Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Act. Yeso ☐     Noþ ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yeso ☐     Noþ ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ ☑     Noo ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesþ ☑     Noo ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filero ☐     Accelerated filerþ ☑     Non-accelerated filero ☐     Smaller reporting companyo

☐     Emerging growth companyo ☐

(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☑     No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yeso ☐     Noþ ☑

At the close of business on July 31, 20182021 the aggregate market value of the registrant’s outstanding Common Stock held by non-affiliates of the registrant (for purposes of this calculation, 696,789716,823 shares beneficially owned by directors and executive officers of the registrant were treated as being held by affiliates of the registrant), was $435,431,150.$432,166,213.

There were 6,274,4195,920,351 shares of the registrant’s Common Stock outstanding as of March 28, 2019.April 5, 2022.

Documents Incorporated by Reference

Portions of REX American Resources Corporation’s definitive Proxy Statement for its Annual Meeting of Shareholders on June 12, 201916, 2022 are incorporated by reference into Part III of this Form 10-K.

Forward-Looking Statements

This Form 10-K contains or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as “may,” “expect,” “believe,” “estimate,” “anticipate” or “continue” or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission and include among other things: the effect of pandemics such as COVID-19 on the Company’s business operations, including impacts on supplies, demand, personnel and other factors, the impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, non-food grade corn oil, gasoline and natural gas, ourcommodity market risk, ethanol and refined coal plants operating efficiently and according to forecasts and projections, logistical interruptions, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy, changes in foreign currency exchange rates and the effects of terrorism or acts of war. The Company does not intend to update publicly any forward-looking statements except as required by law. Other factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Item 1A.

Available Information

REX makes available free of charge on its Internet website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. REX’s Internet website address is www.rexamerican.com. The contents of the Company’s website are not a part of this report.

PART I

References to “we”, “us”, “our”, “REX” or “the Company” refer to REX American Resources Corporation and its majority owned subsidiaries.

Fiscal Year

All references in this report to a particular fiscal year are to REX’s fiscal year ended January 31. For example, “fiscal year 2018”2021” means the period February 1, 20182021 to January 31, 2019.2022. We refer to our fiscal year by reference to the year immediately preceding the January 31 fiscal year end date.

OverviewCorporate History and Background

REX was incorporated in Delaware in 1984 as a holding company. Our principal offices are located at 7720 Paragon Road, Dayton, Ohio 45459. Our telephone number is (937) 276-3931. We have been an investor

In 2006, we started investing in ethanol production facilities beginning in 2006.facilities. We are currently invested in three ethanol production entities; we haveentities – One Earth Energy, LLC (“One Earth”), NuGen Energy, LLC (“NuGen”), and Big River Resources, LLC (“Big River”). We own a majority ownership interest in two of these entities.One Earth and NuGen. We also own a majority interest in an entity that ownsowned and, operatesuntil November 18, 2021, operated a refined coal facility. We may make additional investments inAs we have ceased operating the energy or other industries in the future. In the third quarter of fiscal year 2017, we began reporting the results of our refined coal operation as a new segment as a result of the August 10, 2017 acquisition of an entity that operates a refined coal facility, (see Note 4 towe began classifying the Consolidated Financial Statements). Prior tofinancial results of the acquisition, we hadoperating segment as discontinued operations. We now have one reportable segment, ethanol. Beginning with the third quarter of fiscal year 2017, we have two reportable segments: i) ethanol and by-products and ii) refined coal.by-products.

General Overview

We reported net income attributable to REX common shareholders of $52.4 million in fiscal 2021 compared to approximately $3.0 million in fiscal 2020. Our ethanol business bounced back strongly in fiscal 2021 particularly in the fourth quarter in comparison to fiscal 2020, which was impacted by the COVID-19 pandemic. 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 $5.10 in September 2021 to a high of $7.40 in April 2021. S&P Global Platts ethanol pricing per gallon ranged from a low of $1.64 in February 2021 to a high of $3.80 in November 2021.

The form and structure of our ethanol investments are tailored to the specific needs and goals of each project and the local farmer group or investor with whom we partner. We generally participate in the management of our projects through our membership on the board of managers of the limited liability companies that own the plants. We provide management oversight and direction with respect to most aspects of plant operations for our consolidated ethanol companies. We have equity investments in three entities engaged in the production of ethanol as of January 31, 2022. The following table is a summary of our ethanol entity ownership interests at January 31, 2022:

The three entities own a total of six ethanol production facilities, which in aggregate shipped approximately 699 millions gallons of ethanol over the twelve-month period ended January 31, 2022. REX’s effective ownership of gallons shipped, for the twelve-month period ended January 31, 2022, by the ethanol production facilities in which we have ownership interests was approximately 282 million gallons.

Our ethanol operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, non-food grade corn oil and natural gas. 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 a number ofseveral factors that affect commodity prices in general, including crop conditions, weather, federal policy and foreign trade. Because the market prices of ethanol and distillers grains are not always directly related to corn prices, at times ethanol and/or distillers grains prices may lag movements in corn prices. In an environment of higher corn prices or lower ethanol/distillers grains prices, the overall margin structure at the plants could be reduced. As a result, at times, we may operate our plants at negative or minimally positive operating margins.

We expect our ethanol plants to produce approximatelyat least 2.8 gallons of denatured ethanol for each bushel of grain processed in the production cycle. We refer to the actual gallons of denatured ethanol produced per bushel of grain processed as the realized yield. We refer to the difference between the price per gallon of ethanol and the price per bushel of grain (divided by the realized yield) as the “crush spread.” Should the crush spread decline, it is possible that our ethanol plants will generate operating results that do not provide adequate cash flows for sustained periods of time. In such cases, production at the ethanol plants may be reduced or stopped altogether in order to minimize variable costs at individual plants.

We attempt to manage the risk related to the volatility of commodity prices by utilizing forward grain purchase, forward ethanol, distillers grains and non-food grade corn oil sale contracts, and commodity futures and swap agreements, as management deems appropriate. We attempt to match quantities of these sales contracts with an appropriate quantity of grain purchase contracts over a given period of time when we can obtain an adequate gross margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price.prices. Consequently, we generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in theour realized crush spread for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations of our ethanol facilities. We utilize derivative financial instruments, primarily exchange traded commodity future and swap contracts, in conjunction with certain of our grain procurement activities and commodity marketing activities.

Commodity prices in fiscal year 2018 were subject to significant volatility. For fiscal year 2018, the average Chicago Board of Trade (“CBOT”) near-month corn price ranged from a low of approximately $3.40 per bushel in July 2018 to a high of approximately $4.08 per bushel in May 2018. Corn prices were impacted throughout the year from consecutive strong corn harvests in 2017 and 2018. Ethanol prices had significant fluctuations ranging from a low of approximately $1.20 per gallon in November 2018 to a high of approximately $1.53 per gallon in March 2018. Ethanol prices were influenced by many factors throughout the year including domestic demand, record exports and increases in U.S. ethanol production. Ethanol prices in 2018 were negatively impacted, in part, by increased small refiner waivers granted by the Environmental Protection Agency (“EPA”) and the resulting reductions to the Renewable Fuel Standard (“RFS”) obligations and ethanol demand.

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, for approximately $12.0 million, the entire ownership interest of an entity that ownsowned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. We expect thatAs the refined coal operating results will be subsidized byplant was no longer eligible to receive federal production tax credits throughbeginning on November 18, 2021, subject to meeting qualified emissions reductionswe ceased operations on that date. We began classifying this operation as governed by Section 45 of the Internal Revenue Code (“IRC”). In order to maintain compliance with Section 45 of the Internal Revenue Code, we are required to test every six months, through an independent laboratory, the effectiveness of our process with respect to emissions reductions. Annually, the IRS publishes the amount

of federal income tax credit earned per ton of refined coal produced and sold for a given calendar year, which for 2018 is $7.03 per ton.

Net income attributable to REX common shareholders was approximately $31.6 million in fiscal year 2018 compared to approximately $39.7 million in fiscal year 2017. The current year benefitted from reductions in our effective tax rate resulting from the impact of federal production tax credits associated with our refined coal operations and from the impact of research and experimentation credits associated with our ethanol and by-products operations. Fiscal year 2017 benefitted from the impact of tax reform legislation as we remeasured our net deferred tax liabilities at a significantly lower tax rate. Gross profit in fiscal year 2018 was significantly lower compared to fiscal year 2017, primarily a result of lower ethanol crush spreads and the impact of our refined coal facility which generated a gross loss for a full year ofdiscontinued operations in the third quarter of fiscal year 2018 compared to a partial year of operations in fiscal year 2017. Due to the inherent volatility of commodity prices within the ethanol industry, the uncertainty regarding future refined coal production and associated financial results, we cannot predict the likelihood of future operating results being similar to the fiscal year 2018 results.2021.

During fiscal year 2013, we entered into a joint venture with Hytken HPGP LLC (“Hytken”) to file and defend patents for eSteam technology relating to heavy oil and oil sands production methods, and to attempt to commercially exploit the technology to generate license fees, royalty income and development opportunities.technology. The patented technology is an enhanced method of heavy oil recovery involving zero emissions downhole steam generation. To date, we have paid approximately $2.0 million to purchase our ownership interest and fund patent and other expenses. We have not successfully had a field operation nor demonstrated that the technology is commercially feasible. We own 60% and Hytkenour partner owns 40% of the entity named Future Energy, LLC, (“Future Energy”), an Ohio limited liability company. Future Energy is managed by a board of three managers, two appointed by usWe have no current plans to operate this technology and one by Hytken.are maintaining patents in limited countries.

We plan to seek and evaluate various investment opportunities including 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.

Ethanol and by-products Overview

We began investing in the ethanol industry during fiscal year 2006. The form and structure of our investments is tailored to the specific needs and goals of each project and the local farmer group or investor with whom we are partnering. We generally participate in the management of our projects through our membership on the board of managers of the limited liability companies that own the plants.

We have equity investments in three entities engaged in the production of ethanol as of January 31, 2019. The following table is a summary of our ethanol investments at January 31, 2019 (gallons in millions):

Ethanol Industry

Ethanol is a renewable fuel source produced by processing corn and other biomass through a fermentation process that creates combustible alcohol that can be used as a fuel additive to reduce vehicle emissions from gasoline, as an additive or replacementoctane enhancer to fossil fuel based gasoline.improve the octane rating of gasoline with which it is blended and, to a lesser extent, as a gasoline substitute. The majority of ethanol produced in the United States is made from corn because of its wide availability and ease of convertibility from large amounts of carbohydrates into glucose, the key ingredient in producing alcoholthe fermentation process that is used in the fermentation process.producing alcohol. Ethanol production can also use feedstocks such as grain sorghum, switchgrass, wheat, barley, potatoes and sugarcane as carbohydrate sources. Most ethanol plants have been located near large corn production areas, such as Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota. Railway access and interstate access are vital for ethanol facilities due to the large amount of raw materials and finished goods required to be shipped to and from the ethanol plant facilities. An adequate supply of natural gas is key to maintaining optimal operating levels.

According to the Renewable Fuels Association (“RFA”), the United States ethanol industry produced an estimated 16.115.0 billion gallons of ethanol in 2018. Approximately 14.52021. Although this is an increase of 1.2 billion gallons were blended domestically and approximately 1.7over the COVID-19 impacted 2020 volume, it is still below the estimated 15.8 billion gallons produced in 2019. Approximately 1.2 billion gallons were exported from the United States in 2018.2021. According to the RFA, as of January 2019, the United States ethanol industry consists of 210208 plants (199 operating) in 2725 states with an annual capacity of approximately 16.517.7 billion gallons (approximately 16.0 billion gallons at operating plants) of ethanol production. The RFA estimates that, as of January 2019, approximately 350 million gallons per year of additional production capacity

Domestic demand for ethanol is under construction or expansion.

highly dependent upon federal and state legislation and regulations. On December 19, 2007, the Energy Independence and Security Act of 2007 (the “Energy Act of 2007”) was enacted. The Energy Act of 2007 established new levels of renewable fuel mandates, including two different categories of renewable fuels: conventional biofuels and advanced biofuels. The federal government mandates the use of renewable fuels under Renewable Fuel Standard II (“RFS II”), established in October 2010. Corn-based ethanol is considered a conventional biofuel which is subject to a renewable fuel standard (“RFS”)biofuel. There were mandated volumes established as part of 15.0 billion gallons annuallythe RFS II for conventional and advanced biofuels through the year 2022. After 2022, RFS volumes willare to be determined by the Environmental Protection Agency (“EPA”) in coordination with the Secretaries of Energy and Agriculture. The mandated volumes for conventional biofuel were to reach 15.0 billion gallons in 2015 and maintain that level until 2022.

The federal government mandates the use of renewable fuels under RFS II, established in October 2010. The EPA has the authority to waive the mandates in whole or in part if one of two conditions isare met: 1) there is inadequate domestic renewable fuel supply, or 2) implementation of the mandate requirement severely harms the economy or environment of a state, region, or the United States. In 2014, 2015 and 2016, the EPA took action to reduce the volumes for both conventional biofuels and advanced biofuels.

The U.S. Federal District Court for the D.C. Circuit ruled on July 28, 2017 in favor of the Americans for Clean Energy and its petitioners against the EPA related to its decision to lower the 2016 volume requirements. The Court concluded the EPA erred in how it interpreted the “inadequate domestic supply” waiver provision of RFS II, which authorizes the EPA to consider supply-side factors affecting the volume of renewable fuel available to refiners, blenders, and importers to meet the statutory volume requirements. The waiver provision does not allow the EPA to consider the volume of renewable fuel available to consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers. As a result, the Court vacated the EPA’s decision to reduce the total renewable fuel volume requirements by 500 million gallons for 2016 through its waiver authority, which the EPA is expected to address.authority.

Pursuant to RFS II, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. While conventional ethanol was maintained at 15.0 billion gallons, 2019 is the second consecutive year the total proposed renewable volume obligations (“RVOs”) are more than 20% below statutory volumes levels. Thus, the EPA Administrator directed his staff to initiate the reset rulemaking process and the EPA will modify statutory volumes through 2022 based upon the same factors used to set the post 2022 RVOs. These factors include environmental impact, domestic energy security, expected production, infrastructure, consumer costs, job creation, agriculture commodities, food prices and rural economic development.

Obligated parties use renewable identification numbers (“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 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. Certain obligated parties petitioned the EPA to move the point of obligation from refiners and importers of fuel to fuel blenders. In November 2017, the EPA denied this petition to change the point of obligation under RFS II to the parties that own the gasoline before it is sold. In March 2019, the EPA sent reform measures to the White House to control speculation in RIN values by barring trading from non-industry participants, publicizing large RIN positions, limiting the length of time a non-obligated party can hold RINs and increasing the compliance frequency to quarterly rather than annually.

On January 26, 2018, in separate court actions, both Valero Energy and American Fuel and Petrochemical and Manufacturers challenged the EPA regarding the EPA’s management of the U.S. biofuel mandate. Amongst their challenges are the EPA’s November 2017 decision to reject proposed changes to the structure of the RFS including the point of obligation, and the plaintiffs are seeking a review of the annual Renewable Volume Obligations rule set by the EPA for 2018 and 2019.

Under the RFS II, a small refiner that processes less than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement to acquire and submit RINs.renewable identification numbers (“RINs”). The EPA, through consultation with the Department of Energy and the Department of Agriculture, can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 85 refinery exemptions for 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.0 billion gallons. In 2020, the U.S. Court of Appeals for the 10^th Circuit vacated decisions by the EPA to extend exemptions of renewable fuel obligations to three small refineries. The Court ruled the extensions should not have been granted significantly morebecause the three refineries were not already in possession of these waiversexemptions. In addition, the Court ruled the economic hardship should be determined by whether compliance with RFS II alone created the hardship, not compliance with RFS II amongst other factors. Two of the refiners appealed the decision to the U.S. Supreme Court. On June 25, 2021, the Supreme Court ruled in favor of small refiners and reversed the interpretation of “extension” of a waiver but not the economic hardship portion of the decision.

