSome automobile manufacturers have announced plans to phase out internal combustion engine production by the mid-2030s. There also have been pledges to ban the sale of internal combustion engines in countries such as Japan and the United Kingdom by 2035, as well as a statewide ban in California, which several states are imitating. If realized, these bans would accelerate the decline of liquid fuel demand and by extension demand for ethanol, biodiesel and renewable diesel. Recent federal legislation seeks to address the ever-increasing demand for electric vehicle infrastructure. Reduced demand for ethanol could cause our results of operations to be materially impacted.

If we are not successful on this project, our our ethanol plant could be at a disadvantage in the industry as our inability to sequester our carbon could result in a higher CI score than our competitors if they are able to sequester their carbon. If we are unable to reduce our CI score, we may not be able to participate in the state and federal clean fuel programs, including federal tax credits outlined in the IRA.IRA and OBBBA.

In addition to our planned carbon sequestration facility near our One Earth Energy ethanol plant, we have signed an agreement to deliver our carbon from the NuGen Energy facility to to an outside party. These projects may not result in any realized benefit due to delays or suspended operations. Investments being made made in these projects are based on regulatory guidelines, such as modeling for CI reductions, that may be adjusted outside of our control and could deviate from our current strategy. Federal guidelines within the IRA could be changed to no longer include corn-based ethanol from being eligible for certain tax incentives. Delays in the issuance or regulations or the elimination of clean fuel and other incentives at the federal, state or local level could adversely affect our business. New legislation limiting our ability to sequester carbon could be adopted at the federal, state or local levels.

We have secured land easements from all necessary landowners to allow the construction of the CO2 connector pipeline on their land from the ethanol plant to the first two injection wells for our carbon sequestration project near the One Earth Energy ethanol facility. We also have landowner subsurface easements for the first injection well with capacity sufficient to allow for carbon sequestration for our One Earth plant for an estimated 15 years. In July 2024, the governor of Illinois signed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act. This legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines. Further, the legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO2 pipelines until the earlier of the date federal CO2 pipeline safety standards are finalized by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) or, subject to certain other conditions, July 1, 2026. As a result of this legislation, the ICC dismissed our pipeline application without prejudice, and we will be required to resubmit an application after rules are finalized or subsequent to July 1, 2026. The delays and additional requirements imposed as a result of this act could have an adverse impact on the cost and completion of our project.

The renewable fuel standard program was authorized authorized under the Energy Policy Act of 2005 and was expanded under the EnergyEISA. Independence and Security Act of 2007 (EISA). EISA increased the amount of renewable fuel required to be blended into gasoline with RFS II and required a minimum usage of corn-derived renewable fuels of 12.0 billion gallons in 2010, increasing annually by 600 million gallons to 15.0 billion gallons in 2015 through 2022, with no specified volume subsequent to 2022. After 2022, RFS volumes are to be determined by the EPA in coordination with the Secretaries of Energy and Agriculture. The EPA has the authority to assign the mandated amounts of renewable fuels to be blended into transportation fuel to individual fuel blenders. RFS II has been a primary factor in the growth of ethanol usage. Over the past several years various pieces of legislation have been introduced to the U.S. Congress that were intended to reduce or eliminate ethanol blending requirements. To date, none of the bills have been successful but they are an indication of the continued effort to undermine the EISA.

The EPA has set conventional renewable renewable fuel volumes of 15.0 billion gallons for 2023 through 20252025. Additionally, for 2023, the EPA restored 250 million gallons previously waived. TheOn March 27, 2026, the EPA was required to propose RVOs for 2026 by November 2024, but the administration, at that time, indicated on July 8, 2024 an intention to proposeissued RVOs for 2026 and beyond2027 inof March15.0 2025,billion andgallons finalizeof conventional them in December 2025. The new administration has not yet provided an updated timelineethanol for theseeach rules.year.

Obligated parties use RINs to show compliance with RFS-mandated volumes. RINs are attached to renewable fuels by producers and detached when the renewable fuel is blended with transportation transportation fuel or traded in the open market. The market price of detached RINs affects the price of ethanol in certain markets and influences the purchasing decisions by obligated parties. As a result of fluctuations in RINs pricing, certain obligated parties have petitioned the EPA and filed court actions to change the point of obligation or to seek relief from their obligation. The EPA grantedhas 88the totalauthority SREsto forwaive the 2016biofuel throughmandate, 2018in totalingwhole approximatelyor 4.3in billionpart, gallons.if there is inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition, recentunder years,RFS II, a small refiner that processes fewer than 75,000 barrels of oil per day can petition the EPA hadfor largelya waiver of their deniedrequirement smallto refinersubmit waivers.RINs. InThe JulyEPA, 2024,through consultation with the U.S.United CourtStates Department of AppealsEnergy forand the DistrictUSDA, can grant the refiner a full or partial waiver, or deny the waiver. The waiving of Columbiaa Circuitrefiner’s vacatedobligation manyeffectively lowers the amount of renewable fuels required to be blended, and by extension the EPA’s 2022 SRE denials. The EPA had denied 105 SREs in 2022. As a resultamount of thisRINs Courtthat ruling,need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple ongoing legal challenges to how the EPA has voluntarilyhandled movedSREs and RFS rulemaking. On August 22, to rescind the agency’s 2023 denial of 26 SREs. During the previous Trump administration,2025, the EPA grantedruled moreon SREsmuch than underof otherthe administrations.backlog Theseof SREs, issuing 63 full exemptions, 77 partial exemptions of 50%, 28 denials and additional7 SREsruled couldas ineligible. leadOn toNovember decreased7, RIN2025, valuesthe EPA issued two 100% waivers, twelve 50% waivers and ethanoltwo pricing.denials. As of March 2025, 19, 2026, there were 156 37 SRE petitions pending.pending from compliance years 2023-2025.