On December 7, 2021, the EPA issued proposed volumes for 20162021 and 2017 than they had2022 and reduced the previously finalized volumes for previous years, totaling approximately 2.62020 to account for challenges for that year including the COVID-19 pandemic. The proposed volumes for conventional biofuels were 13.32 billion gallons of waived requirementand 15.0 billion gallons for 2021 and 2022, respectively. The 2020 volumes were proposed at 12.5 billion gallons, down from the two years combined. This effectively reducedpreviously finalized 15.0 billion gallons. In addition, the RFS II mandated volumesEPA proposed denying 65 pending applications for those compliance years by those waived amounts, and has lowered RIN values significantly over the past calendar year.

Biofuels groups have filed a lawsuit in the U.S. Federal District Court for the D.C. circuit, challenging the 2019 RVO rule over the EPA’s failure to address small refinery exemptions (“SREs”) in response to the rulemaking. This is2020 decision by the first RFS rulemaking sinceU.S. Court of Appeals for the expanded use10^th Circuit. The EPA also proposed adding 250 million gallons of “supplemental obligation” to the 2022 proposed volumes and stated its intent to add another 250 million gallons to 2023 to address the remand of the exemptions came to light. To date, the EPA has refused to cap the number of waivers it grants or how it accounts for the retroactive waivers in its percentage standard calculations. Even if all the obligated parties comply with their respective percentage obligations for 2019, the country’s overall supply of renewable fuel will not meet the total volume requirements set2016 waiver by the EPA. Biofuels groups argue theD.C Circuit. The EPA must therefore adjust its percentage standard calculations to make up for past retroactive waiversimplemented a public notice and adjust the standards to account for any waivers it reasonably expects to grant in the future.comment process on this announcement.

Ethanol Production

The plants we have invested in are designed to use the dry milling method of producing ethanol. In the dry milling process, the entire corn kernel is first ground into flour, which is referred to as “meal,” and processed without separating out the various component parts of the grain. The meal is processed with enzymes, chemicals and water, and then placed in a high-temperature cooker. It is then transferred to fermenters where yeast is added and the conversion of sugar to ethanol begins. After fermentation, the resulting liquid is transferred to distillation columns where the ethanol is separated from the remaining “stillage” for fuel uses. The anhydrous ethanol is then blended with a denaturant, such as natural gasoline, to render it undrinkable and thus not subject to beverage alcohol tax. With the starch elements of the corn consumed in the above described process, the principal co-productby-product produced by the dry milling process is dry distillers grains with solubles, or DDGS. DDGS is sold as a protein used in animal feed, which recovers a portion of the corn costvalue not absorbed in ethanol production. Depending on market and operating conditions, we may also sell modified distillers grains, or wet distillers grains, by removing less liquid content compared to DDGS. We also generate revenues from the sale of non-food grade corn oil produced at our facilities. Non-food grade corn oil is sold to the animal feed market, as well as biodiesel and other chemical markets.

The Primary Uses of Ethanol

Blend component.Today, much of the ethanol blending in the U.S. is done to meet the RFS. Most regular gasoline is produced using blendstock with an octane rating of 84, which is then increased to 87 (the minimum octane rating required in most states) by adding 10% ethanol according to the RFA. The industry is attempting to expand the E-85 market, as well as to raise the federal cap on ethanol blendblending above the current 10% for most vehicles in use. The EPA has approved the use of 15% ethanol (“E-15”), which has an octane rating of 88, in gasoline for cars, SUV’s and light duty trucks made in 2001 and later. However,Previously, the EPA didhad not grantgranted E-15 the same Reid vapor pressure (“RVP”) waiver as E-10 so it cancould only currently be sold from September 16 through May 31 for those vehicles in most markets. On March 12,In May 2019, the EPA issued a proposed rulefinalized regulatory changes to removeallow the same RVP waiver for E-15 for the summer ban. The proposed rule is subject to a public hearingmonths that it allows for E-10. However, in July 2021, the U.S. Court of Appeals for the D.C. Circuit overturned the EPA ruling and comments.stated the EPA had exceeded its authority.

Clean air additive.Ethanol is employed by the refining industry as a fuel oxygenate, which when blended with gasoline, allows engines to combust fuel more completely than gasoline that has not been oxygenated and thus reduce emissions from motor vehicles. Ethanol contains 35% oxygen, which results in more complete combustion of the fuel in the engine cylinder. Oxygenated gasoline is used to help meet certain federal and air emission standards.

Octane enhancer.Ethanol increases the octane rating of gasoline with which it is blended. As such, ethanolOctane is a measure of fuel performance. Ethanol is used by gasoline suppliers as an octane enhancer both for producing regular grade gasoline from lower octane blending stocks and for upgrading regular gasoline to premium grades.

Legislation

The United States ethanol industry is highly dependent upon federal and state legislation. See Item 1A. Risk Factors for a discussion of legislation affecting the U.S. ethanol industry.

Refined Coal OverviewFacility

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, the entire ownership interest of an entity that ownsowned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. Using licensed technology, our plant appliesapplied two separate chemicals to convert feedstock coal into refined coal, which iswas sold to the end user of the refined coal. We expect that theThe refined coal operating results will bewere subsidized by federal production tax credits through November 18, 2021, subject to meeting qualified emissions reductions as governed by Section 45 of the Internal Revenue Code (“IRC”). In orderIRC. We ceased operating the facility on November 18, 2021 and subsequently sold the facility. We began to maintain compliance with Section 45report these results as discontinued operations in the third quarter of the IRC, we are required to test every six months, through an independent laboratory, the effectiveness of our process with respect to emissions reductions. Annually, the IRS publishes the amount of federal income tax credit earned per ton of refined coal produced and sold for a given calendar year, which for 2018 is $7.03 per ton.2021.

Section 45 of the IRC was created by Congress to encourage the development and use of environmentally sound solutions to control harmful emissions during energy production and to facilitate and move the United States towards better compliance with global environmental energy standards. The American Jobs Creation Act of 2004 amended Section 45 of the IRC by adding provisions to incentivize the production of emission reducing refined coal. To qualify for tax credits under Section 45 of the IRC, a process must reduce coal emissions of nitrogen oxide by 20% and either sulfur dioxide or mercury by 40%. The tax credits can be earned for refined coal produced and sold by

Facilities

As of our facility through November 2021.

Facilities

At January 31, 2019,fiscal year end, our consolidated ethanol entities ownowned a combined 4771,122 acres of land and two facilities that shipped a combined quantity of approximately 286278 million gallons of ethanol in fiscal year 2018.2021. We also own our corporate headquarters office building, consisting of approximately 7,500 square feet, located in Dayton, Ohio.

Human Capital Resources

The attraction, retention and development of employees is critical to our success. We ownaccomplish these objectives through a refined coal plant that is located on leased property on the sitevariety of an electrical generating station.

Employees

actions, including our competitive compensation policies, training initiatives and growth opportunities within our Company. At January 31, 2019,2022, we had 127124 employees at our two consolidated ethanol plants and at our corporate headquarters. None of our employees are represented by a labor union. We expect this employment level to remain relatively stable. We consider our relationship with our employees to be good.good.

We took measures to protect the health and safety of our employees during the COVID-19 pandemic while continuing to meet the needs of our customers. We continue to monitor the impact of the COVID-19 pandemic on our business, including our employees, and take appropriate actions to mitigate the impact, including emphasizing CDC guidelines.

We conduct regularly scheduled safety meetings and require all employees to go through safety training. We evaluate employee safety incidents monthly and investigate such incidents promptly. In addition, we conduct periodic safety audits performed by an independent third party. A portion of our incentive compensation plan rewards employees for attaining certain safety goals.

We believe we offer market competitive compensation and benefit programs for our employees. In addition to competitive base wages, all employees are eligible for an incentive compensation program, a Company matched 401(k) plan, healthcare benefits, and paid time off.

Service Marks

We have registered the service marks “REX”, and “Farmer’s Energy”, with the United States Patent and Trademark Office. We are not aware of any adverse claims concerning our service marks.

We encourage you to carefully consider the risks described below and other information contained in this report when considering an investment decision in REX common stock. Any of the events discussed in the risk factors below may occur. If one or more of these events do occur, our results of operations, financial condition or cash flows could be materially adversely affected. In this instance, the trading price of REX stock could decline, and investors might lose all or part of their investment.

Risks Related to our Ethanol and by-ProductsBy-Products Business

The ethanol industry is changing rapidly which could result in unexpected developments that could negatively impact our operations.

According to the RFA, the ethanol industry has growngrew from approximately 1.5 billion gallons of domestic annual ethanol production in 1999 to a peak of approximately 16.1 billion gallons in 2018. In 2021 and 2020, the industry produced approximately 15.0 and 13.8 billion gallons, respectively, with the reduction from the peak year reflecting industry conditions. Thus, there have been significant changes in the supply and demand of ethanol over a relatively short period of time which could lead to difficulty in maintaining profitable operations at our ethanol plants.

The financial returns on our ethanol investments are highly dependent on commodity prices, which are subject to significant volatility, uncertainty and regional supply shortages, so our results could fluctuate substantially.

The financial returns on our ethanol investments are highly dependent on commodity prices, especially prices for corn, natural gas, ethanol, dried distillers grains, non-food grade corn oil and unleaded gasoline. As a result of the volatility of the prices for these items, our returns may fluctuate substantially and our investments could experience periods of declining prices for their products and increasing costs for their raw materials, which could result in operating losses at our ethanol plants.

Our returns on ethanol investments are highly sensitive to grain prices.

Corn is the principal raw material our ethanol plants use to produce ethanol and co-products.by-products. As a result, changes in the price of corn can significantly affect our businesses. Rising corn prices result in higher production costs of ethanol and co-products.by-products. Because ethanol competes with non-corn-based fuels, our ethanol plants may not be able to pass along increased grain costs to our customers. At certain levels, grain prices may make ethanol uneconomical to produce.

The price of corn is influenced by weather conditions and other factors affecting crop yields, transportation costs, farmer planting decisions, exports, foreign production, the value of the U.S. dollar, and general economic, market and regulatory factors. These factors include government policies and subsidies with respect to agriculture and international trade 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 increase corn prices and potentially harm the business of our ethanol plants. plants, to include intermittent production slowdowns or stoppages.

Increasing domestic ethanol capacityproduction could boost the demand for corn and result in increased corn prices. Much of the Midwestern United States experienced drought conditions during 2012 which led to a smaller harvest ofInternational demand for corn and increasedcould also result in higher 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. 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.

The spread between ethanol and corn prices can vary significantly.

The gross margin at our ethanol plants depends principally on the spread between ethanol and corn prices. Fluctuations in the spread are likely to continue to occur. A sustained narrow or negative spread, whether as a result of sustained high or increased corn prices or sustained low or decreased ethanol prices, would adversely affect the results of operations at our ethanol plants.

Our risk management strategies may be ineffective and may expose us to decreased profitability and liquidity.

In an attempt to partially offset the impact of volatility of commodity prices, we enter intointo: i) forward contracts to sell a portion of our ethanol and distillers grains production and to purchase a portion of our corn and natural gas requirements.requirements and; ii) commodity futures and swap agreements. The financial impact of these risk management activities is dependent upon,

among other items, the prices involved and our ability to receive or deliver the commodities involved. Risk management activities can result in financial loss when positions are purchased in a declining market or when positions are sold in an increasing market. In addition, we may not be able to match the appropriate quantity of corn contracts with quantities of ethanol, distillers grains and non-food grade corn oil contracts. Further, our results may be impacted by a mismatch of gains or losses associated with the positions during a reporting period when the physical commodity purchase or sale has not yet occurred. We vary the amount and type of risk management techniques we utilize, and we may choose not to engage in any risk management activities. Should we fail to properly manage the inherent volatility of commoditiescommodity prices, our results of operations and financial condition may be adversely affected.

The market for natural gas is subject to market conditions that create uncertainty in the price and availability of the natural gas that our ethanol plants use in their manufacturing process.

Our ethanol plants rely upon third parties for their supply of natural gas, which is consumed as fuel in the production process. The prices for and availability of natural gas are subject to volatile market conditions. These market conditions often are affected by factors beyond the ethanol plants’ control, such as weather conditions, overall economic conditions, governmental regulation and foreign and domestic governmental regulation and relations. 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 or changes in our natural gas costs relative to natural gas costs paid by competitors may adversely affect results of operations and financial position at our ethanol plants.

Fluctuations in the selling price of commodities may reduce profit margins at our ethanol plants.

Ethanol is marketed as a fuel additive to reduce vehicle emissions from gasoline, as an octane enhancer to improve the octane rating of gasoline with which it is blended and, to a lesser extent, as a gasoline substitute. As a result, ethanol prices are influenced by the supply and demand for gasoline, and our ethanol plants’ results of operations and financial position may be materially adversely affected if gasoline demand decreases or prices decrease.the price of gasoline declines making ethanol less economical.

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 theirthese products are made. Historically, sales prices for distillers grains have tracked along with the price of corn. However, there have been instances when the price increase for distillers grains has lagged price increases in corn prices.

The production of distillers grains has increased as a result of increases in dry mill ethanol production in the United States. This could lead to price declines in what we can sell our distillers grains for in the future. Such declines could have ana material adverse material effect on our results of operations.

Increased ethanol production or decreases in demand for ethanol may result in excess production capacity in the ethanol industry, which may cause the price of ethanol, distillers grains and non-food grade corn oil to decrease.

According to the RFA, domestic ethanol production capacity is approximately 16.517.7 billion gallons per year as of January 2019. The RFA estimates that, as of January 2019, approximately 350 million gallons per year of additional production capacity is under construction or expansion. Certain operating plants have qualified as efficient ethanol producers throughyear. On December 7, 2021, the EPA pathway assessment,issued proposed RFS volumes for 2021 and are expanding, or planning2022 and reducing the previously finalized volumes for 2020 to expand their capacity.account for challenges for that year including the COVID-19 pandemic. The EPA set the RFS requirement to be satisfied by corn-derived ethanol atproposed volumes for conventional biofuels were 13.32 billion gallons and 15.0 billion gallons for 20182021 and 2019. However, the RFS requirements have been reduced through small refiner waivers issued by the EPA. These waivers2022, respectively. The 2020 volumes were in the amount of approximately 2.6proposed at 12.5 billion gallons, of ethanol for 2016 and 2017 combined. There have been no rulings on waiver requests for subsequent years.down from the previously finalized 15.0 billion gallons. Excess capacity in the ethanol industry 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 (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.

Excess capacity may also result from decreases in the demand for ethanol, which could result from a number of factors, including, but not limited to, regulatory developments and reduced U.S. gasoline consumption. 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 mileage or acquire non-gasoline powered vehicles. In addition, decreased overall economic activity could also lead to reduced gasoline consumption.

In addition, because ethanol production produces distillers grains and non-food grade corn oil as co-products,by-products, increased ethanol production will also lead to increased supplies of distillers grains and non-food grade corn oil. An increase in the supply of distillers grains and non-food grade corn oil, without corresponding increases in demand, could lead to lower prices or an inability to sell our ethanol plants’ distillers grains and non-food grade corn oil production. A decline in the price of distillers grains or non-food grade corn oil could have a material adverse effect on the results of our ethanol operations.

The price of ethanol and distillers grains may decline as a result of trade restrictions or duties on ethanol and distillers grains exports from the United States or from unfavorable foreign currency exchange rates.

If the United States were to withdraw from or materially modify certain international trade agreements, our business, financial condition and results of operations could be materially adversely affected. Ethanol and other products that we produce are sold into various other countries with trade agreements with the United States. If tariffs were raised on the foreign-sourced goods that lead to retaliatory actions, it could have material adverse effect on our business, financial condition and results of operations.

The United States exported approximately 1.71.2 billion gallons of ethanol in 2018.2021, down from approximately 1.3 and approximately 1.5 billion gallons in 2020 and 2019, respectively. If producers and exporters of ethanol are subject to trade restrictions, or additional duties are imposed on exports, it may make it uneconomical to export ethanol. Brazil, China and the European Union all have trade barriers or tariffs against U.S. fuel ethanol. In 2013, the European Union imposed a five year tariff of $83.33 per metric ton on U.S. fuel ethanol to discourage foreign competition. Effective January 1, 2017, China indicated its intention to raise its 5% tariff on U.S. and Brazil fuel ethanol to 30%. On April 1, 2018, China raised their tariff rate to 45%, and later raised it to 70% in the U.S. and China trade war. On September 1, 2017, Brazil imposed a 20% tariff on U.S. fuel ethanol imports in excess of 150 million liters, or 39.6 million gallons per quarter. The tariff is valid for two years. Furthermore, unfavorable changeswas extended several times but lapsed in foreign currency exchange rates could reduce the demand for United StatesDecember 2020 and a 20% tariff now applies to all U.S. ethanol exports.exported to Brazil. This could result in an oversupply of ethanol in the United States, which could have a material adverse effect on the results of our ethanol operations.

ExportsIn 2021, approximately 11.6 million metric tons of distillers grains produced in the United States have been increasing in recent years. In 2018, approximately 12.1 million metric tons (“mmt”) were exported, which represented approximately 36% of the approximately 41.3 mmt produced in the U.S. production. However, the export market may be jeopardized if foreign governments impose trade barriers or other measures to protect the foreign local markets. The Chinese export market became less than 2%Exports to China were approximately 4% of U.S. global shipments in 20182021 versus approximately 51% in 2015, due to punitive tariffs established beginning January 2017 in effect for 5 years per the RFA.2017. If producers and exporters of distillers grains are subjected to trade barriers when selling distillers grains to foreign customers, there may be a reduction in the price of distillers grains in the United States. In addition, foreign currency exchange rate fluctuations could reduce the demand for United States exports of distillers grains. Declines in the price we receive for our distillers grains could lead to decreased revenues and may result in our inability to operate our ethanol plants profitably.

Future demand for ethanol is uncertain and changes in overall consumer demand for transportation fuel could affect demand.

There are limited markets for ethanol other thatthan what is federally mandated. Increased consumer acceptance of E15 and E85 fuel is likely necessary in order for ethanol to achieve significant market share growth beyond federal mandate levels.

During the early months of 2020, a new strain of COVID-19 spread into the United States and other countries.

In an effort to contain the spread of this virus, there were various government mandated restrictions, in addition to voluntary privately implemented restrictions, including limiting public gatherings, retail store closures, restrictions on employees working and the quarantining of people who may have been exposed to the virus. The above actions led to reduced demand for ethanol. Although most restrictions have been lifted, if in the future the virus continues to mutate, it could lead to prolonged production stoppages at our ethanol plants and could result in an adverse material impact on the results of operations and on our financial position. We idled our NuGen and One Earth ethanol plants for portions of fiscal year 2020, largely due to the impact of the pandemic.

We depend on our partners to operate certain of our ethanol investments.

Our investments currently represent both majority and minority equity positions. Day-to-day operating control of minority owned plants generally remains with the local investor group. We do not have the ability to directly modify the operations of these plants in response to changes in the business environment or in response to any deficiencies in local operations of the plants. In addition, local plant operators, who also represent the primary suppliers of corn and other crops to the plants, may have interests, such as the price and sourcing of corn and other crops, that may differ from our interest, which is based solely on the operating profit of the plant. The limitations on our ability to control day-to-day plant operations could adversely affect plant results of operations.

We may not successfully acquire or develop additional ethanol investments.

The growth of our ethanol business depends on our ability to identify and develop new ethanol investments. Our ethanol development strategy depends on referrals, and introductions, to new investment opportunities from industry participants, such as ethanol plant builders and owners, financial institutions, marketing agents and others. We must continue to maintain favorable relationships with these industry participants, and a material disruption in these sources of referrals would adversely affect our ability to expand our ethanol investments.

Any expansion strategy will depend on prevailing market conditions for the price of ethanol and the cost of corn and natural gas and the expectations of future market conditions. There is increasing competition for suitable sites for ethanol plants. Even if suitable sites or opportunities are identified, we may not be able to secure the services and products from contractors, engineering firms, construction firms and equipment suppliers necessary to build or expand ethanol plants on a timely basis or on acceptable economic terms. Construction costs may increase to levels that would make a new plant too expensive to complete or unprofitable to operate. Additional financing may also be necessary to implement any expansion strategy, which may not be accessible or available on acceptable terms. New and more stringent environmental regulations could increase the operating costs and risks of new plants, which, in turn could discourage us from further expansion. In addition, failure to adequately manage the risks associated with additional ethanol investments could have a material adverse effect on our business.

Our ethanol plants may be adversely affected by technological advances and efforts to anticipate and employ such technological advances may prove unsuccessful.

The development and implementation of new technologies may result in a significant reduction in the costs of ethanol production. For instance, any technological advances in the efficiency or cost to produce ethanol from inexpensive cellulosic sources such as corn stalk, wheat, oat or barley straw could have an adverse effect on our ethanol plants, because our plants are designed to produce ethanol from corn, which is, by comparison, a raw material with other high value uses. We cannot predict when, or if, new technologies may become available, the rate of acceptance of new technologies by competitors or the costs associated with new technologies. In addition, advances in the development of alternatives to ethanol could significantly reduce demand for or eliminate the need for ethanol.

Any advances in technology which require significant unanticipated capital expenditures to remain competitive or which reduce demand or prices for ethanol would have a material adverse effect on the results of our ethanol operations.

In addition, alternative fuels, additives and oxygenates are continually under development. Alternative fuel additives that can replace ethanol may be developed, which may decrease the demand for ethanol. It is also possible that technological advances in engine and exhaust system design and performance could reduce the use of oxygenates, which would lower the demand for ethanol,ethanol. Consumer demand for gasoline may be reduced by transportation related technological advances such as electric and hybrid vehicles. Several automobile manufacturers have announced target dates into the 2030s for ceasing production of gasoline vehicles and shifting production to electric vehicles. In addition, countries such as Japan and the United Kingdom as well as the state of California have pledged to ban the sale of vehicles with internal combustion engines over time. The Biden administration, in its early stages, appears to have placed an increased emphasis on electric vehicles. Recent federal legislation seeks to address the ever-increasing demand for electric vehicle (EV) infrastructure. On November 15, 2021, the Infrastructure Investment and Jobs Act (IIJA) was signed into law. The IIJA specifically allocates $7.5 billion specifically for EV infrastructure programs and grants on a national level. Reduced demand for ethanol could cause our results of our ethanol operations mayto be materially adversely affected.

The U.S. ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation and any changes in legislation or regulation could materially and adversely affect our results of operations and financial position.

The renewable fuel standard program was authorized under the Energy Policy Act of 2005 and was expanded under the Energy Independence and Security Act of 2007 (EISA) established RFS II, which modified the renewable fuel standard from prior legislation.. 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. For example, on January 3, 2017, the Leave Ethanol Volumes at Existing Levels (“LEVEL”) Act (H.R. 119) was introduced in the U.S. House of Representatives. The bill would freeze renewable fuel blending requirements under the RFS at 7.5 billion gallons per year, prohibit the sale of gasoline containing more than 10% ethanol, and revoke the EPA’s approval of E15 blends. In addition, on January 31, 2017, a bill (H.R. 777) was introduced in the U.S. House of Representatives that would require the EPA and National Academies of Sciences to conduct a study on the implication of the use of mid-level ethanol blends. A mid-level ethanol blend is an ethanol gasoline blend containing 10-20% ethanol by volume, including E15 and E20, that is intended to be used in any conventional gasoline powered motor vehicle or non-road vehicle or engine. On March 2, 2017, a bill (H.R. 1315) was introduced in the U.S. House of Representatives that would limit the volume of ethanol in gasoline to 10%. On the same day, the RFS Elimination Act (H.R. 1314) was introduced in the U.S. House of Representatives. The bill would fully repeal the RFS.

Under EISA, the EPA has the authority to waive or modify the mandated RFS II requirements in whole or in part. In order to grant a waiver, the EPA administrator must determine in consultation with the Secretaries of Agriculture and Energy, that one of the following two conditions has been met: i) there is inadequate domestic renewable fuel supply or ii) implementation of the requirement would severely harm the economy or environment of a state, region or the country. In certain past years the EPA has taken action to reduce the mandated gallons called for under EISA for both conventional and advanced renewable fuels.

Pursuant to RFS II, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. While conventional ethanol was maintained at 15 billion gallons, 2019 is the second consecutive year the total proposed RVOs are more than 20% below statutory volumes levels. Thus, the EPA Administrator directed his staff to initiate the reset rulemaking process and the EPA will modify statutory volumes through 2022 based upon the same factors used to set the post 2022 RVOs. These factors include environmental impact, domestic energy security, expected production, infrastructure, consumer costs, job creation, agriculture commodities, food prices and rural economic development.

Obligated parties use renewable identification numbers (“RINs”)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 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 has granted small refiner waivers85 total SREs for 2016 and 2017through 2018 totaling approximately 2.64.0 billion gallons. This action has already led to reduced values for RINs, and further action could decrease RIN values and ethanol pricing.

In January 2020, the U.S Court of Appeals for the 10^th Circuit overturned the EPA’s granting of refinery exemptions to three refineries on two separate grounds. The Court ruled refineries are eligible for SREs only if such waivers are extensions of waivers granted in previous years. The refineries did not qualify for waivers in the year prior to the year the EPA granted them. The Court also stated the disproportionate economic hardship of SREs should be based solely on whether compliance with RFS II creates such hardship, not whether compliance and other issues create the hardship. Two of the refiners appealed the decision to the U.S. Supreme Court, and on January 25, 2021, the Supreme Court partially ruled in favor of the small refiners, but only as to the interpretation of “extension” of a waiver.

On December 7, 2021, the EPA issued proposed volumes for 2021 and 2022 and reduced the previously finalized volumes for 2020 to account for challenges for that year including the COVID-19 pandemic. The proposed volumes for conventional biofuels were 13.32 billion gallons and 15.0 billion gallons for 2021 and 2022, respectively. The 2020 volumes were proposed at 12.5 billion gallons, down from the previously finalized 15.0 billion gallons. In addition, the EPA proposed denying 65 pending applications for SREs in response to the 2020 decision by the U.S. Court of Appeals for the 10^th Circuit. The EPA also proposed adding 250 million gallons of “supplemental obligation” to the 2022 proposed volumes and stated its intent to add another 250 million gallons to 2023 to address the remand of the 2016 waiver by the D.C Circuit. The EPA implemented a public notice and comment process on this announcement.

In March 2019, the EPA sent reform measures to the White House to control speculation in RIN values by barring trading from non-industry participants, publicizing large RIN positions, limiting the length of time a non-obligated party can hold RINs and increasing the compliance frequency to quarterly rather than annually. This could provide for further uncertainty in RIN values.

If the United States were to withdraw from or materially modify the North American Free Trade Agreement (“NAFTA”) or certain other international trade agreements, our business, financial condition and results of operations could be materially adversely affected. Ethanol and other products that we produce are sold into Canada, Mexico and other countries with trade agreements with the United States. If tariffs were raised on the foreign-sourced goods that lead to retaliatory actions, it could have material adverse effect on our business, financial condition and results of operations.

The inability to generate or obtain RINs could adversely affect our operating results.Virtually all of our ethanol is sold with RINs that are used by customers to comply with RFS II. If our production does not meet EPA requirements for RIN generation in the future, we would have to purchase RINs in the open market or sell our ethanol at substantially lower prices to adjust for the absence of RINs. The price of RINs varies based on many factors and cannot be predicted. Failure to obtain sufficient RINS or reliance on invalid RINs could subject us to fines and penalties imposed by the EPA.

Changes in corporate average fuel economy standards could adversely impact ethanol prices.Flexible fuel vehicles receive preferential treatment in meeting federally mandated corporate average fuel economy (“CAFE”) standards for automobiles manufactured by car makers. High blend ethanol fuels such as E-85 result in lower fuel efficiencies. Absent the CAFE preferences, car makers would not likely build flexible-fuel vehicles. Any change in CAFE preferences could reduce the growth of E-85 markets and result in lower ethanol prices.

Unfavorable changes in legislation or regulations could materially and adversely affect our results of operations and financial position.

The inability to generate or obtain RINs could adversely affect our operating results.

Virtually all of our ethanol is sold with RINs that are used by customers to comply with RFS II. If our production does not meet EPA requirements for RIN generation, as an efficient producer, in the future, we would have to purchase RINs in the open market or sell our ethanol at substantially lower prices to adjust for the absence of RINs. The price of RINs varies based on many factors and cannot be predicted. Failure to obtain sufficient RINs or reliance on invalid RINs could subject us to fines and penalties imposed by the EPA.

Various studies have criticized the efficiency of ethanol, in general, and corn-based ethanol in particular, which could lead to the reduction or repeal of incentives and tariffs that promote the use and domestic production of ethanol or otherwise negatively impact public perception and acceptance of ethanol as an alternative fuel.

Although many trade groups, academics and governmental agencies have supported ethanol as a fuel additive that promotes a cleaner environment, others have criticized ethanol production as consuming considerably more energy and emitting more greenhouse gases than other biofuels and as potentially depleting water resources. Other studies have suggested that corn-based ethanol is less efficient than ethanol produced from switchgrass or wheat grain and that it negatively impacts consumers by causing prices to increase for dairy, meat and other foodstuffs from livestock that consume corn to increase.foodstuffs.

On February 22, 2019, the U.S. EPA published a notice in the Federal Register announcing a proposed consent decree that would require the agency to complete an anti-backsliding study on the RFS by March 30, 2020. A public comment period on the notice is open through March 25, 2019. According to information released by the EPA, the anti-backsliding study will consider whether the renewable fuel volumes required under the RFS by the Clean Air Act adversely impact air quality as a result of changes in vehicle and engine air pollutant emissions.

If these views gain acceptance, support for existing measures promoting use and domestic production of corn-based ethanol could decline, leading to reduction or repeal of these measures. These views could also negatively impact public perception of the ethanol industry and acceptance of ethanol as an alternative fuel.

Federal support of cellulosic ethanol may result in reduced incentives to corn-derived ethanol producers.

The American Recovery and Reinvestment Act of 2009 and EISA provide funding opportunities in support of cellulosic ethanol obtained from biomass sources such as switchgrass and poplar trees. The amended RFS mandates an increasing level of production of non-corn-derived biofuels. These federal policies may suggest

a long-term political preference for cellulosic processes using alternative feedstocks such as switchgrass, silage or wood chips. Cellulosic ethanol has a smaller carbon footprint than corn-derived ethanol and is unlikely to divert foodstuff from the market. Several cellulosic ethanol plants are under development and there is a risk that cellulosic ethanol could displace corn ethanol. Our plants are designed as single-feedstock facilities, located in corn production areas with limited alternative feedstock nearby, and would require significant additional investment to convert to the production of cellulosic ethanol. The adoption of cellulosic ethanol as the preferred form of ethanol could have a significant adverse effect on our ethanol business.

Our ethanol business is affected by environmental and other regulations which could impede or prohibit our ability to successfully operate our plants.

Our ethanol production facilities are subject to extensive air, water and other environmental regulations. We have had to obtain numerous permits to construct and operate our plants. Regulatory agencies could impose conditions or other restrictions in the permits that are detrimental, or which increase our costs. More stringent

federal or state environmental regulations could be adopted which could significantly increase our operating costs or require us to expend considerable resources.

Our ethanol plants emit various airborne 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 recent 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 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 as profitably, which may have a negative impact on our financial performance. We also face the risk of ethanol production above our grandfathered capacity not qualifying for RINSRINs if the plants do not meet certain emission requirements.