Our ethanol plants emit various airborne pollutants pollutants as by-products of the ethanol production process, including carbon dioxide (a greenhouse gas). In 2007, the U.S. Supreme Court classified carbon dioxide as an air pollutant under the Clean Air Act in a case seeking to require the EPA to regulate carbon dioxide in vehicle emissions. In February 2010, the EPA released its final regulations on the Renewable Fuel Standard program. We believe our plants are grandfathered up to certain operating capacity, but plant expansion requires us to meet a 20% threshold reduction in greenhouse gas (GHG) emissions from a 2005 baseline measurement to produce ethanol eligible for the RFS II mandate. To further expand our plant capacity, we may be required to obtain additional permits, install advanced technology equipment, or reduce drying of certain amounts of distillers grains. We may also be required to install carbon dioxide mitigation equipment or take other steps in order to comply with future laws or regulations. Compliance Compliance with future laws or regulations with respect to emissions of carbon dioxide, or if we choose to expand capacity at certain of our plants, compliance with then-current regulations of carbon dioxide, could be costly and may prevent us from operating our plants at full capacity or as profitably, which may have a negative impact on our financial performance. We also face the risk of ethanol production production above our grandfathered capacity not qualifying for RINs if the plants do not meet certain emission requirements.

The California Air Resources Board (“CARB”) adopted a LCFS requiring a 10% reduction in GHG emissions from transportation fuels. An Indirect Land Use Charge is included in this lifecycle GHG emission calculation. This standard could have an adverse impact on the market for corn-based ethanol in California if corn-based ethanol fails to achieve lifecycle GHG emission reductions and in other states if they adopt similar standards. This could have a negative impact on our financial performance.

We are exposed to potential business disruption disruption from factors outside our control, including natural disasters, severe weather conditions, accidents, pandemic diseases, wars and other international disputes,conflicts, tariffs, and unforeseen operational failures any of which could negatively affect our transportation operations and could adversely affect our cash flows and operating results.

Potential business disruption in available transportation transportation due to natural disasters, severe weather conditions, international wars and other conflicts, the outbreak of a pandemic disease, significant track damage resulting from a train derailment, strikes or other interruptions by our transportation providers could result in delays in procuring and supplying raw materials to our ethanol facilities, or transporting ethanol and distillers grains to our customers. Such business business disruptions may result in our inability to meet customer demand or contract delivery requirements, as well as the potential loss of customers.

Risks Related to our Former Refined Coal Operations

As part of the operations, we paid a license fee fee for patented technology. If we or our third-party operator isare subject to patent infringement claims, we may incur legal fees to defend our position and be subject to additional costs and fees.

We use significant judgments, estimates and interpretation and application of complex tax laws in preparing the tax returns we file, and the positions contained therein. We believe that our tax return positions are fully supportable. However, certain positions may be successfully challenged by federal, state and local jurisdictions. We are currently undergoingin the process of finalizing a federal income examination related to tax credits claimed for the years ended January 31, 2015 through 2022. This could result in material additional income tax payments we would have to make2022 and higher incomebelieve taxour expensefinancial instatements futurereflect periods.the agreed upon outcome of the examination.

Our ethanol operations are highly dependent on on commodity prices, especially prices for corn, ethanol, distillers grains, distillers corn oil and natural gas, and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations depending upon several factors that affect commodity prices in general, including crop conditions, the amount of corn stored on farms, weather, federal policy, foreign trade, tariffs, and international disruptions caused by wars or conflicts. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy decisionsdecisions, trade negotiations, and tradetariffs negotiations can impact ethanol and distillers grains prices), at times ethanol and distillers grains prices may not follow movements in corn prices and, in an environment of higher corn prices or or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants. As a result, at times, we may operate our plants at negative or minimally positive operating margins.

We reported net income attributable to REX common shareholders of approximately $83.0 million in fiscal 2025 compared to approximately $58.2 million in fiscal 20242024. comparedThe tocurrent approximatelyyear $60.9has benefitted millionfrom reductions in our effective tax rate resulting from the impact of 45Z tax credits earned associated with our ethanol production. Gross profit in fiscal 2023.year Our2025 ethanolwas business hadhigher decreased profits inthan fiscal 2024year compared to fiscal 20232024, primarily as a result of lowerhigher sellingcrush prices, offset partially by a decrease in corn and natural gas prices.spreads. The two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility within the year. Chicago Board of Trade corn prices per bushel ranged from a low of $3.62 $3.72 in August 20242025 to a high of $4.97$5.02 in JanuaryFebruary 2025. S&P Global Platts ethanol pricing per gallon ranged from a low of $1.38 $1.50 in FebruaryJanuary 20242026 to a high of $2.12$2.09 in JuneSeptember 2024.2025.

One Earth Sequestration, LLC, a wholly owned subsidiary of One Earth Energy, LLC, is in the developmental stage of a carbon sequestration sequestration project near the One Earth Energy ethanol plant. A test well has been drilled to a total depth of approximately 7,100 feet, in which almost 2,000 feet of Mt. Simon Sandstone was encountered, which is the geological formation that is the region’s primary carbon storage resource. Three-dimensional seismic testing has been performed, as well as geological modeling for predicting the movement of injected carbon and the plume area to determine maximum injection pressure, reservoir quality and storage capacity for the potential wells. In October 2022, we applied to the EPA for a Class VI injection well permit for three wells with the EPA, wells, and we continue to provide information to the EPA during the technical review of our application upon request.application. We currently expect the EPA to prepare a draft permit by theMay second quarter of 20252026 and make a final permit decision by late induring the third quarter of 2025, 2026, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We have now secured sufficient subsurface easements for the proposed first injection well to allow for sequestration of all the carbon emissions from the One Earth Energy ethanol plant for a minimum of 15 years. We also need tomust obtain acertain state and county special-use zoning permitpermits for the sequestration site. In 2022, we began construction of a facility to capture, dehydrate,site and compressconnector pipeline. carbon dioxide from the One Earth Energy ethanol plant to a state suitable for sequestration. While weWe have completed the construction of the capture and compression facility,facility testingto capture, dehydrate, and compress carbon dioxide from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin construction of the CO2 connector pipeline between the One Earth ethanol plant and the sequestration site or a sequestration well until further permits and approvals are received.