The California Air Resources Board (“CARB”) has adopted a Low Carbon Fuel Standard (“LCFS”) requiring a 10% reduction in GHG emissions from transportation fuels by 2020.fuels. An Indirect Land Use Charge is included in this lifecycle GHG emission calculation. After a series of rulings that temporarily prevented CARB from enforcing these regulations, the State of California Office of Administrative Law approved the LCFS on November 26, 2012 and revised LCFS regulations took effect in January 2013. 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.reductions and in other states if they adopt similar standards. This could have a negative impact on our financial performance.

Our ethanol business may become subject to various environmental and health and safety and property damage claims and liabilities.

Operation of our ethanol business exposes the business to the risk of environmental and health and safety claims and property damage claims, such as failure to comply with environmental regulations. These types of claims could also be made against our ethanol business based upon the acts or omissions of other persons. Serious claims could have a material negative impact on our results of operations, financial position and future cash flows.

Our business is not significantly diversified.

Our financial results depend heavily on our ability to operate our ethanol plants profitably. Our lack of significant diversification could have a material negative impact on our results of operations, financial position and future cash flows should our ethanol plants operate unprofitably.

We may have commitments to produce and sell ethanol.

We may, at times, sell our products with forward contracts. If we are unable to produce the products due to economic conditions, business interruption, or other factors, we may incur additional costs or have to obtain commodities at unfavorable prices to meet our contractual commitments. This could have a material adverse effect on our results of operations.

We may have commitments to purchase commodities.

We may, at times, purchase certain commodities with forward contracts without a corresponding quantity of ethanol sold via forward contracts at known prices. Should ethanol and by-product prices decline to levels that would lead to significant unprofitable results of operations, we may incur additional costs and/or losses to meet our contractual commitments. This could have a material adverse effect on our results of operations.

Our revenue from the sale of distillers grains depends upon its continued market acceptance as an animal feed.

Distillers grains is a co-productby-product from the fermentation of corn to produce ethanol. Antibiotics may be used during the fermentation process to control bacterial contamination; therefore, antibiotics may be present in small quantities in distillers grains marketed as animal feed. The U. S. Food and Drug Administration’s Center for Veterinary Medicine has expressed concern about potential animal and human health hazards from the use of distillers grains as an animal feed due to the possibility of antibiotic residues. If the public became concerned about the impact of distillers grains in the food supply or as an acceptable animal feed, the market for distillers grains could be negatively impacted, which would have a negative impact on our results of operations. We may not be able to obtain a suitable replacement for antibiotics, should this be required, which would also negatively impact the market for distillers grains.

An estimated 29%36% of distillers grains produced in the United States were exported in 2018.2021. The price of distillers grains has benefitted from the exports of the product. In recent years, certain countries have refused to import U.S. distillers grains for a variety of reasons. If export shipments are rejected or delayed, the market price for distillers grains would be negatively impacted, which would have a negative impact on our ethanol results of operations.

At certain of our plants, weWe extract and sell non-food grade corn oil immediately prior to the production of distillers grains. Several studies are attempting to determine whether non-food grade corn oil extraction may impact the nutritional value of the resulting distillers grains. If it is determined that non-food grade corn oil extraction adversely impacts the nutritional energy content of distillers grains, the value of the distillers grains we sell may be negatively impacted, which would have a negative impact on our results of operations.

We face significant competition in the ethanol industry.

We face significant competition for new ethanol investment opportunities. There are varied enterprises seeking to participate in the ethanol industry. Some enterprises provide financial and management support similar to our business model. Other enterprises seek to acquire or develop plants which they will directly own and operate. Many of our competitors are larger and have greater financial resources and name recognition than we do. We must compete for investment opportunities based on our strategy of supporting and enhancing local development of ethanol plant opportunities. We may not be successful in competing for investment opportunities based on our strategy.

The ethanol industry is primarily comprised of entities that engage exclusively in ethanol production and large integrated grain companies that produce ethanol along with their base grain business. Several large oil companies have entered the ethanol production market. If these companies increase their ethanol plant ownership or if other oil companies seek to engage in direct ethanol production, there would be less of a need

to purchase ethanol from independent producers such as our ethanol plants. No assurance can be given that our ethanol plants will be able to compete successfully or that competition from larger companies with greater financial resources will not have a materially adverse impact on the results of our ethanol operations.

We may face competition from foreign producers.

There is a risk of foreign competition in the ethanol industry. Brazil is presently the second largest producer of ethanol in the world. Brazil’s ethanol production is sugarcane based, and, depending on feedstock prices, may be cheaper to produce than corn-derived ethanol. Under the RFS, certain parties were obligated to meet an advanced biofuel standard. In recent years, sugarcane based ethanol imported from Brazil has been one of the most economical means for obligated parties to comply with this standard.

If significant additional foreign ethanol production capacity is created, such facilities could create excess supplies of ethanol, which may result in lower prices of ethanol. In addition, foreign ethanol producers may be able to produce ethanol at costs lower than ours. These risks could have significant adverse effects on our financial performance.

We are exposed to credit risk from our sales of ethanol and distillers grains to customers.

The inability of a customer to make payments to us for our accounts receivable may cause us to experience losses and may adversely impact our liquidity and our ability to make our payments when due.

We may not be able to hire and retain qualified personnel to operate our ethanol plants.

Our ability to attract and retain competent personnel has a significant impact on operating efficiencies and plant profitability. Competition for key plant employees in the ethanol industry can be intense, and wethere has been an increased demand for workers in the U.S. We may not be able to attract and retain qualified employees. Failure to do so could have a negative impact on our financial results at individual plants.

Our plants depend on an uninterrupted supply of energy and water to operate. Unforeseen plant shutdowns could harm our business.

Our plants require a significant and uninterrupted supply of natural gas, electricity and water to operate. We generally rely on third parties to provide these resources. If there is an interruption in the supply of energy or water for any reason, such as supply, delivery or mechanical problems and we are unable to secure an adequate alternative supply to sustain plant operations, we may be required to stop production. A production halt for an extended period of time could result in material losses.

Potential business disruption from factors outside our control, including natural disasters, severe weather conditions, accidents, strikes, unexpected equipment failures and unforeseen plant shutdowns, could adversely affect our cash flow and operating results.

The debt agreements for certain of the ethanol plants limit, or otherwise restrict the amount of dividends and other payments the ethanol subsidiaries can transfer to their members.

We are dependent on dividends from our ethanol subsidiaries to generate cash flow. Presently our unconsolidated ethanol subsidiary has debt agreements that limit payments to members. Therefore, this company cannot distribute all of the cash it generates to its members. Furthermore, we may not be able to use the excess cash flow from one subsidiary to fund corporate needs or needs of another operating ethanol subsidiary.

We rely on information technology in our operations and financial reporting and any material failure, inadequacy, interruption or security breach of that technology could harm our ability to efficiently operate our business and report our financial results accurately and timely.

We rely heavily on information technology systems across our operations, including for management of inventory, purchase orders, production, invoices, shipping, accounting and various other processes and transactions. Our ability to effectively manage our business, coordinate the production, distribution and sale of our products and ensure the timely and accurate recording and disclosure of financial information depends significantly on the reliability and capacity of these systems. The failure of these systems to operate effectively, problems with transitioning to upgraded or replacement systems, or a breach in security of these systems through a cyber-attack or otherwise could cause delays and/or interruptions in plant operations, product sales, reduced efficiency of our operations and delays in reporting our financial results. Significant capital investments could be required to remediate any such problem. Security breaches of employee information or other confidential or proprietary data could also adversely impact our reputation and could result in litigation against us or the imposition of penalties.

We are exposed to potential business disruption from factors outside our control, including natural disasters, severe weather conditions, accidents, pandemic diseases, international disputes, 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 due to natural disasters, severe weather conditions, 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 disruptions may result in our inability to meet customer demand or contract delivery requirements, as well as the potential loss of customers.

Rail cars used to transport ethanol may need to be modified or replaced to meet proposed rail safety regulations.

The leased rail cars we use to transport ethanol to market will need to be retrofitted or replaced as the Enhanced Tank Car Standards and Operation Controls for High-Hazard Flammable Trains adopted by the U.S. Department of Transportation (“DOT”) imposes an enhanced tank car standard known as the DOT specification 117 and establishes a schedule to retrofit or replace older tank cars that carry crude oil and ethanol. The rule also establishes braking standards intended to reduce the severity of accidents and new operational protocols. This could lead to increased rail car lease costs and delays in transportation of ethanol if rail cars are out of service for extended periods of time.

We operate in a capital intensive industry. Limitations on external financing could adversely affect our financial performance.

We may need to incur additional financing to fund growth of our business or in times of increasing liquidity requirements (such as increases in raw material costs). Bankruptcy filings by several ethanol companies in past years and capital market volatility has reduced available capital for the ethanol industry. Any delays in obtaining additional financing, or our inability to do so, could have a material adverse impact on our financial results.

Risks Related to our Refined Coal Operations

OurWe believe our refined coal investment is subject to various risks and uncertainties.

We purchased aproduction company that produces refined coal that we believe qualifiesqualified to earn tax credits under IRC Section 45 through November 18, 2021. Our ability to generate returns and avoid write-offs in connection with this investment is subject to various risks and uncertainties. These include, but are not limited to, the risks and uncertainties as set forth below.

Availability of the tax credits under IRC Section 45.

Our ability to claim tax credits under IRC Section 45 depends upon theour refined coal operation which we have purchased satisfying certain ongoing conditions set forth in IRC Section 45. Furthermore, the tax credits under IRC Section 45 could be reduced or completely eliminated as a result of changes in income tax laws and/or regulations.

The IRS could ultimately determine that theour refined coal facility we purchased and/or its operations havedid not satisfied, or have not continued to satisfy the conditions set forth in IRC Section 45. As our refined coal operation is expectedIf we were to generate pre-tax losses, the unavailability of thelose these tax credits, for any reasonit could have a material impact on our results of operations.

IRC Section 45 phase out provisions.

IRC Section 45 contains phase out provisions based upon the market price of coal such that, if the price of coal rises to specified levels, we could lose some or all of the tax credits we expect to receive from this operation.

TheOur refined coal operation depends on one customer.

The refined coal operation receives tax credits by sellingand its refined coal to an unrelated party. The unrelated party is not obligated to continue purchasing refined coal from us. Our user of refined coal could convert its fuel source to natural gas, oil or some other source instead of coal depending on the price of natural gas, oil or other sources relative to that of coal. If the unrelated party ceases to purchase refined coal from us, we would attempt to move our refined coal plant to a different location, which could require us to invest additional capital, or to find a different user to purchase our refined coal. In addition, we may not be able to find a suitable location to move our refined coal plant to or find a different user to purchase our refined coal in a timely manner. Market demand for coal may also decline as a result of an economic slowdown. Sustained low natural gas prices may also cause users of coal to phase out or close existing coal using operations. If users of coal burn less coal or eliminate the use of coal there would be less need for our product. A reduction or cessation of refined coal sales could have a material impact on our results of operations.

Environmental concerns regarding coal could lead to reduced or suspended refined coal operations.

Environmental concerns about greenhouse gases, toxic wastewater discharges and the potential hazardous nature of coal combustion waste could lead to regulations that discourage the burning of coal. Such regulations could mandate that electric power generating companies purchase a minimum amount of power from renewable energy sources such as wind, hydroelectric, solar and geothermal. This could result in utilities burning less coal, which could have a material impact on our results of operations.

The refined coal operation in which we have invested and the by-products from such operations may result in environmental and product liability claims and environmental compliance costs.

The construction and operation of refined coal operations are subject to Federal, state and local laws, regulations and potential liabilities arising under or relating to the protection or preservation of the

environment, natural resources and human health and safety. Such laws and regulations generally require the operations and/or the utilities at which the operations are located to obtain and comply with various environmental registrations, licenses, permits, inspections and other approvals. Such laws and regulations also impose liability, without regard to fault or the legality of a party’s conduct, on certain entities that are considered to have contributed to, or are otherwise involved in, the release or threatened release of hazardous substances into the environment. Such hazardous substances could be released as a result of burning refined coal in a number of ways, including air emissions, waste water,wastewater, and by-products such as fly ash. One party may, under certain circumstances, be required to bear more than its share or the entire share of investigation and cleanup costs at a site if payments or participation cannot be obtained from other responsible parties. We may be exposed to the risk of becoming liable for environmental damage we may have had little, if any, involvement in creating. Such risk remains even after production ceases at an operation to the extent the environmental damage can be traced to the types of chemicals or compounds used or operations conducted in connection with the use of refined coal.

No assurances can be given that contractual arrangements and precautions taken to ensure assumption of these risks by facility owners or operators will result in that facility owner or operator accepting full responsibility for any environmental damage. It is also not uncommon for private claims by third parties alleging contamination to also include claims for personal injury, property damage, diminution of property or similar claims. Furthermore, many environmental, health and safety laws authorize citizen suits, permitting third parties to make claims for violations of laws or permits and force compliance. Our insurance may not cover all environmental risk and costs or may not provide sufficient coverage in the event of an environmental claim. If significant uninsured losses arise from environmental damage or product liability claims, or if the costs of environmental compliance increase for any reason, our results of operations and financial condition could be adversely affected.

We rely on a third party to operate the refined coal facility.

We rely on an unrelated third party to operate the refined coal plant. Should the third party fail to perform or underperform in the operation, management or regulatory compliance of the facility, our results of operations and financial condition could be adversely affected as we are not experienced in operating a refined coal facility.

We will have to generate taxable income to utilize the Section 45 federal production tax credits.

If we do not generate sufficient taxable income to utilize the tax credits earned by our refined coal operation, we could incur write-offs of the related tax attributes which could adversely affect our results of operations and financial condition. In addition, this could adversely reduce

We used patented technology.

As part of the operations, we paid a license fee for patented technology. If our liquidity reserves asthird party operator is subject to patent infringement claims, we expectmay incur legal fees to incur operating losses sustained by the refined coal operation.defend our position and be subject to additional costs and fees.

Risks Related to our eSteam investment

eSteam may not be a commercially viable technology.

During fiscal year 2013, we invested in eSteam, a new technology utilizing steam to extract deep heavy oil. Cumulatively, we have spent approximately $2.0 million on this patented but unproven technology. To date, we have not tested or proven the viability of the technology. In addition, low energy and crude oil prices may make eSteam technology less attractive to potential users. If we cannot demonstrate that the technology is commercially feasible, we may incur additional losses.

eSteam testing methods and results are not known.

We do not have specific testing methodologies or specifications developed for testing the viability of the eSteam technology. The actual eSteam testing process could result in injury to others, and property and other damages that could expose us to claims for damages from unrelated parties.

Our eSteam technology may be subject to patent challenges.

If our patents of the eSteam technology are challenged, we could be required to spend considerable time and resources defending our patents.

Operations utilizing our eSteam technology may be subject to stringent environmental regulations.

Use of the eSteam technology will require significant amounts of water and energy. If we or third parties are unable to obtain the proper permits and sources of water and energy, then we may not be able to commercialize the new technology, and thus, generate any revenue from our investment.

Operations utilizing our eSteam technology may cause environmental damage.

When testing and operating the eSteam technology, we may cause environmental damage, as we would be injecting water and other fluids into the ground to generate underground steam in order to extract oil. We could be subject to significant penalties and fines if we were to cause environmental damage.

Risks Related to REX and non-industry specific matters.General Risk Factors

We have concentrations of cash deposits at financial institutions that exceed federal insurance limits.

We generally have cash deposits that exceed federal insurance limits. Should the financial institutions we deposit our cash in experience insolvency or other financial difficulty, our access to cash deposits could be limited. In extreme cases, we could lose our cash deposits entirely. This would negatively impact our liquidity and results of operations.

We may fail to realize the anticipated benefits of mergers, acquisitions, or other investments.

We intend to continue seeking growth opportunities. Acquisitions and similar transactions involve many risks that could harm our business, which include:

Rising focus on environmental, social and corporate governance matters from investors and regulators may increase our operating costs, bring down the value of our products and assets, and impact our ability to access capital markets.