We are also intend to concurrently expandexpanding the One Earth ethanol plant. We received a construction permit from the EPA to increase production from 150 million gallons of ethanol per year to 175 million gallons of ethanol per year. Once we achieve that level of production, we intend to apply for another permit to 200 million gallons per year. We continue to work to identify ways to reduce our CI score at the One Earth plant with the intention of maximizing tax credits available under the IRA.

TheWe Companycurrently isbudget reviewingcapital expenditures certainfor aspects ofboth the expansion portion of the project and itssequestration impactprojects onat theOne previously reported expected project costs. DueEarth to this, along with permitting delays and the impact of inflation, we have increased the budget for both projects tobe approximately $220 million to $230 million, subject to further refinement as we move forward. We plan to pay for all costsexpenditures from available cash. As of January 31, 31, 2025,2026, we had spent $55.7$58.4 million since inception toward the carbon sequestration project and were contractually committed to spend an additional $0.9$0.6 million toward the carbon sequestration project.million. If the carbon sequestration project is successful, we believe we will qualify for tax credits credits under section 45Q of the Internal Revenue Code (“45Q”),45Q, based on tons of carbon sequestered, and section 45Z of the Internal Revenue Code (“45Z”),45Z, based on gallons of ethanol produced, as outlined provided in the IRA.IRA However,and OBBBA. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are only available for calendar years 2025 – 2027 and the regulations have not yet been finalized by the U.S. Department of the Treasury.available. As of January 31, 2025,2026, we had spent $59.9$107.6 million since inception and were contractually committed to spend an additional $8.7 $15.5 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring.scoring at One Earth.

In May 2023, NuGen Energy, LLC,NuGen, our majority majority owned ethanol plant in Marion, South Dakota, signed an 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 carbon dioxide CO2 output of its ethanol production facility for sequestration, as well as to reduce its net carbon emissions. In March 2025, South Dakota signedenacted a bill into law that bans the use of eminent domain in connection with CO2 pipelines. In addition, in March 2026, a North Dakota Court voided the permits issued to Summit Carbon Solutions for underground storage of carbon dioxide pipelines.as Thisthe actCourt has deemed the law the permits were issued under to be unconstitutional. Summit Carbon Solutions is analyzing the decision and is contemplating next steps. These actions could make the sequestration project for the NuGen Energy facility more difficult for Summit Carbon Solutions to materialize.complete.

We plan to seek and evaluate various investment opportunities including ethanol and/or energy related, carbon sequestration, agricultural orand 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.

Renewable Fuel Standard II (“RFS II”),II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States. In recent years, thereThere 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 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 lessfewer than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement requirement to submit renewable identification numbers (“RINs”).RINs. The EPA, through consultation with the United States Department of Energy and the Department of Agriculture,USDA, can grant the refiner a full or partial waiver, or deny the waiver. The EPAwaiving issued 88of refinerya exemptionsrefiner’s forobligation 2016-2018effectively compliance years, undercuttinglowers the statutoryamount of renewable fuelfuels volumesrequired to be blended, and by aextension totalthe amount of 4.3RINs billion gallons.that Theneed EPAto hasbe notretired, grantedwhich anycan smallimpact refinerytheir waivers for 2019-2022values and hasultimately continuedblending thatlevels of stancerenewable in the proposed volumes for 2023-2025.fuels. There remainare multiple ongoing legal challenges onto how the EPA has handled theSREs smalland refineryRFS waivers.rulemaking. InOn JulyAugust 2024,22, 2025, the U.S.EPA Courtruled ofon Appeals for the District of Columbia Circuit vacated manymuch of the EPA’s 2022 SRE denials. The EPA had denied 105 SREs in 2022. As a resultbacklog of thisSREs, Courtissuing ruling,63 full exemptions, 77 partial exemptions of 50%, 28 denials and 7 ruled as ineligible. On November 7, 2025, the EPA hasissued voluntarilytwo moved100% towaivers, rescindtwelve the50% agency’s 2023 denial of 26 SREs. During the previous Trump administration, the EPA granted more SREs than under other administrations. Thesewaivers and additional SREstwo could lead to decreased RIN values and ethanol pricing.denials. As of March 2025,19, 2026, there were 15637 SRE petitions pending pending.from compliance years 2023-2025.

The EPA has issued Renewable Fuel Standard volume obligationsRVOs for calendar years 2023-2025. The volumes from conventional biofuels (which includes corn-based ethanol) were 15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. The EPAOn wasMarch required27, to propose RVOs for 2026 by November 2024, but2026, the administration,EPA issued at that time, indicated on July 8, 2024 an intention to proposetotal RVOs for 2026 and beyond2027 inof March15.0 2025,billion andgallons finalizeof themconventional in December 2025. The new administration has not yet provided an updated timelineethanol for theseeach rules.year.

Ethanol sales decreasedincreased in fiscal year 2024 2025 compared to fiscal year 20232024 as the average price per gallon decreasedincreased 23%,2%, offsetalong partially by an increase inwith gallons sold remaining steady compared to the prior period. ofEthanol 1%.pricing Theis decreaseaffected inby ethanolmany sellingfactors, priceincluding resultedoverall primarilymarket fromsupply aand decreasedemand, inas well as corn pricesand asgasoline the market price for ethanol often correlates with the market price for corn.pricing.

Dried distillers grains sales decreased in fiscal year 20242025 compared to fiscal year 2023,2024, decreasing 27%13% year-over-year, as the average price per ton sold decreased 25%, 10%, as well as a decrease in tons sold of 3%. The decrease in the dried distillers grains selling price resultedis primarilyconsistent with fromrecent aquarters decreaseand inreflects an extended period of lower corn pricespricing as dried distillers grains prices often correlate with corn pricing. pricing. The decrease in tons sold was offsetimpacted by anincreased increaseproduction in tonslevels of modifiedother distillersethanol grains sold. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.by-products.