Global climate change continues to receive significant attention from the public and the scientific community concerning the impacts from human activity, particularly the impact of greenhouse gas emissions, such as those from carbon dioxide and methane. The Biden administration’s focus on environmental issues has added pressure to take action domestically where there was already a heavier focus internationally. International, national, and local regulations are likely to increase in the coming years. Added requirements to reduce greenhouse gas emissions may increase our production costs. In addition, legislation promoting alternatives to combustion engine vehicles could reduce the demand for our products.

Climate change is also thought by some to be the cause for an increase in extreme weather events such as increased intensity of storms, rising sea levels, as well as heavy rains or droughts in areas historically less prone to those events. Any of these events can have a significant impact on our operations or quality of raw materials we purchase, resulting in increased costs. At this time, we are unable to determine the financial impact of any potential adverse weather events caused by climate change.

Incremental to legislative and regulatory pressure, institutional investors have continued to adopt environmental, social and governance guidelines (ESG). Some investors, including certain public and private fund management firms, pension funds, university endowments and family, have in recent years, begun adding stated policies to reduce or eliminate fossil fuel equities and encouraging additional consideration of ESG practices in a manner that could negatively impact our stock price. This may also result in a reduction of available capital funding for potential development projects, further impacting our future financial results.

Federal, state and local jurisdictions may challenge our tax return positions.

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 undergoing a federal income examination for the years ended January 31, 2015 through 2020. This could result in material additional income tax payments we would have to make and higher income tax expense in future periods.

None.

The information required by this Item 2 is set forth in Item 1 of this report under “Ethanol Investments” and “Facilities” and is incorporated herein by reference..

We are, from time to time, involved in various legal proceedings incidental to the conduct of our business. We believe that any current proceedings will not have a material adverse effect on our financial condition or results of operations.

Information About Our Executive Officers

Executive Officers of the Company

Set forth below is certain information about each of our executive officers.

*Also serves as a director.

Stuart Rose was elected our Executive Chairman of the Board in 2015. Mr. Rose had served as our Chairman of the Board and Chief Executive Officer since our incorporation in 1984 as a holding company. Prior to 1984, Mr. Rose was Chairman of the Board and Chief Executive Officer of Rex Radio and Television, Inc., which he founded in 1980 to acquire the stock of a corporation which operated four retail stores.

Zafar Rizviwas elected Chief Executive Officer in 2015. Mr. Rizvi has been our President and Chief Operating Officer since 2010, was Vice President from 2006 to 2010. From 1991 to 2006, Mr. Rizvi was our Vice President – Loss Prevention.

Douglas Bruggeman has been our Vice President–Finance and Treasurer since 1989 and was elected Chief Financial Officer in 2003. From 1987 to 1989, Mr. Bruggeman was our Manager of Corporate Accounting. Mr. Bruggeman was employed with the accounting firm of Ernst & Young prior to joining us in 1986.

Edward Kress has been our Secretary since 1984. Mr. Kress has been a partner of the law firm of Dinsmore & Shohl LLP (formerly Chernesky, Heyman & Kress P.L.L.), our legal counsel, since 1988. Mr. Kress has practiced law in Dayton, Ohio since 1974.

Not Applicable.

PART II

SHAREHOLDER INFORMATION

Our common stock is traded on the New York Stock Exchange under the symbol REX.

As of March 28, 2019,April 5, 2022, there were 8562 holders of record of our common stock, including shares held in nominee or street name by brokers.

Dividend Policy

We did not pay dividends in the current or prior years. We (includingOn August 31, 2021, our consolidated subsidiaries) currently have no restrictions on the paymentBoard of dividends. Our minority owned ethanol subsidiary has restrictions on its abilityDirectors increased our share repurchase authorization by an additional 500,000 shares. At January 31, 2022, a total of 449,413 shares remained available to pay dividends to members (including REX). Our consolidated subsidiary, One Earth, paid dividends to REX of approximately $13.4 million, $10.2 million and $10.2 million during fiscal years 2018, 2017 and 2016, respectively. Our consolidated subsidiary, NuGen, paid dividends to REX of approximately $7.4 million and $15.7 million during fiscal years 2017 and 2016, respectively. NuGen paid no dividends to REX during fiscal year 2018.purchase under this authorization.

Issuer Purchases of Equity Securities

Equity Compensation Plans

Refer to Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information regarding shares authorized for issuance under equity compensation plans.

Performance Graph

The following graph compares the yearly percentage change in the cumulative total shareholder return on our Common Stock against the cumulative total return of the S&P 500 Stock Index and a peer group comprised of Pacific Ethanol,Alto Ingredients, Inc. and Green Plains, Inc. for the period commencing January 31, 20142017 and ended January 31, 2019.2022. The graph assumes an investment of $100 in our Common Stock and each index on January 31, 20142017 and reinvestment of all dividends.

The following statements of operations and balance sheet data have been derived from our consolidated financial statements and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and related Notes. See Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of net sales and revenue and gross profit, income from ethanol investments, the benefit/provision for income taxes and the refined coal acquisition. These items have fluctuated significantly in recent years and may affect comparability of years.

Five Year Financial Summary

(In Thousands, Except Per Share Amounts)

Overview

We have been an investor in ethanol production facilities beginning in 2006 and a refined coal production facility in 2017.during the period from 2017 through November 2021. We currently have equity investments in three ethanol production entities, two of which are majority ownership interests, and a majority ownership in oneinterests. Our refined coal production entity.business ceased operations in November 2021 and the facility was subsequently sold. We have classified the refined coal business as discontinued operations. We may make additional alternative energy investments in the future.future and are currently working on a carbon sequestration project near our One Earth Energy location.

Our ethanol operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, non-food grade corn oil and natural gas. 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 a number of factors that affect commodity prices in general, including crop conditions, weather, federal policy and foreign trade. Because the market price of ethanol is not always directly related to corn prices, at times ethanol prices may not follow movements in corn prices and, in an environment of higher corn prices or lower ethanol 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 expect our ethanol plants to produce approximatelyat least 2.8 gallons of denatured ethanol for each bushel of grain processed in the production cycle. We refer to the actual gallons of denatured ethanol produced per bushel of grain processed as the realized yield. We refer to the difference between the price per gallon of ethanol and the price per bushel of grain (divided by the realized yield) as the “crush spread.” Should the crush spread decline, it is possible that our ethanol plants will generate operating results that do not provide adequate cash flows for sustained periods of time. In such cases, production at the ethanol plants may be reduced or stopped altogether in order to minimize variable costs at individual plants.

We attempt to manage the risk related to the volatility of commodity prices by utilizing forward grain and natural gas purchase contracts, forward ethanol, distillers grains and non-food grade corn oil sale contracts and commodity futures and swap agreements as management deems appropriate. We attempt to match quantities of these sales contracts with an appropriate quantity of grain purchase contracts over a given period of time when we can obtain an adequate gross margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price. Consequently, we generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in theour realized crush spread for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations of our ethanol facilities. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swaps, in conjunction with certain of our grain procurement and commodity marketing activities.

Commodity prices

We reported net income attributable to REX common shareholders of $52.4 million in fiscal year 2018 were subject2021 compared to approximately $3.0 million in fiscal 2020. Our ethanol business bounced back strongly in fiscal 2021 particularly in the fourth quarter in comparison to fiscal 2020, which was impacted by the COVID-19 pandemic. The two largest drivers of ethanol profitability are corn and ethanol pricing, both of which experienced significant volatility. For fiscal year 2018,volatility within the averageyear. Chicago Board of Trade (“CBOT”) near-month corn priceprices per bushel ranged from a low of approximately $3.40 per bushel$5.10 in July 2018September 2021 to a high of approximately $4.08$7.40 in April 2021. S&P Global Platts ethanol pricing per bushel in May 2018. Corn prices were impacted throughout the year from consecutive strong corn harvests in 2017 and 2018. Ethanol prices had significant fluctuations ranginggallon ranged from a low of approximately $1.20 per gallon$1.64 in November 2018February 2021 to a high of approximately $1.53 per gallon$3.80 in March 2018. Ethanol prices were influenced by many factors throughout the year including domestic demand, record exports and increases in U.S. ethanol production. Ethanol prices in 2018 were negatively impacted, in part, by increased small refiner waivers granted by the Environmental Protection Agency (“EPA”) and the resulting reductions to the Renewable Fuel Standard (“RFS”) obligations and ethanol demand.November 2021.

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, purchased the entire ownership interest of an entity that ownsowned a refined coal facility for approximately $12.0 million.facility. We began operating the refined coal facility immediately after the acquisition. We expect thatAs the revenues from the sale of refined coal produced in the facility will be subsidized byplant was no longer eligible to receive federal production tax credits throughbeginning on November 18, 2021, subjectwe ceased operations on that date. We began classifying this operation as discontinued operations in the third quarter of fiscal 2021.

The Company is working with the University of Illinois and is in the exploratory stage of a carbon sequestration project near the One Earth Energy ethanol plant. A test well has been drilled and three-dimensional seismic testing has been performed. We are working on simulation models to meeting qualified emissions reductionspredict the movement of carbon dioxide injection into the subsurface, additional testing and other requirements as governed by Section 45completion of a class VI permit application. A front-end engineering design study has been completed for a carbon dioxide liquification facility for the One Earth Energy plant, and we plan to begin seeking bids once we have completed additional engineering work. At this time we do not know total cost to complete or the feasibility of the Internal Revenue Code. In orderproject.

During fiscal year 2013, we entered into a joint venture to maintain compliance with Section 45file and defend patents for eSteam technology. The patented technology is an enhanced method of heavy oil recovery involving zero emissions downhole steam generation. To date, we have not successfully had a field operation nor demonstrated that the technology is commercially feasible. We own 60% and our partner owns 40% of the Internal Revenue Code, weentity named Future Energy, LLC, an Ohio limited liability company. We have no current plans to operate this technology and are required to test every six months, through an independent laboratory, the effectiveness of our process with respect to emissions reductions. Annually, the IRS publishes the amount of federal income tax credit earned per ton of refined coal produced and sold for a given calendar year, which for 2018 is $7.03 per ton.maintaining patents in limited countries.

Net income attributable to REX common shareholders was approximately $31.6 million in fiscal year 2018 compared to approximately $39.7 million in fiscal year 2017. The current year benefitted from reductions in our effective tax rate resulting from the impact of federal production tax credits associated with our refined coal operations and from the impact of research and experimentation credits associated with our ethanol and by-products operations. Fiscal year 2017 benefitted from the impact of tax reform legislation as we remeasured our deferred tax liabilities at a significantly lower tax rate. Gross profit in fiscal year 2018 was significantly lower compared to fiscal year 2017, primarily a result of lower ethanol crush spreads and the impact of our refined coal facility which generated a gross loss for a full year of operations in fiscal year 2018 compared to a partial year of operations in fiscal year 2017. Due to the inherent volatility of commodity prices within the ethanol industry, the uncertainty regarding future refined coal production and associated financial results, we cannot predict the likelihood of future operating results being similar to the fiscal year 2018 results.

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.

Through a wholly owned subsidiary REX I.P., LLC, we entered, during fiscal year 2013, into a joint venture to file and defend patents for technology relating to heavy oil and oil sands production methods, and to attempt to commercially exploit the technology to generate license fees, royalty income and development opportunities. The patented technology is an enhanced method of heavy oil recovery involving zero emissions downhole steam generation. We own 60% and Hytken owns 40% of the entity named Future Energy, LLC, an Ohio limited liability company. Future Energy is managed by a board of three managers, two appointed by us and one by Hytken.

We agreed to fund direct patent expenses relating to patent applications and defense, annual annuity fees and maintenance on a country by country basis, with the right to terminate funding and transfer related patent rights to Hytken. We may also fund, through loans, all costs relating to new intellectual property, consultants, and future research and development, pilot field tests and equipment purchases for commercialization stage of the patents. To date, we have paid approximately $2.0 million to purchase our ownership interest and fund patent and other expenses. We have not tested or proven the commercial feasibility of the technology.

Ethanol Investments

In fiscal year 2006, we entered the ethanol industry by investing in several entities organized to construct and subsequently operate, ethanol producing plants. We are invested in three entities as of January 31, 2019,2022, utilizing equity investments. The following table is a summary of our ethanol investmentsentity ownership interests at January 31, 2019 (gallons2022:

The three entities own a total of six ethanol production facilities, which in millions):aggregate shipped approximately 699 millions gallons of ethanol over the twelve-month period ended January 31, 2022. REX’s effective ownership of gallons shipped, for the twelve-month period ended January 31, 2022, by the ethanol production facilities in which we have ownership interests was approximately 282 million gallons.

Trends and Uncertainties

Renewable Fuel Standard II (“RFS II”), established in October 2010, has been an important factor in the growth of ethanol usage in the United States. In recent years, there has been much uncertainty on 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 was to 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 less than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement to submit renewable identification numbers (“RINs”). The EPA, through consultation with the Department of Energy and the Department of Agriculture, can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 85 refinery exemptions for 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.0 billion gallons.

On December 7, 2021, the EPA issued proposed volumes for 2021 and 2022 and reduced the previously finalized volumes for 2020 to account for challenges for that year including the COVID-19 pandemic. The proposed volumes for conventional biofuels were 13.32 billion gallons and 15.0 billion gallons for 2021 and 2022, respectively. The 2020 volumes were proposed at 12.5 billion gallons, down from the previously finalized 15.0 billion gallons. In addition, the EPA proposed denying 65 pending applications for SREs in response to the 2020 decision by the U.S. Court of Appeals for the 10^th Circuit. The EPA also proposed adding 250 million gallons of “supplemental obligation” to the 2022 proposed volumes and stated its intent to add another 250 million gallons to 2023 to address the remand of the 2016 waiver by the D.C Circuit. The EPA implemented a public notice and comment process on this announcement.

Due to the Russian-Ukraine conflict, there is a concern that the corn supply will be adversely affected, with a potential impact on price and corn availability in the United States.

Should these trends and uncertainties continue, our future operating results are likely to be negatively impacted.

Results of Operations

For a detailed analysisThe following table summarizes our results from operations (amounts in thousands):

The following table summarizes net sales and revenue by product group:

¹ Refined coal sales were recorded net of periodthe cost of coal as the Company purchased the coal feedstock from the same customer to period changes, seewhich the segment discussion that follows this section as that discussion reflects how management views and monitors our business.processed refined coal was sold.

The following table summarizes selected operating data:

Comparison of Fiscal Years 20182021 and 20172020 (Consolidated Results)

Continuing Operations

Net Sales and Revenue – Net sales and revenue in fiscal year 20182021 increased approximately 108% compared to fiscal year 2020. Both of our consolidated plants produced at or near capacity during fiscal year 2021. In addition, stronger commodity pricing in fiscal year 2021 contributed to the increase in sales between the two fiscal years.

Ethanol sales increased in fiscal year 2021 compared to fiscal year 2020 as the number of gallons increased 28% and the average selling price increased 70% over the same period. The increase in ethanol selling price resulted primarily from an increase in demand and an increase in commodity prices.

Dried distillers grains sales increased 74% in fiscal year 2021 compared to fiscal year 2020 as the number of tons sold increased 27% and the average selling price per ton increased 37%.

Non-food grade corn oil sales increased 158% as the number of pounds sold increased 31% and the average selling price increased 92% in fiscal year 2021 over the prior fiscal year.

Modified distillers grains sales increased 247% in fiscal year 2021 compared to fiscal year 2020 as the number of tons sold increased 164% and the average selling price per ton increased 31%.

Losses on derivative financial instruments were approximately $486.7$12.1 million a 7.5% increase from approximately $452.6during fiscal year 2021, compared to $1.2 million in fiscal year 2017.2020. The increase in losses on derivative financial instruments resulted primarily from an increase in volatility in the commodity markets during 2021.