Distillers corn oil sales decreasedincreased 26% 34% in fiscal year 20242025 compared to fiscal year 20232024 as the average selling price per pound decreasedincreased approximately 27%.23% and the amount of pounds sold increased 10%. The corn oil yield per bushel ground improved at our consolidated ethanol decreaseplants in fiscal 2025 relative to the comparable period in fiscal 2024. The increase in the distillers corn oil selling price resulted primarily from fluctuations in demand in the renewable biodiesel market which often reflects the price of soybean oil. The price decrease was partially offset by a negligible increase in pounds sold.market.

Modified distillers grains sales decreasedincreased 10% 12% in fiscal year 20242025 compared to fiscal year 20232024 as the amount of tons sold increased 17%, offset partially by a 6% decrease in the average selling price per ton sold decreased 32%, offset partially by an increase in tons sold of 30%.sold. The decrease in the modified distillers grains selling price resulted primarily from aan decreaseextended period of inlower corn pricesprices, as distillersprices graintend pricingto oftenmove correlatesin withthe cornsame pricing.direction but are also impacted by changes in local market demand. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.

GainsLosses on derivative financial instruments were were$0.3 million in fiscal year 2025, compared to gains of $0.4 million in fiscal year 2024, compared to insignificant losses in fiscal year 2023.2024. Gains and losses are related to our risk management activities and were impacted by the price movements and types of contracts entered into into at our consolidated ethanol plants.

Cost of Sales – Cost of sales for fiscal year 20242025 decreasedincreased approximately $184.2$5.8 million, or 25%,1%, over fiscal year 2023.2024. Corn accounted for approximately 74% ($411.5 million) of our cost of sales during fiscal year 2025 compared to approximately 76% ($416.4 million) during fiscal year 2024. The cost of corn decreased due to lower corn prices, while the amount of bushels used remained stable year over year. Natural gas accounted for approximately 5% ($29.0 million) of our cost of sales during fiscal year 20242025 compared to approximately 80%4% ($584.2$22.6 million) during fiscal year 2023. The cost of corn decreased due to lower corn prices, primarily attributable to two successive strong harvest seasons. These decreases were offset by a slight increase in the amount of corn used between the two periods. Natural gas accounted for approximately 4% ($22.6 million) of our cost of sales during fiscal year 2024 compared to approximately 4% ($31.7 million) during fiscal year 2023. The natural gas cost decrease was primarily attributable to a decrease in the cost per unit.2024.

Gross Profit – As a result result of the foregoing, gross profit for fiscal year 20242025 decreasedincreased approximately $6.7$2.2 million, or 7%,2%, from fiscal year 2023. 2024. Gross profit in fiscal year 20242025 was approximately 14.2%14.4% of net sales and revenue, versus approximately 11.8%14.2% of net sales and revenue in fiscal year 2023. 2024.

Selling, General and Administrative (“SG&A”) Expenses – SG&A expenses for fiscal year 20242025 were approximately $27.1$32.6 million (4.2% 5.0% of net sales and revenue), aan decrease increase of approximately $2.2$5.5 million or 8%20% from approximately $29.4$27.1 million (3.5%4.2% of net sales and revenue) for fiscal year 2023.2024. The dollar decrease increase compared to the prior year is primarily related to restricteda $2.0 million increase in performance bonuses due to the increase in net income and recording unpaid stock awardsbonuses granted at fair value. Additionally, there was a $1.4 million increase related to certainthe executivelease officersof railcars. Approximately $1.1 million was accrued in fiscal 2025 for costs associated with 45Z tax credits, including the secondplanned quarterpurchase of 2023, which were expensed upon issuance.EACs.

We expect the operating experience of Big River River to be generally consistent with the trends in crush spread margins described in the “Overview” section as Big River’s River’s results are dependent on the same keyindustry driversdynamics as our other ethanol investments (ethanol, corn, dried distillers grains and natural gas pricing).

NetIncome Before Income Taxes – As a result of the foregoing, netincome before income taxes was approximately $71.5$88.6 million for fiscal year 20242025 versus approximately $75.9 $92.9 million for fiscal year 2023.2024.

Net Income Attributable to REX Common Shareholders – As a result of the foregoing, net income attributable to REX common shareholders was approximately $58.2 $95.1 million for fiscal year 20242025 comparedversus toapproximately $60.9$71.5 million for fiscal year 2023.2024.

OutlookAt –January 31, 2026, working capital was $372.5 million with a current ratio of 5.9x. Our cash and short-term investments balance of approximately $359.1$375.8 million at January 31, 2025 2026 included approximately $322.7$336.5 million held by One Earth and NuGen. We expect that One Earth and NuGen will use a majority of their cash for working capital needs, capital expenditures, general corporate purposes and dividend payments. We expect our equity method investee to limit the payment of dividends based upon their working capital and capital expenditure needs.needs, as well as restricting dividends pursuant to the terms of various loan agreements. None of our consolidated subsidiaries or the parent company have restricted net assets related to loan agreements at January 31, 2026.

We are investigating various uses of our excess cash cash.We expect total capital expenditures related to the construction at the One Earth Energyfacilities is currently working on carbon sequestration and plant expansion projects and is expected to have related capital expenditure needs. Our current budget for both projects is approximatelyapproximate $220 million to $230 $230million, million,inclusive of the carbon sequestration project and plant capacity expansion and ongoing efforts to reduce CI scoring, which we currently plan to pay from our available cash. This estimate is subject to further refinement as wethe move forward. We plan to pay for allprojects costs from available cashprogress. As of January 31, 2025,2026, we havehad spent $55.7$58.4 million since inception and arewere contractually committed to spend an additional $0.9 $0.6 million toward the carbon sequestration project. As of January 31, 2025,2026, we havehad spent $59.9$107.6 million since inception and arewere contractually committed committed to spend an additional $8.7$15.5 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan plan to spend $50$70 million to $70$80 million during fiscal year 2025.2026.