The volume increases discussed above were primarily a result of operating near full capacity in the current year versus fiscal 2020, which was primarilynegatively impacted by lower demand due to the COVID-19 outbreak, lower ethanol pricing, an oversupply of oil and diminished local supplies of corn from a poor 2019 harvest caused by higher saleslocalized weather conditions. These factors resulted in idling both of our consolidated ethanol plants in March of 2020. In May of 2020, businesses and other activities slowly began to reopen, which led to an increase in demand for gasoline and ethanol, and by-products segmentin related prices. As a result, we resumed production at the One Earth ethanol plant in May of approximately $33.7 million.2020 and at the NuGen ethanol plant in June of 2020. In addition, stronger commodity pricing during fiscal year 2021 contributed to the increase in sales between the two fiscal years.

Gross Profit – Gross profit wasfor fiscal year 2021 increased approximately $30.2$78.0 million, or 399%, over fiscal year 2020. Gross profit in fiscal year 2018, or 6.2%2021 was 12.6% of net sales and revenue, versus approximately $44.2 million in fiscal year 2017 or 9.8% of net sales and revenue. Gross profit for fiscal year 2018 decreased by approximately $7.7 million compared to fiscal year 2017 as a result of operations in the ethanol and by-products segment and by approximately $6.3 million as a result of operations in the refined coal segment.

Selling, General and Administrative Expenses – Selling, general and administrative expenses for fiscal year 2018 were approximately $20.6 million (4.2% of net sales and revenue), a decrease of approximately $3.5 million or 14.6% from approximately $24.1 million (5.3% of net sales and revenue) for fiscal year 2017. A majority of the decrease results from lower incentive compensation expense associated with lower profitability levels in fiscal year 2018 compared to fiscal year 2017 as well as the modification of our executive compensation program to include a one-time cumulative earnings adjustment for fiscal year 2018. The decrease was also related to professional fees and commission expense associated with the refined coal acquisition, which were lower in fiscal year 2018 compared to fiscal year 2017.

Equity in Income of Unconsolidated Ethanol Affiliates – During fiscal years 2018 and 2017, we recognized income of approximately $1.5 million and $3.2 million, respectively, from our equity investment in Big River, which is included in our ethanol and by-products segment results. Income recognized in fiscal year 2017 was

reduced by approximately $0.8 million as a result of an impairment charge Big River incurred. Our investment in Big River, which has interests in four ethanol production plants, has an effective ownership of ethanol gallons shipped in the trailing twelve months ended January 31, 2019 of approximately 370 million gallons. The decline in income from fiscal year 2017 is reflective of industry conditions.

We expect the operating experience of Big River to be generally consistent with the trends in crush spread margins described in the “Overview” section as Big River’s results are dependent on the same key drivers as our other ethanol investments (ethanol, corn, dried distillers grains and natural gas pricing). 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 the fiscal year 2018 results.

Interest and Other Income – Interest and other income for fiscal year 2018 was approximately $3.4 million compared to approximately $2.1 million for fiscal year 2017. Interest income has increased as yields on our excess cash have improved compared to fiscal year 2017. Fiscal year 2017 income includes federal grants of approximately $0.7 million.

Income Before Income Taxes – As a result of the foregoing, income before income taxes was approximately $14.6 million for fiscal year 2018 versus approximately $25.4 million for fiscal year 2017.

Provision for Income Taxes– Our effective tax rate was a benefit of 157.1% and 76.9% for fiscal years 2018 and 2017, respectively. Our effective rate is impacted by the noncontrolling interests of the companies we consolidate, as we recognize 100% of their income or loss before income taxes and noncontrolling interests. However, we only provide an income tax provision or benefit for our portion of the subsidiaries’ income or loss with a noncontrolling interest. Our effective tax rate decreased by 145.2% in fiscal year 2018 (approximately $21.2 million) and by 45.4% in fiscal year 2017 (approximately $11.5 million) as a result of federal production tax credits earned by our refined coal facility. The amount of these credits earned in future periods will vary with refined coal production levels. During fiscal year 2018, our effective tax rate decreased by 77.8% (approximately $11.4 million) as a result of research and experimentation credits earned by our ethanol plants over a multi-year period. The amount of these credits earned in future periods will vary depending on the level of qualifying research expenditures at our ethanol plants. Primarily related to the research and experimentation credits, the provision for uncertain tax positions increased our effective tax rate by 47.1% (approximately $6.9 million) in fiscal year 2018. The Tax Cuts and Jobs Act of 2017 (“Tax Act”) reduced the federal income tax rate on corporations from 35% to 21%, which resulted in a benefit of 56.6% (approximately $14.4 million) to our effective tax rate in fiscal year 2017 as our deferred tax liabilities were remeasured at the lower federal income tax rate.

Net Income – As a result of the foregoing, net income was approximately $37.5 million for fiscal year 2018 versus approximately $44.9 million for fiscal year 2017.

Noncontrolling Interests– Income attributable to noncontrolling interests was approximately $5.9 million and $5.2 million during fiscal years 2018 and 2017, respectively, and represents the other owners’ share of the income or loss of NuGen, One Earth, the refined coal entity and Future Energy. Income attributable to noncontrolling interests of One Earth and NuGen were approximately $5.8 million and $0.1 million, respectively, during fiscal year 2018 and were approximately $5.6 million and $0.1 million, respectively, during fiscal year 2017. The loss attributable to noncontrolling interests of the refined coal entity was approximately $0.7 million and approximately $0.5 million during fiscal years 2018 and 2017, respectively. We do not expect to recover any portion of the noncontrolling interests holder’s share of prior Future Energy losses, thus, we recognized approximately $0.7 million of expense in fiscal year 2018.

Net Income Attributable to REX Common Shareholders – As a result of the foregoing, net income attributable to REX common shareholders was approximately $31.6 million for fiscal year 2018 compared to $39.7 million for fiscal year 2017.

Business Segment Results

We have two reportable segments, i) ethanol and by-products and ii) refined coal. In fiscal year 2017, we began reporting the results of our refined coal operation as a new segment as a result of the August 10, 2017 acquisition of an entity that operates a refined coal facility. Prior to the acquisition, we had one reportable segment, ethanol.

The following sections discuss the results of operations for each of our business segments and corporate and other. As discussed in Note 16, our chief operating decision maker (as defined by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”(“ASC 280”) evaluates the operating performance of our business segments using net income attributable to REX common shareholders. The following tables summarize segment and other results and assets (amounts in thousands):

¹We record sales in the refined coal segment net of the cost of coal as we purchase the coal feedstock from the customer to which refined coal is sold.

Ethanol and by-products Segment

The ethanol and by-products segment includes the consolidated financial results of One Earth and NuGen, our equity investment in Big River and certain administrative expenses. The following table summarizes selected data from One Earth and NuGen:

The following table summarizes sales from One Earth and NuGen, by product group (amounts in thousands):

Ethanol sales increased from approximately $359.2 million in the prior year to approximately $368.3 million in the current year, primarily a result of an increase of 29.8 million gallons (11.6%) sold during fiscal year

2018. The increase in gallons sold is attributable to the capacity expansion projects we have invested in over the last several years. The volume increase was offset by a $0.11 decline in the price per gallon sold. Dried distillers grains sales increased from approximately $63.1 million in the prior year to approximately $85.4 million in the current year, primarily a result of a $36.31 increase in the price per ton sold. Management believes the price increase is primarily related to stronger export markets in fiscal year 2018 compared to fiscal year 2017. Non-food grade corn oil sales decreased from approximately $21.2 million in the prior year to approximately $20.1 million in the current year, primarily a result of a decrease of $0.04 in the price per pound sold during fiscal year 2018. The price decrease was partially offset by a 10.8% increase in pounds sold during fiscal year 2018. Similar to the ethanol increase, capacity expansion projects undertaken over the last several years are the primary reason for the increase in pounds sold and is consistent with the increased ethanol production. Modified distillers grains sales increased from approximately $8.5 million in the prior year to approximately $12.0 million in the current year, primarily a result of an increase of $13.55 in the price per ton sold during fiscal year 2018. In addition tons of modified distillers grains sold increased 8.2% in fiscal year 2018 compared to fiscal year 2017. We expect that sales of One Earth and NuGen in future periods will be based upon the following:

This expectation assumes that One Earth and NuGen will operate at slightly above historical production levels, based upon recent plant expansion projects, which is dependent upon market conditions, plant profitability and efficient plant operations. We expect production rates at the NuGen ethanol facility to be below historical levels during the first quarter of fiscal year 2019 as weather-related logistical delays have negatively impacted operations. We may vary the amounts of ethanol, dried and modified distillers grains and corn oil produced, and thus, the resulting sales, based upon market conditions. NuGen and One Earth have received the EPA pathway approval and have permits to increase each of their production levels to 150 million gallons annually.

Gross profit was approximately $43.9 million in fiscal year 2018, or 9.0%5.2% of net sales and revenue which was approximately $7.7 million lower compared to approximately $51.5 million of gross profit in fiscal year 2017 or 11.4% of net sales2020. The primary contributor to the increase in gross profit was the increased crush spread and revenue.improved pricing for distillers grain and corn oil. The crush spread for fiscal year 20182021 was approximately $0.09$0.16 per gallon of ethanol sold compared to approximately $0.23$0.03 per gallon of ethanol sold during fiscal year 2017. The increase of approximately $22.3 million in sales of dried distillers grains compared to the prior year positively affected gross profit. Grain accounted for approximately 77% ($341.1 million)2020. Additionally, both of our costconsolidated ethanol plants were idled for portions of salesfiscal year 2020. Consequently, a return to operating at or near capacity during fiscal year 2018 compared2021 contributed to approximately 75% ($302.1 million) duringthe increased gross profit for fiscal year 2017. Natural gas accounted for approximately 6% ($24.7 million) of our cost of sales during fiscal year 2018 consistent with approximately 6% ($25.2 million) during fiscal year 2017. The increase of approximately $3.4 million in sales of modified distillers grains compared to the prior year positively affected gross profit. In addition, corn oil sales negatively impacted gross profit in fiscal year 2018 by approximately $1.1 million2021 compared to fiscal year 2017. Real estate taxes were approximately $4.7 million lower in fiscal year 2018 compared to fiscal year 2017 as a result of disputed assessments being settled, and related taxes refunded to the Company.2020. Given the inherent volatility in ethanol, distillers grains, non-food grade corn oil, grain and natural gas prices, we cannot predict the likelihood that the spread between ethanol, distillers grains, non-food grade corn oil and grain prices in future periods will be consistent with prices in historical periods.

Grain accounted for approximately 84% ($568.9 million) of our cost of sales during fiscal year 2021 compared to approximately 78% ($274.6 million) during fiscal year 2020. Natural gas accounted for approximately 4% ($29.4 million) of our cost of sales during fiscal year 2021 compared to approximately 5% ($17.7 million) during fiscal year 2020. Both the grain and natural gas dollar increases were primarily attributable to an increase in the cost per unit. Incrementally, the higher production levels incurred in fiscal year 2021 compared to fiscal year 2020 also contributed to the increase.

We attempt to match quantities of ethanol, distillers grains and non-food grade corn oil sale contracts with an appropriate quantity of grain purchase contracts over a given period of time when we can obtain an adequate margin resulting from the crush spread inherent in the contracts we have executed. However, the market for future ethanol sales contracts generally lags the spot market with respect to ethanol price. Consequently, we

generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short

durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in theour realized crush spread for more than four months. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swaps, in conjunction with certain of our grain procurement activities. None of our forecasted ethanol, approximately 11% of our forecasted distillers grains and approximately 23% of our forecasted non-food grade corn oil production during the next 12 months have been sold under fixed-price contracts. The effect of a 10% adverse change in the price of ethanol, distillers grains and non-food grade corn oil from the current pricing would result in a decrease in annual revenues in fiscal year 2019 of approximately $45.3 million. Similarly, approximately 2% of our estimated corn usage for the next 12 months was subject to fixed-price contracts. The effect of a 10% adverse change in the price of corn from current pricing would result in an increase in annual cost of goods sold in fiscal year 2019 of approximately $36.9 million. Approximately 29% of our estimated natural gas usage for the next 12 months was subject to fixed-price contracts. The effect of a 10% adverse change in the price of natural gas from current pricing would result in an increase in annual cost of goods sold in fiscal year 2019 of approximately $1.7 million.commodity marketing activities.

Selling, generalGeneral and administrativeAdministrative (“SG&A”) Expenses – SG&A expenses for fiscal year 20182021 were approximately $16.2$28.5 million (3.3%(3.7% of net sales and revenue) compared to, an increase of approximately $17.8$10.9 million (3.9%or 61% from approximately $17.6 million (4.7% of net sales and revenue) for fiscal year 2017. A majority2020. The increase was due, in part, to higher outbound freight expense, as more of our sales contracts provided for shipping to be paid by us in fiscal year 2021 compared to fiscal year 2020. In addition, the decrease results from lowerincrease reflected higher incentive compensation expense associated with lowerhigher profitability levels in fiscal year 20182021 compared to fiscal year 2017 as well as our executive compensation program was modified to include a one-time cumulative earnings adjustment for fiscal year 2018. This decrease was partially offset by increases2020.

Equity in ethanol freight expense and professional fees in fiscal year 2018 compared to fiscal year 2017.

Income of Unconsolidated Ethanol Affiliates – During fiscal years 20182021 and 2017,2020, we recognized income of approximately $1.5$6.6 million and $3.2$0.5 million, respectively, from our equity investment in Big River.River Resources, LLC (“Big River”). Our investment in Big River, which has interests in four ethanol production plants, hasrepresents an effective ownership of approximately 365 million gallons of ethanol gallons shipped in the trailing twelve months ended January 31, 2019 of approximately 370 million gallons.

Interest and other income was approximately $2.5 million for fiscal year 2018 compared to approximately $1.6 million for fiscal year 2017. The income has increased as yields on our excess cash have improved compared to fiscal year 2017. Fiscal year 2017 income includes federal grants of approximately $0.7 million.

Income2022. Big River’s 2020 financial results were impacted by reduced ethanol demand related to noncontrolling interests was approximately $5.9 million and approximately $5.7 million during fiscal years 2018 and 2017, respectively.These amountsrepresent the other owners’ share of the income of NuGen and One Earth.COVID-19 pandemic.

The provision for income taxes was approximately $2.3 millionWe expect the operating experience of Big River to be generally consistent with the trends in fiscal year 2018 compared to a benefit for income taxes of approximately $3.2 million in fiscal year 2017.During fiscal year 2018, we recognized the tax benefits of research and experimentation credits earned by our ethanol plants. These credits significantly reduced the tax provision during fiscal year 2018.The Tax Act was enacted on December 22, 2017 and became effective January 1, 2018, making significant changes to the Internal Revenue Code. Among other provisions, the Tax Act reduces the federal statutory corporate income tax rate from 35% to 21%. Accordingly, the carrying value of our deferred tax liabilities was materially decreased, resulting in an income tax benefit for fiscal year 2017.

Segment profit for fiscal year 2018 wasapproximately $23.3 million, a decrease of approximately $12.6 million fromapproximately $35.9 million for fiscal year 2017. The decrease from fiscal year 2017 results is primarily related to lower gross profit levels in fiscal year 2018 compared to fiscal year 2017 and a tax benefit

recognized in fiscal year 2017 related to remeasuring deferred tax liabilities as the Tax Act lowered the statutory federal income tax rate on corporations from 35% to 21%.

Refined Coal Segment

The refined coal segment includes the consolidated financial results of our refined coal entity and certain administrative expenses. We acquired the refined coal entity during the third quarter of fiscal year 2017.

The refined coal entity sells one product, refined coal. We record salescrush spread margins described in the refined coal segment net of the cost of coal“Overview” section as we purchase the coal feedstock from the customer to which refined coal is sold. Sales increased from approximately $433,000 in the prior year to approximately $786,000 in the current year. The increaseBig River’s results primarily from the entity operating the entire year of fiscal year 2018 compared to approximately half a year in fiscal year 2017. We expect future period sales to vary dependingare dependent on fluctuations in demand from the site host utility, which generally change based upon weather conditions in the geographic markets the utility serves and competing fuel prices and supplies.