We have a stock buyback program in place. During fiscal year 2024, we purchased 372,567 shares for $15.5 million. Subsequent to January 31, 2025 the Company repurchased 281,709 shares for approximately $11.9 million through open market transactions. After these repurchases, a total of 222,510 shares remained available to purchase under existing board authorization. On March March 25, 2025, the Board of Directors authorized the repurchase from time to time of up up to an additional 1,500,0003,000,000 shares through open market transactions, privately negotiated transactions, or transactions by other means in accordance with applicable securities laws. WeDuring typicallyfiscal repurchaseyear our2025, we purchased 1,651,252 shares for $32.9 million. After these commonrepurchases, stocka total of 2,357,186 shares remained available to purchase under existing board authorization at January 31, 2026. Repurchases are generally made when ourmanagement stockdeems pricethe isshares are trading at prices we deem to be a discount to theintrinsic underlying value of our net assets.value.

Net cash usedprovided inby financingoperating activities was approximately $4.3$117.8 million duringfor fiscal year2025, 2023, which was usedcompared to pay$64.2 dividendsmillion to noncontrolling members offor the consolidated entities.prior year period.

At AprilJuly 30,31, 2026, we had investments in three ethanol limited liability companies, in two of which we have a majority ownership interest. The following table is a summary of ethanol ethanol entity ownership interests at AprilJuly 30,31, 2026:

One Earth Sequestration, LLC, a wholly owned subsidiary subsidiary of One Earth, is in the developmental stage of a carbon sequestration project near the One Earth ethanol plant. In October 2022, we applied to the EPA for a Class VI injection well permit for three wells,wells. and we continue to provide information to theThe EPA upon request during the technical review of our application. We currently expect the EPA to prepareissued a draft permit byon JulyAugust 202617, and2026. This make a final permit decision by November 2026, according toopens the EPA’spublic Classcomment VIperiod Permitthrough TrackerSeptember Dashboard23, on their website.2026. We also must obtain certain state and county permits for the sequestration site and connector pipeline. We have completed the construction of the capture and compression facility to capture, dehydrate, and compress carbon dioxide from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin construction of the CO2 connector pipeline between the One Earth compression facility and the sequestration well until further permits and approvals are received.

We currently budget capital expenditures for both the expansion and sequestration projects at One Earth to be approximately $220 million to $230 million, subject to further refinement as we move forward, including impacts from inflation. We plan to pay for all expenditures from available cash. As of AprilJuly 30,31, 2026, we had spent $58.7$59.1 million since inception toward the carbon sequestration project and were contractually obligated to spend an additional $0.2 $0.3 million. If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q, based on tons of carbon sequestered, and section 45Z, based on gallons of ethanol produced, as outlined in the IRA and OBBBA. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. As of AprilJuly 30,31, 2026, we had spent $117.7$132.1 million since inception and were contractually committed to spend an additional $9.2$3.9 million toward plant capacity expansion at One Earth. We plan to pay for all expenditures from available cash.

The IRAIRA, as amended by the OBBBA, created a new Clean Fuel Production Credit, available for calendar years 2025 – 20272029 which, based on proposed rulemaking by the U.S. Department of Treasury, established a tax credit that utilizes a sliding scale where credits can be earned incrementally between $0.02 and $0.20 ($0.10 and $1.00 if prevailing wage and apprenticeship requirements are met) per gallon of non-SAF fuels based on an ethanol plant’s GHG reduction below a 50 CI score threshold, with the first two$0.02 or ten cents$0.10 credit earned upon achieving a CI score below 47.5, to incentivize further increases in plant efficiencies within the industry. The OBBBA extended the time period during which 45Z credits can be claimed by two years, through December 31, 2029. The. U.S. Department of the Treasury issued proposed rules on February 3, 2026 on qualification for 45Z tax credits. Based on proposed regulations, we recognized approximately $31.7 million and $7.5$26.0 million in 45Z tax credits through our consolidated subsidiaries for fiscal year 2025 and the first quartersix months of fiscal year 2026, respectively. Public hearings were held on the proposed rules in 2026.2026 and have yet to be finalized. Changes or clarifications to the proposed regulations, administrative guidance, or interpretations could result in an adjustment to management’s estimate of 45Z tax credits recognized. On June 12, 2026, the U.S. Department of Energy released an updated version of its 45ZCF-GREET model, removing indirect land-use change (“ILUC”) from the calculation.

Critical Accounting Policies and Estimates

During the threesix months ended AprilJuly 30,31, 2026, we did not change any of our critical accounting policiesestimates as disclosed in our 2025 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 30, 2026.

All references in this report to a particular fiscal 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 2026” means the period February 1, 2026 to January 31, 2027. The Company includes the results of operations of One Earth and the equity investment income of Big River in its Consolidated Statements of Operations on a delayed basis of one month as One Earth hasand aBig River have fiscal year endends of December 31.

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 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 waiving of a refiner’s obligation effectively lowers the amount of renewable fuels required to be blended, and by extension the amount of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple ongoing legal challenges to how the EPA has handled SREs and RFS rulemaking. On August 22, 2025, the EPA ruled on much of the backlog of SREs, issuing 63 full exemptions, 77 partial exemptions of 50%, 28 denials and 7 ruled as ineligible. On November 7, 2025, the EPA issued two 100% waivers, twelve 50% waivers and two denials. On August 3, 2026, the EPA issued one 100% waiver, two 50% waivers and determined three petitions to be ineligible from compliance years 2023 and 2024. On August 31, 2026, the remainder of the open SRE petitions from compliance year 2025, 34 in total, were decided with 18 full exemptions, 11 partial exemptions of 50% and five either denied or ruled ineligible, representing 1.8 billion RINs exempted. The EPA has proposed that 100% of the difference between previously projected and actual exempted volumes from the August 31, 2026 release be reallocated into the 2026 and 2027 RVOs. As a result of this announcement, the EPA has extended the 2025 RVO compliance date by 30 days to October 1, 2026. As of MayAugust 21,31, 2026, there were were 408 SRE petitions pending from compliance years 2023-2025.2026-2027.

The EPA has issued RVOs for calendar years 2023-2025. TheRVO volumes from conventional biofuels (which includes corn-based ethanol) were 15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. On March 27, 2026, the EPA issued total RVOs for 2026 and 2027 of 15.0 billion gallons of conventional ethanol for each year.

The EPA issued emergency waivers allowing the sale sale of E-15 gasoline for the 2026 summer months. 2026 will representrepresents the fifth consecutive year for these emergency waivers. The EPA has not granted E-15 the same Reid vapor pressure waiver as E-10, so absent the emergency waivers, E-15 may not be sold in most states from June 1 to September 15. Efforts continue in the United States Congress to pass legislation allowing for the sale of E-15 gasoline year-round. On May 13, 2026, House Resolution 1346 was passed by the House of Representative which would allow for year-round E-15 sales, but there is no set timeline for consideration in the Senate.

The IRA, signed into law on August 16, 2022, created created a new Clean Fuel Production Credit, Section 45Z, originally available for years 2025 to 2027. Based on proposed rulemaking by the United States Department of Treasury, the Clean Fuel Production Credit will be established utilizing a sliding scale where tax credits may be earned incrementally between $0.02 and $0.20 ($0.10 and $1.00 if prevailing wage and apprenticeship requirements are met) per gallon of non-SAF fuels based on a plant’s GHG reduction below a 50 CI score threshold, with the first two$0.02 or ten cents $0.10 credit earned upon achieving a CI score below 47.5. The IRA also raises the carbon capture tax credit under Section 45Q from $50 per metric ton to $85 per metric ton. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available.

The OBBBA introduced major revisions to clean energy energy tax credits. Key provisions include extending the 45Z credit through December 31, 2029, removing the indirect land-use change penalty penalty for crop-based feedstocks beginning in 2026, limiting eligibility to feedstocks under the USMCA, imposing FEOC restrictions, and prohibiting negative emissions rates except from animal manure. It also modified the 45Q tax credit for facilities placed in service after the bill enactment but maintained the $85 per ton tax credit if the prevailing wage and apprenticeship requirements are met. 45Q credits are available for 12 years from the time CO2 injection begins. On June 12, 2026, the U.S. Department of Energy released an updated version of its 45ZCF-GREET model to incorporate changes included in the OBBBA.

We have secured land easements from all necessary landowners to allow the construction of the CO2 connector pipeline on their land from the ethanol plant to the first two injection wells for our carbon sequestration project near the One Earth ethanol facility. We also have landowner subsurface easements for the first injection well with capacity sufficient to allow for carbon sequestration for our One Earth plant for an estimated 15 years. The Illinois Safety and Aid for the Environment in Carbon Capture and Sequestration Act (SB 1289), enacted in 2024, imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines. Further, the legislation imposed a moratorium on the issuance of new certificates of authority for the construction of CO2 pipelines until the earlier of the date new federal CO2 pipeline safety standards are finalized by the federal PHMSA or, subject to certain other conditions, July 1, 2026. Following the expiration of the moratorium, we have begun preparing our application for submission to the Illinois Commerce Commission for our CO2 connector pipeline to the first injection well.

The United States exported an estimated 2.2 billion gallons of ethanol in 2025, up from approximately 1.9 billion and 1.4 billion gallons in 2024 and 2023, respectively. Ethanol exports for the first six months of calendar year 2026 totaled 1.2 billion gallons, an increase of approximately 14% over the similar period of 2025, according to figures from the USDA Foreign Agricultural Services. In 2025 and 2024, an estimated 11.6 million and 12.1 million metric tons, respectively, of distillers grains were exported from the United States, which represented approximately 36% 36% and 37% in 2025 and 2024, respectively, of U.S production. Distillers grains exports for the first six months of calendar year 2026 totaled 6.2 million metric tons, an increase of approximately 15% over the similar period of 2025. There has been much discussion around proposed and recently enacted tariffs by the United States and counter-tariffs and other trade restriction involving countries which have been large purchasers from our industry in the United States.

Based on the May 12,August 2026 report from the USDA, corn production is forecasted to be approximately 16.0 billion bushels in 2026. The average corn yield is forecasted to be 183180.7 bushels bushels per acre, with planted acres projected to be 95.396.7 million and harvested acres projected to be 87.488.6 million. The Januaryfinal 12,2025 USDA 2026 USDA report had estimated a record 2025 corn production of 17.0 billion bushels with an estimated 186.5 bushels per acre, on an estimated 91.3 91.3 million acres harvested.

Comparison of Three and Six Months Ended AprilJuly 30,31, 2026 and 2025

Net sales and revenue in the quarter ended AprilJuly 30,31, 2026 decreasedincreased approximately 1%6% compared to the prior fiscal year second quarter. Net sales and revenue in the six months ended July 31, 2026 increased approximately 3% compared to the first quarter.six months of fiscal year 2025.

Ethanol revenue, net of hedging, decreasedincreased 5%2% in in the firstsecond quarter of fiscal year 2026 compared to the firstsecond quarter of fiscal year 2025 as the selling price per gallon decreasedincreased 2%, 6%, while gallons sold increasedremained slightly.consistent. Ethanol revenue, net of hedging, decreased 2% in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 as the selling price per gallon decreased 2%, while gallons sold remained consistent. Ethanol pricing is affected by many factors, including overall market supply and demand, as well as corn and gasoline pricing.

Dried distillers grains revenue increased 8%14% in in the firstsecond quarter of fiscal year 2026 compared to the firstsecond quarter of fiscal year 2025 as there was a 7%16% increase in the average price per ton sold, offset slightly by a 2% decrease in tons sold. Dried distillers grains revenue increased 11% in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 as there was an 11% increase in the average price price per ton soldsold, and a 1% increase inwhile tons sold.sold remained consistent. The increase in the dried distillers grains selling price primarily reflects increased soymeal prices, which are often correlated with the price of distillers grains, as well as increased export demand. The increase in tons sold was impacted by variability in production levels of other ethanol by-products.