Gross loss was approximately $13.6 million in fiscal year 2018, which was approximately $6.3 million greater compared to approximately $7.3 million of gross loss in fiscal year 2017. The increase in gross loss results primarily from the entity operating the entire year of fiscal year 2018 compared to approximately half a year in fiscal year 2017. We expect future period gross loss to vary in generally the same mannerkey drivers as the sales fluctuations described above. Based on the agreements in place that govern the operations, salesour other ethanol investments (ethanol, corn, dried distillers grains and purchasing activities of the refined coal plant, we expect that the refined coal operation will continue operating at a gross loss and that the ongoing losses will be subsidized by federal production income tax credits.natural gas pricing).

Selling, general and administrative expenses were approximately $1.6 million and approximately $2.7 million in fiscal years 2018 and 2017, respectively. The decrease in expense is primarily related to lower commission expense, payable to the minority investor in the refined coal entity. The commission expense is associated with the refined coal acquisition.

Income related to noncontrolling interests was approximately $0.7 million and approximately $0.5 million during fiscal years 2018 and 2017, respectively.This amountrepresents the other owner’s share of the pre-tax loss of refined coal operations.

The benefit for income taxes was approximately $24.7 million and approximately $15.2 million during fiscal years 2018 and 2017, respectively. These amounts include the benefit of Section 45 production tax credits and a benefit related to segment loss before income taxes. The refined coal facility is eligible to earn tax credits through November, 2021. However, the amount of credits earned will vary with annual production levels.

As a result of the foregoing, including the benefit of federal tax credits associated with refined coal production and sales, segment profit was approximately $10.1 million and approximately $5.6 million for fiscal years 2018 and 2017, respectively.

Corporate and Other

Selling, general and administrative expenses for fiscal year 2018 were approximately $2.8 million compared with $3.6 million for fiscal year 2017. The decrease was primarily related to higher professional expenses incurred in fiscal year 2017 that were associated with due diligence and other efforts related to researching the refined coal operations prior to our refined coal acquisition.

Interest and other income was approximately $1.0 million for fiscal year 2018 versus approximately $0.7 million for fiscal year 2017. The income has increased as yields on our excess cash have improved compared to fiscal year 2017.

We do not expect to recover any of the portion of the noncontrolling interests holder’s share of prior Future Energy losses, thus, we recognized approximately $0.7 million of expense in fiscal year 2018.

Corporate and other expenses exceeded interest and other income, for fiscal year 2018 byapproximately $1.8 million, consistent with fiscal year 2017.

Comparison of Fiscal Years 2017 and 2016 (Consolidated Results)

Net Sales and Revenue – Net sales and revenue in fiscal year 2017 were approximately $452.6 million, consistent with fiscal year 2016 sales.

Gross Profit – Gross profit was approximately $44.2 million in fiscal year 2017, or 9.8% of net sales and revenue, compared to approximately $71.0 million in fiscal year 2016, or 15.7% of net sales and revenue. Gross profit for fiscal year 2017 decreased by approximately $19.5 million compared to fiscal year 2016 as a result of operations in the ethanol and by-products segment and by approximately $7.3 million as a result of operations in the refined coal segment.

Selling, General and Administrative Expenses – Selling, general and administrative expenses for fiscal year 2017 were approximately $24.1 million (5.3% of net sales and revenue), an increase of approximately $2.7 million or 12.5% from approximately $21.4 million (4.7% of net sales and revenue) for fiscal year 2016. The increase was primarily related to professional fees and commission expense associated with the refined coal acquisition.

Equity in Income of Unconsolidated Ethanol Affiliates – During fiscal years 2017 and 2016, we recognized income of approximately $3.2 million and $6.1 million, respectively, from our equity investment in Big River, which is included in our ethanol and by-products segment results. Income recognized in fiscal year 2017 was reduced by approximately $0.8 million as a result of an asset impairment charge Big River incurred which was related to an abandoned protein production project.

Interest and Other Income – Interest and other income for fiscal year 20172021 was approximately $2.3$0.1 million compared to approximately $0.6$1.8 million for fiscal year 2016.2020. Interest income has increaseddecreased as yields on our excess cash have improved compared to fiscal year 2016. Incomedecreased in fiscal year 2017 includes federal grants of approximately $0.7 million.2021.

(Loss) Gain on Disposal of Real Estate and Property and Equipment, net– We recognized losses of approximately $0.2 million in fiscal year 2017 compared to gains of approximately $0.3 million in fiscal year 2016. We sold three real estate properties in fiscal years 2016, which completed the sales of our former retail properties. The losses in fiscal year 2017 result from disposals of ethanol plant equipment.

Income from Continuing Operations Before Income Taxes – As a result of the foregoing, income from continuing operations before income taxes was approximately $25.4$75.8 million for fiscal year 20172021 versus approximately $56.9$4.2 million for fiscal year 2016.2020.

Provision (Benefit) for Income Taxes– Our effective tax rate was a provision of 25.1% and a benefit of 76.9% and a provision of 30.6%13.0% for fiscal years 20172021 and 2016,2020, respectively. Our effective rate is impacted by the noncontrolling interests of the companies we consolidate, as we recognize 100% of their income or loss in income before income taxes and noncontrolling interests. However, we only provide an income tax provision or benefit for our portion of the subsidiaries’ income or loss with a noncontrolling interest.loss. During fiscal year 2017,years 2021 and 2020, our effective tax rate decreased

by 45.4% 6.8% (approximately $11.5$5.2 million) and 47.7% (approximately $2.0 million), respectively, from the statutory rate, as a result of Section 45 production taxresearch and experimentation credits earned by our refined coal facility.ethanol plants. The Tax Act reducedamount of these credits earned in future periods will vary depending on the federal incomelevel of qualifying research expenditures at our ethanol plants. The provision for uncertain tax rate on corporations from 35% to 21%, which resulted in a benefit of 56.6% (approximately $14.4 million) topositions increased our effective tax rate as our deferred tax liabilities were remeasured at the lower federal income tax rate. Our domestic production activities deduction increased from 2.9% in fiscal year 2016 to 5.9% (total benefit of approximately $1.510.9% (approximately $8.3 million) and 24.8% (approximately $1.0 million) in fiscal year 2017, primarily as a result of agricultural cooperative patronage.2021 and 2020, respectively, from the statutory rate.

Net Income from Continuing Operations– As a result of the foregoing, net income from continuing operations was approximately $44.9$56.8 million for fiscal year 2017 compared to2021 versus approximately $39.5$4.8 million for fiscal year 2016.2020.

Noncontrolling Interests–Interests (continuing operations) – Income attributable to noncontrolling interests (continuing operations) was approximately $5.2$9.2 million and $7.2$2.9 million during fiscal years 20172021 and 2016,2020, respectively, and represents the other owners’ share of the income or loss of NuGen and One Earth, the refined coal entity and Future Energy. Income attributable to noncontrolling interests of One Earth and NuGen were approximately $5.6 million and approximately $0.1 million, respectively, during fiscal year 2017 and were approximately $7.1 million and approximately $0.2, respectively, during fiscal year 2016. The loss attributable to noncontrolling interest of the refined coal entity was approximately $0.5 million during fiscal year 2017.Earth.

Net Income Attributable to REX Common Shareholders (continuing operations) – As a result of the foregoing, net income attributable to REX common shareholders (continuing operations) was approximately $39.7$47.6 million for fiscal year 20172021 compared to approximately $32.3$1.9 million for fiscal year 2016.2020.

Business Segment ResultsDiscontinued Operations

We have two reportable segments, i) ethanol and by-products and ii) refined coal. In fiscal year 2017, we began reporting the results of our refined coal operation as a new segment as a result of the August 10, 2017 acquisition of an entity that operates a refined coal facility. Prior to the acquisition, we had one reportable segment, ethanol.

The following sections discuss the results ofResults from discontinued operations of our ethanol and by-products segment and corporate and other. As discussed in Note 16, our chief operating decision maker (as defined by ASC 280) evaluates the operating performance of our business segments using net income attributable to REX common shareholders. The following tables summarize segment and other results and assets (amounts in thousands):

¹We record sales in the refined coal segment net of the cost of coal as we purchase the coal feedstock from the customer to which refined coal is sold.

Ethanol and by-products Segment

The ethanol and by-products segment includes the consolidated financial results of One Earth and NuGen, our equity investment in Big River and certain administrative expenses. The following table summarizes selected data from One Earth and NuGen:

The following table summarizes sales from One Earth and NuGen, by product group (amounts in thousands):

Ethanol sales increased from approximately $358.3 million in the prior year to approximately $359.2 million in the current year, primarily a result of an increase of 9.1 million gallons (3.7%) sold during fiscal year 2017. The increase in gallons sold is attributable to the capacity expansion projects we have invested in over the last several years. The volume increase was offset by a $0.05 decline in the price per gallon sold. Dried distillers grains sales decreased from approximately $71.2 million in the prior year to approximately $63.1 million in the current year, primarily a result of a $18.08 decline in the price per ton sold. The selling price decrease was partially offset by an increase of 21,709 tons (3.8%) sold during fiscal year 2017, a result of the same factors discussed above regarding ethanol volume increases. Management believes the decline in the selling price results primarily from the uncertainty regarding Chinese imports of domestic dried distillers grains as the China Ministry of Commerce had announced an anti-dumping and countervailing duty investigation in January 2016 and, in September 2016, imposed an anti-dumping tariff and a countervailing duty on U.S. dried distillers grains exports to China. In a final ruling in January 2017, China increased the dried distillers grains anti-dumping duty to a range of 42.2% up to 53.7% and the dried distillers grains countervailing duty to a range of 11.2% up to 12.0%. In November 2017, the China Ministry of Commerce announced that the countervailing duty would be repealed. In addition, Vietnam suspended imports of U.S. dried distillers grains for a majority of fiscal year 2017 and this also contributed to the decline in dried distillers grains prices. In September 2017,

Vietnam lifted its ban on imports of U.S. dried distillers grains. Our non-food grade corn oil sales increased from approximately $18.5 million in the prior year to approximately $21.2 million in the current year, primarily a result of an increase of 6.6 million pounds (9.9%) sold during the current year. Similar to the ethanol and dried distillers grains increases, the capacity expansion projects we have completed are the primary reason for the increase in pounds sold and are consistent with the increased ethanol production. Modified distillers grains sales increased from approximately $5.3 million in the prior year to approximately $8.5 million in the current year, primarily a result of a 74.8% increase in tons sold which was partially offset by a decline of $4.23 in the price per ton sold.

Gross profit was approximately $51.5 million in fiscal year 2017, or 11.4% of net sales and revenue which was approximately $19.5 million lower compared to approximately $71.0 million of gross profit in fiscal year 2016 or 15.7% of net sales and revenue. The crush spread for fiscal year 2017 was approximately $0.23 per gallon of ethanol sold compared to approximately $0.25 per gallon of ethanol sold during fiscal year 2016. The decline of approximately $8.1 million in sales of dried distillers grains compared to fiscal year 2016 negatively affected gross profit. Grain accounted for approximately 75% ($302.1 million) of our cost of sales during fiscal year 2017 compared to approximately 77% ($293.8 million) during fiscal year 2016. Natural gas accounted for approximately 6% ($25.2 million) of our cost of sales during fiscal year 2017 compared to approximately 5% ($20.6 million) during fiscal year 2016. The volume of ethanol sold during fiscal year 2017 compared to fiscal year 2016 positively impacted gross profit by approximately $2.1 million. In addition, corn oil sale positively impacted gross profit in fiscal year 2017 by approximately $2.7 million compared to fiscal year 2016. Plant related repairs and maintenance expense was approximately $1.7 million higher in fiscal year 2017 compared to fiscal year 2016.

Selling, general and administrative expenses for fiscal year 2017 were approximately $17.8 million (3.9% of net sales and revenue), consistent with fiscal year 2016 levels.

During fiscal years 2017 and 2016, we recognized income of approximately $3.2 million and $6.1 million, respectively, from our equity investment in Big River. Our investment in Big River, which has interests in four ethanol production plants, had an effective ownership of ethanol gallons shipped in the trailing twelve months January 31, 2018 of approximately 363 million gallons.

Interest and other income was approximately $1.6 million for fiscal year 2017 compared to approximately $0.2 million for fiscal year 2016. The income had increased as yields on our excess cash had improved compared to fiscal year 2016. Fiscal year 2017 income included federal grants of approximately $0.7 million.

Income related to noncontrolling interests was approximately $5.7 million and approximately $7.2 million during fiscal years 2017 and 2016, respectively.These amountsrepresent the other owners’ share of the income of NuGen and One Earth.

The benefit for income taxes was approximately $3.2 million in fiscal year 2017 compared to a provision (expense) of $18.3 million in fiscal year 2016. The Tax Act was enacted on December 22, 2017 and became effective January 1, 2018, making significant changes to the Internal Revenue Code. Among other provisions, the Tax Act reduces the federal statutory corporate income tax rate from 35% to 21%. Accordingly, the carrying value of our deferred tax liabilities was materially decreased, resulting in an income tax benefit for fiscal year 2017.

Segment profit for fiscal year 2017 wasapproximately $35.9 million, an increase of approximately $1.9 million fromapproximately$34.0 million for fiscal year 2016. The increase from fiscal year 2016 results was primarily related to a tax benefit recognized in fiscal year 2017 related to remeasuring deferred tax liabilities as the Tax Act lowered the statutory federal income tax rate on corporations from 35% to 21%. This tax benefit more than offset lower gross profit levels in fiscal year 2017 compared to fiscal year 2016.

Refined Coal Segment

The refined coal segment includesinclude the consolidated financial results of our refined coal entitybusiness and certain administrative expenses. We acquired the refined coal entity during the third quarter of fiscal year 2017. Our refined coal facility was eligible to earn Section 45 production tax credits. The Company ceased operation of its refined coal business as tax credits could no longer be earned on its operation beginning November 18, 2021. Beginning in the third quarter of fiscal year 2021, the results of the operation of the refined coal business have been recognized as discontinued operations. The refined coal business operated at a loss but generated tax credits that normally exceeded the operating loss.

The refined coal entity sellssold one product, refined coal. Sales were approximately $433,000 in fiscal year 2017, the initial period for which we reported the results of refined coal operations. We recordrecorded sales in the refined coal segment net of the cost of coal as we purchasepurchased the coal feedstock from the customer to which refined coal is sold. Sales increased from approximately $182,000 in the prior year to approximately $400,000 in the current year. During fiscal year 2020, operating results were adversely affected by lower utility plant demand from our only customer. Throughout our ownership of the refined coal business, sales varied depending on fluctuations in demand from the site host utility, which generally changed based upon weather conditions in the geographic markets the utility served and competing fuel prices and supplies.

Gross loss was approximately $7.3$8.2 million in fiscal year 2017. We expect future period2021, which was approximately $2.5 million higher compared to approximately $5.7 million of gross loss to vary in generally the same manner as the sales fluctuations described above.

Selling, general and administrative expenses were approximately $2.7 million in fiscal year 2017. These expenses included approximately $1.8 million of commission expense, payable to the minority investor2020. The increase in thegross loss results primarily from higher refined coal entity. The commission expense was associated with the refined coal acquisition.

Income related to noncontrolling interests was approximately $0.5 million duringproduction in fiscal year 2017. This amount represented the other owner’s share of the pre-tax loss of refined coal operations.2021 compared to fiscal year 2020.

The benefit for income taxes was approximately $15.2$13.3 million and approximately $6.6 million during fiscal year 2017years 2021 and included2020, respectively. These amounts include the benefit of Section 45 production tax credits and a benefit related to segmentoperating loss before income taxes. The increase in the benefit for income taxes primarily results from higher production in fiscal year 2021 compared to fiscal year 2020.

Loss related to noncontrolling interests was approximately $0.4 million and $0.3 million during fiscal years 2021 and 2020, respectively. This amount represents the other owner’s share of the pre-tax loss of refined coal operations.