Distillers corn oil revenue increased approximately 31%41% in the firstsecond quarter of fiscal year 2026 compared to the firstsecond quarter of fiscal year 2025 as the selling price per pound increased increased 17%33% and the amount of pounds sold increased 12%.5%. Distillers corn oil revenue increased approximately 36% in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 as the selling price per pound increased 26% and the amount of pounds sold increased 8%. The corn oil yield per bushel ground improved at our consolidated ethanol plants in the the three and six month periodperiods ended AprilJuly 30,31, 2026, relative to the comparable periodperiods in fiscal 2025. The increase in the distillers corn oil selling price resulted primarily from fluctuations in demand in the renewable biodiesel market.

Modified distillers grains revenue decreased 35% 36% in the firstsecond quarter of fiscal year 2026 compared to the firstsecond quarter of fiscal year 2025 as the amount of tons sold decreased by 39%, 36%, offset partially with a 5%1% increase in the average selling price per ton sold. Modified distillers grains revenue decreased 36% in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 as the amount of tons sold decreased by 38%, offset partially with a 3% increase in the average selling price per ton sold. The increase in the modified distillers grains selling price primarily reflects increased soymeal prices, whichas arewell oftenas correlatedfluctuations within thelocal price of distillers grains.demand. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon local market conditions.

The Company has determined that it qualifies for clean fuel production tax credits allowable under the IRA and OBBBA. The benefit recognized is determined based on the Company’s CI score to date. The Company recorded $7.5$18.4 million and $26.0 million in 45Z production tax credit income during the three months ended Apriland 30,six 2026months ended July 31, 2026, respectively, and did not record any in the comparable prior fiscal year period periods as proposed regulations had not yet been issued. Of the credits recorded in the three months ended July 31, 2026, $5.4 million represented incremental production tax credit income related to the previous quarter as the Company determined it now anticipates monetizing credits earned in fiscal year 2026 and began recognizing the year-to-date credits at a higher rate based upon the revised 45ZCF-GREET model released removing indirect land-use change from the carbon intensity calculation.

Cost of sales decreased 6%7% in the quarter ended AprilJuly 30,31, 2026, compared to the prior fiscal year firstsecond quarter. Corn accounted for approximately 75%77% ($101.7$102.3 million) of our cost of of sales during the firstsecond quarter of fiscal year 2026 compared to approximately 74% ($106.3$106.5 million) during the firstsecond quarter of fiscal year 2025. Natural gas accounted for approximately 6%4% ($8.7$5.4 million) of our cost of sales during the second quarter of fiscal year 2026 and 4% ($5.7 million) in the second quarter of fiscal year 2025. Cost of sales decreased 7% in the six months ended July 31, 2026, compared to the first quartersix months of fiscal year 2025. Corn accounted for approximately 76% ($204.0 million) of our cost of sales during the first six months of fiscal year 2026 compared to approximately 74% ($212.9 million) during the first six months of fiscal year 2025. Natural gas accounted for approximately 5% ($14.1 million) of our cost of sales during the first six months of fiscal year 2026 and 6% 5% ($8.1$13.8 million) in the first quartersix months of fiscal year 2025.

As a result of the foregoing, gross profit for the the firstsecond quarter of fiscal year 2026 increased approximately $14.7$39.0 million compared to the prior fiscal year second quarter. Gross profit for the first quarter.six months of fiscal year 2026 increased approximately $53.7 compared to the first six months of fiscal year 2025.

SG&A expenses for the firstsecond quarter of fiscal year 2026 were approximately $9.7$15.6 million (6.2%9.3% of net sales and revenue), an increase of approximately $3.8$9.4 million or 64%152% from approximately $6.2 million (3.9% of net sales and revenue) for the second quarter of fiscal year 2025. SG&A expenses for the first six months of fiscal year 2026 were approximately $25.4 million (7.8% of net sales and revenue), an increase of approximately $13.2 million or 109% from approximately $5.9 $12.1 million (3.8% of net sales and revenue) for the first quartersix months of fiscal year 2025. The dollar increase compared to the prior year is primarilypartially related to a $3.2$4.7 million increase and $7.5 million increase in performance bonuses duein the three and six months periods ended July 31, 2026, primarily attributable to the increase in net incomeincome. Additionally, andthere recordingwas unpaidan increase of $3.0 million related to restricted stock bonusesawards granted to certain executive officers in atthe fairsecond value.quarter of 2026, which were expensed upon issuance.

During the firstsecond quarter of fiscal year 2026, we we recognized income from our equity investment in Big River of approximately $3.6$7.2 million compared to income of approximately $1.0 $0.9 million for the firstsecond quarter of fiscal year 2025. In the firstsecond quarter of fiscal year 2026, approximately $1.8 million of our recognized income from Big River was from Section 45Z tax credits. During the first six months of fiscal year 2026, we recognized income from our equity investment in Big River of approximately $10.8 million compared to income of approximately $1.9 million for the first six months of fiscal year 2025. In the first six months of fiscal year 2026, approximately $3.6 million of our recognized income was from Section 45Z tax credits. Big River did not recognize any benefit from Section 45Z tax credits in the firstthree quarterand six ofmonth fiscal yearperiods ended July 31, 2025 as proposed regulations had not yet been issued. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 38.740.8 million gallons of ethanol shipped in the trailing twelve months ended April 30,July 31, 2026. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Interest and other income was approximately $3.2 $3.2 million for the firstsecond quarter of fiscal year 2026 versus approximately $4.2$3.1 million for the firstsecond quarter of fiscal year 2025. Interest and other income was approximately $6.5 million for the first six months of fiscal year 2026 versus approximately $7.3 million for the first six months of fiscal year 2025. One of our consolidated ethanol plants recognized $0.6 million less in patronage income from an investment in a cooperative in the first quartersix ofmonths fiscal year 2026 ($0.1 million) compared to the first quartersix months of fiscal year 2025 ($0.7 million). We do not expect patronage income from this investment in a cooperative to be significant in future periods. Additionally, there was a slight decrease in interest income of $0.3 million based upon lower balances and yields on our excess cash and short-term investments in fiscal year 2026, compared to fiscal year 2025.

As a result of the foregoing, income before income taxes was approximately $48.1 million and $12.1 million for the second quarter of fiscal years 2026 and 2025, respectively. Income before income taxes was approximately $26.1$74.2 million and $13.6$25.7 million for the first quartersix months of fiscal yearyears 2026 and 2025, respectively.

The Company applies an effective tax rate to interim periods that is consistent with the Company’s estimated annual tax rate as adjusted for discrete items impacting the interim periods. Our income tax provision was approximately $4.4$7.5 million and $3.0$2.8 million for the three months ended AprilJuly 31, 2026 and 30,2025, respectively. Our income tax provision was approximately $11.9 million and $5.7 million for the first six months of fiscal years 2026 and 2025, respectively.

As a result of the foregoing, net income was approximately $21.7$40.6 million for the firstsecond quarter of fiscal year 2026 compared to approximately $10.7$9.3 million for the firstsecond quarter of fiscal year 2025. Net income was approximately $62.3 million for the first six months of fiscal year 2026 compared to approximately $20.0 million for the first six months of fiscal year 2025.

Net income attributable to noncontrolling interests was approximately $3.2$5.7 million for the firstsecond quarter of fiscal year 2026 and $2.0$2.2 million for the second quarter of fiscal year 2025. Net income attributable to noncontrolling interests was approximately $8.9 million for the first quartersix months of fiscal year 2026 and $4.2 million for the first six months of fiscal year 2025. These amounts represent the other owners’ share of the income of NuGen and One Earth.

As a result of the foregoing, net income attributable to REX common shareholders for the firstsecond quarter of fiscal year 2026 was approximately $18.5$34.9 million, compared to net income attributable to REX common shareholders of approximately $8.7$7.1 million for the firstsecond quarter of fiscal year 2025. Net income attributable to REX common shareholders from the first six months of fiscal year 2026 was approximately $53.4 million, compared to net income attributable to REX common shareholders of approximately $15.8 million for the first six months of fiscal year 2025.

Net cash usedprovided inby operating activities was $2.1 $38.0 million for the first quartersix months of fiscal year 2026, compared to $3.5$12.8 million usedprovided by operating activities in the prior year period.

Operating cash flows for the threesix month period period ended AprilJuly 30,31, 2026 reflected net income of $21.7$62.3 million and non-cash adjustments of $(1.4)$11.7 million, and consisted of depreciation, noncash operating lease expense, amortization of finance right-of-use asset, income from equity method investments, interest income from short-term investments, the deferred income tax provision, stock-based compensation expense, and loss on disposal of property and equipment. Big River paid dividends to REX of approximately $2.0 million during the first six months of fiscal year 2026. These inflows were offset by various changes to working capital of $22.4$38.1 million during the first threesix months of fiscal year 2026, most significantly including:

In fiscal year 2025, operating cash flow reflected reflected net income of $10.7$20.0 million and non-cash adjustments of $4.4$11.4 million. Big River paid dividends to REX of approximately $2.5 million during the first six months of fiscal year 2025. These inflows were offset by various changes to working capital of approximately $18.5$21.1 million, most significantly caused by:

Net cash (used in) provided by investing activities was was $(68.9)$131.5 million in the first quartersix months of fiscal year 2026 versus $1.8$67.5 million provided in the first quartersix months of fiscal year 2025. In fiscal 2026, capital expenditures totaled $11.6$35.0 million, primarily at One Earth, which includes the plant expansion and CI reduction projectsproject ($9.1$27.5 million) and carbon sequestration ($0.4$0.8 million). Treasury activity used net cash, as $91.6$320.8 million of purchases exceeded $34.0$224.0 million of maturities of short term investments.

In the first quartersix months of fiscal year 2025, capital capital expenditures were $6.9$28.9 million, primarily for various capital projects at our consolidated ethanol plants, including $5.1 $9.7 million for the expansion project at the One Earth facility and $0.7$2.1 million for the carbon sequestration project. Treasury activity provided net cash, as $41.4$90.7 million of purchases were more than offset by $50.0$187.0 million of maturities for short-term investments.

Net cash used in financing activities was $3.9 $62,000 million in the first quartersix ofmonths fiscal year 2026, related entirelydue to finance$2.2 leasemillion payments.paid to noncontrolling interests holders and $1.6 million in repurchases of common shares. In the first six months of fiscal year 2025, financing outflows were $34.7 $35.6 million, including $32.7 $33.4 million for stock repurchases, and $2.0$2.3 million for payments to noncontrolling interests holders.

At AprilJuly 30,31, 2026, working capital was $376.2$391.5 million with a current ratio of 6.8x.6.9x. The Company continues to investigate various uses for our excess cash and short-term investments, including stock repurchases and potential investments in ethanol, energy, carbon sequestration, and agriculture-related ventures.

We expect total capital expenditures related to the construction at the One Earth facilities to approximate $220 million to $230 million, inclusive of the carbon sequestration project and plant capacity expansion project, which we currently plan to pay from our available cash. This estimate is subject to further refinement as the projects progress, including impacts from inflation. As of AprilJuly 30,31, 2026, we had spent $58.7$59.1 million million since inception and were contractually committed to spend an additional $0.2$0.3 million toward the carbon sequestration project. As As of AprilJuly 30,31, 2026, we had spent $117.7$132.1 million since inception and were contractually committed to spend an additional $9.2$3.9 million million toward the plant capacity expansion project. For all projects, we plancurrently toanticipate spendspending $70$20 million to $80$30 million during the remainder of fiscal year 2026. We plan to pay for all expenditures from available cash.

At AprilJuly 30,31, 2026, 2,357,1862,320,385 shares remained authorized for repurchase under the Company’s buyback program. Repurchases are generally made when management deems the shares to trade at a discount to intrinsic value.