Net income attributable to REX common shareholders from discontinued operations, net of tax, for fiscal year 2021 was approximately $4.8 million, an increase of $3.7 million from the net income attributable to REX common shareholders from discontinued operations, net of tax, of approximately $1.1 million for fiscal year 2020.

Net Income

As a result of the foregoing, including the benefit of federal tax credits associated with refined coal productionresults from both continuing and sales, segment profit for fiscal year 2017discontinued operations, net income attributable to REX common shareholders was approximately $5.6 million.

Corporate$52.4 million and Other

Selling, general and administrative expenses for fiscal year 2017 were approximately $3.6 million compared with approximately $3.2$3.0 million for fiscal year 2016. The increase is primarily related to higher professional expenses associated with due diligenceyears 2021 and other efforts related to researching the refined coal operations prior to our refined coal acquisition.2020, respectively.

Interest and other income was approximately $0.7 million for fiscal year 2017 compared to approximately $0.4 million for fiscal year 2016. The income has increased as yields on our excess cash have improved compared to fiscal year 2016.

Loss related to noncontrolling interests was insignificant during fiscal years 2017 and 2016.This amountrepresents the other owner’s share of the loss of Future Energy.

Corporate and other expenses exceeded interest and other income and gain on disposal of property and equipment, for fiscal year 2017 byapproximately $1.8 million, consistent with the $1.6 million loss for fiscal year 2016. The increase from fiscal year 2016 results is primarily related to increased professional expenses, not allocated to the ethanol and by-products or refined coal segments described above.

Comparison of Fiscal Years 2020 and 2019

See “Item 7 Management’s discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended January 31, 2021.

Liquidity and Capital Resources

Our primary sources of cash have been income from operations. Our primary uses of cash have been capital expenditures at our ethanol plants, the acquisition of the refined coal entity, stock repurchases and contributions to fund refined coal operating losses.

Outlook– Our cash and short-term investments balance of approximately $188.5$255.7 million at January 31, 2019 includes2022 included approximately $148.7$212.8 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 working capital needs.

We are investigating various uses of our excess cash. We have a stock buyback program and given ourwith an authorization level we could repurchase a total of 349,861an additional approximately 449,000 shares at January 31, 2019.2022. We typically repurchase our common stock when our stock price is trading at prices we deem to be a discount to the underlying value of our net assets. We plan to seek and evaluate other various investment opportunities including ethanol and/or energy related, carbon sequestration related, agricultural or other ventures we believe fit our investment criteria.

We expect capital expenditures to be in the range of approximately $4$15 million to $6$20 million in fiscal year 20192022 for various projects at our consolidated ethanol plants.plants and our carbon sequestration project. However, actual capital expenditures could vary from this range for unexpected expenditures as our plants continue to age.age or potential projects materialize. We expect to fund these capital expenditures with available cash at our ethanol plant subsidiaries.

Operating Activities – Net cash provided by operating activities was approximately $47.9$91.7 million for fiscal year 20182021 compared to approximately $41.0$8.6 million in fiscal year 2017.2020. During fiscal year 2018,2021, operating cash flow was provided by net income from continuing operations of approximately $37.5$56.8 million and adjustments of approximately $(0.4)$31.4 million, which consistconsisted of depreciation, amortization of operating lease right-of-use assets, stock based compensation expense, interest income from investments, income from equity method investments, loss on disposal of real estate and property and equipmentinterest income from investments, and the deferred income tax provision. Big River paid dividends to REX of approximately $4.0$5.5 million during fiscal year 2018. Accounts receivable decreased approximately $1.5 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventory decreased approximately $2.3 million, primarily a result of the timing of finished goods shipments to customers. Prepaid expenses and other assets decreased approximately $5.2 million, primarily a result of refunds paid to us for refundable real estate taxes. Income taxes refundable increased approximately $1.1 million, primarily as a result of carrying back general business credits to prior years and claiming refunds of income taxes. Accrued expenses and other liabilities decreased approximately $1.5 million, primarily a result of lower bonus accruals for fiscal year 2018.

Net cash provided by operating activities was approximately $41.0 million for fiscal year 2017. During fiscal year 2017, operating cash flow was provided by net income of approximately $44.9 million and adjustments of approximately $1.5 million, which consist of depreciation, stock based compensation expense, income from equity method investments, loss on sale of investment and disposal of real estate and property and equipment and the deferred income tax provision. Big River paid dividends to REX of approximately $6.5 million during fiscal year 2017.2021. Accounts receivable increased approximately $1.1$6.1 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventory increased approximately $3.6$4.8 million, primarily a result of larger quantities of finished goods and higher per unit costs at January 31, 2022. Prepaid expenses and other assets decreased approximately $0.2 million, primarily a result of a slight change in fair values of forward purchase contracts. Accounts payable increased approximately $16.0 million, primarily a result of the timing of finished goods shipments to customers. Prepaidinventory receipts and vendor payments. Refundable income taxes increased $1.1 million as a result of the timing of estimated tax payments. Accrued expenses and other assetsliabilities increased approximately $1.2$0.5 million, which was primarily a result of increased paymentoperating lease payments and higher incentive compensation in fiscal year 2021. Discontinued operations used cash of $6.7 million in fiscal year 2021.

Net cash provided by operating activities was approximately $8.6 million for refundable real estate taxes. Income taxes refundablefiscal year 2020. During fiscal year 2020, operating cash flow was provided by net income from continuing operations of approximately $4.8 million and adjustments of approximately $21.9 million, which consisted of depreciation, amortization of operating lease right-of-use assets, stock based compensation expense, income from equity method investments, interest income from investments, and the deferred income tax provision. Big River paid dividends to REX of approximately $3.5 million during fiscal

year 2020. Accounts receivable increased approximately $5.5 million, primarily as a result of carrying back Section 45 credits to the prior year and claiming a refund of income taxes. Accounts payable decreased approximately $1.7$6.7 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen. Inventory increased approximately $2.3 million, primarily a result of larger quantities of finished goods and higher per unit costs at January 31, 2021. Prepaid expenses and other assets increased approximately $3.2 million, primarily a result of higher fair values of forward purchase contracts. Accounts payable decreased approximately $2.6 million, primarily a result of the timing of inventory receipts and vendor payments and inventory receipts.payments. Accrued expenses and other liabilities increaseddecreased approximately $1.2$3.5 million, which was primarily a result of increasesoperating lease payments and lower incentive compensation in accrued commission payable related to the refined coal acquisition.

fiscal year 2020. Discontinued operations used cash of $2.8 million in fiscal year 2021.

Investing Activities – Net cash used inprovided by investing activities was approximately $24.6$5.3 million during fiscal year 20182021 compared to net cash used of approximately $35.7$20.8 million during fiscal year 2017.2020. Capital expenditures in fiscal year 20182021 totaled approximately $10.8$5.1 million, the majority of which was plant expansion capacitywere various projects at One Earth’s and NuGen’s ethanol plants. During fiscal year 2018,2021, we used cash of approximately $126.0$88.9 million for purchases of short-term investments and received cash of approximately $112.1$99.3 million related to maturities of these investments as one of these investments remained outstanding at January 31, 2019. We began investing in highly liquid short-term investments during fiscal year 2018 in order to increase earnings on excess cash.investments.

Net cash used in investing activities was approximately $35.7$20.8 million during fiscal year 2017.2020. Capital expenditures in fiscal year 20172020 totaled approximately $24.0$10.4 million, the majority of which was plant expansion capacitywere various projects at One Earth’s and NuGen’s ethanol plants. During fiscal year 2017,2020, we used cash of approximately $12.0$96.2 million for the refined coal acquisition.purchases of short-term investments and received cash of approximately $86.3 million related to maturities of these investments as certain of these investments remained outstanding at January 31, 2021.

Financing Activities – Net cash used in financing activities was approximately $25.8$11.1 million during fiscal year 20182021 compared to approximately $2.6$22.4 million for fiscal year 2017.2020. During fiscal year 2018,2021, we purchased approximately 84,000 shares of our common stock for approximately $6.6 million in open market transactions. During fiscal year 2021, we used cash of approximately $4.5$4.8 million to purchase shares from and pay dividends to noncontrolling members.members of the entities that own One Earth’s and NuGen’s ethanol plants. During fiscal year 2018,2021, we received approximately $0.5$0.3 million in capital contributions from the minority investor in the refined coal entity. We expect to continue to receive these capital contributions in the futurebusiness which is now classified as we expect the minority investor to continue funding its proportionate share of refined coal operating losses. During fiscal year 2018, we purchased approximately 305,000 shares of our common stock for approximately $21.9 million in open market transactions.discontinued operations.

Net cash used in financing activities was approximately $2.6$22.4 million during fiscal year 2017.2020. During fiscal year 2017,2020, we purchased approximately 315,000 shares of our common stock for approximately $19.6 million in open market transactions. During fiscal year 2020, we used cash of approximately $3.5$2.9 million to purchase shares from and pay dividends to noncontrolling members of the entities that own One EarthEarth’s and NuGen.NuGen’s ethanol plants. During fiscal year 2017,2020, we received approximately $0.9$0.1 million in capital contributions from the minority investor in the refined coal entity.business which is now classified as discontinued operations.

Based on our forecasts, which are primarily based on estimates of plant production, prices of ethanol, corn, distillers grains, non-food grade corn oil and natural gas as well as other assumptions, management believes that cash flow from operating activities together with working capital will be sufficient to meet One Earth’s and NuGen’s respective liquidity needs. However, if a material adverse change in the financial position of One Earth or NuGen should occur, or if actual sales or expenses are substantially different than what has been forecasted (because of the COVID-19 pandemic or other factors), One Earth’s and NuGen’s liquidity, and ability to fund future operating and capital requirements could be negatively impacted.

We expect to fund future operating losses at our refined coal facility with cash at the parent company level.

Approximately 4.9%2.8% of our net assets are restricted pursuant to the terms of various loan agreements of our equity method investmentinvestee as of January 31, 2019.2022. None of our consolidated subsidiaries or the parent company has restricted net assets at January 31, 2019.2022.

Off Balance Sheet Arrangements

None.

Tabular Disclosure of Contractual Obligations and Commitments

In the ordinary course of business, we enter into agreements under which we are legally obligated to make future cash payments. These agreements include obligations related to purchasing inventory and leasing rail cars. The following table summarizes by category expectedAggregate minimum lease payments under the operating lease agreements for future cash outflows associated with contractual obligations in effect, atfiscal years as of January 31, 2019 (amounts2022 totaled $11.7 million, with $5.0 million payable in thousands):the next twelve months. Refer to Note 7 – Leases included in the notes to consolidated financial statements for more information. As of January 31, 2022, we had contracted future purchases of grain, natural gas, natural gas pipeline and other contracts valued at approximately $107.0 million, with $103.1 payable in the next twelve months. Refer to Note 11 – Commitments included in the notes to consolidated financial statements for more information.

Seasonality and Quarterly Fluctuations

Our business is directly affected by the supply and demand for ethanol. The demand for ethanol typically increases during the spring and summer months from vacation travel and during holiday travel.

Impact of Inflation

The impact of inflation has not been material to our results of operations for the past three fiscal years.

Critical Accounting Policies

We believe the application of the following accounting policies, which are important to our financial position and results of operations, require significant assumptions, judgments and estimates on the part of management. We base our assumptions, judgments, and estimates on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented in accordance with generally accepted accounting principles (GAAP). However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Further, if different assumptions, judgments and estimates had been used, the results could have been different and such differences could be material. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1 to the Consolidated Financial Statements.

Management believes that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Revenue Recognition – For ethanol and by-products segment sales, weWe recognize sales of ethanol, distillers grains and non-food grade corn oil 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 used to transport the products. For refined coal segment sales, we recognize sales

Impairment of refined coal when obligations underLong-Lived Assets –We review our long-lived assets, consisting of property and equipment, equity method investments and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate the termcarrying amount of the contract with its customer are satisfied;asset may not be recoverable. We assess long-lived assets for impairment by first determining the forecasted, undiscounted cash flows the asset group is expected to generate. If this occurs when controltotal is less than the carrying value of the product transfers toasset, we will then determine the customer, generally upon the refined coal leaving the plant. Refined coal sales are recorded net of the cost of coal as we purchase the coal feedstock from our customer to which we sell refined coal.

Financial Instruments – Certain of the forward grain purchase and ethanol, distillers grains and non-food grade corn oil sales contracts are accounted for under the “normal purchases and normal sales” scope exemption of ASC 815, “Derivatives and Hedging” (“ASC 815”) because these arrangements are for purchases of grain that will be delivered in quantities expected to be used by us and sales of ethanol, distillers grains and non-food grade corn oil that will be produced in quantities expected to be sold by us over a reasonable period of time in the normal course of business. During fiscal years 2018, 2017 and 2016, there were no material settlements of forward contracts that were recorded at fair value.

We use derivative financial instruments (exchange-traded futures contracts) to manage a portion of the risk associated with changes in commodity prices, primarily related to corn. We monitor and manage this exposure as part of our overall risk management policy. As such, we seek to reduce the potentially adverse effects that the volatility of these markets may have on our operating results. We may take hedging positions in these commodities as one way to mitigate risk. While we attempt to link our hedging activities to purchase and sales activities, there are situations in which these hedging activities can themselves result in losses. We do not hold or issue derivative financial instruments for trading or speculative purposes. The changes in fair value of these derivative financial instruments arethe asset group. An impairment loss would be recognized in current period earningsthe amount by which the carrying amount of the asset exceeded the fair value of the asset. Significant management judgement is required to determine the fair value of long-lived assets, which includes discounted cash flows. Such estimates could be significantly affected by future changes in market conditions. We recorded no impairment charges in fiscal years 2021, 2020, and 2019. During fiscal year 2020, we concluded the impact of the COVID-19 pandemic on our industry and our operating results was an indicator that impairment may exist related to certain of our long-lived assets. As a result, we performed a recoverability test for the One Earth and NuGen asset groups (the lowest level at which

related cash flows can be identified) and determined that there was no impairment as we do not use hedge accounting.the gross undiscounted future cash flows substantially exceeded the respective carrying values.

Income Taxes – Income taxes are recorded based on the current year amounts payable or refundable, as well as the consequences of events that give rise to deferred tax assets and liabilities based on differences in how those events are treated for tax purposes, net of valuation allowances. We base our estimate of deferred tax assets and liabilities on current tax laws and rates and other expectations about future outcomes. Changes in existing regulatory tax laws and rates and future business results may affect the amount of deferred tax liabilities or the valuation of deferred tax assets over time. We have established valuation allowances for certain state net operating loss carryforwards. We determinedassessed all available positive and negative evidence to determine whether we expect sufficient future taxable income will be generated to allow for the realization of existing federal deferred tax assets. We believe there is sufficient objectively verifiable income for management to conclude that it is more likely than not that wethe Company will be able to generate sufficient taxable income in future years to allow for the full utilization of the otherutilize available federal deferred tax assets other than those reserved. In determining the need for a valuation allowance, we have projected that our ethanol plants will generate future taxable income. We are projecting that the future operationsprior to their expiration. However, realization of One Earth, NuGen and Big River will be profitable. As we earn federal incomethese deferred tax credits (pursuant to Internal Revenue Code Section 45) based on the amount of refined coal produced and sold, variations in refined coal production and related sales will result in changesassets is not certain. Changes in our future effective incomecurrent estimates for factors such as unanticipated market conditions and legislative developments could have a material effect on our ability to utilize deferred tax rate.assets.

New Accounting Pronouncements

For information related to recent accounting pronouncements,see Note 1 of the Notes to the Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to the impact of market fluctuations associated with commodity prices as discussed below.

Commodity Price Risk

We manage a portion of our risk with respect to the volatility of commodity prices inherent in the ethanol industry by using forward purchase and sale contracts. At January 31, 2019,2022, One Earth and NuGen combined havehad purchase commitments for approximately 13.019.3 million bushels of corn, the principal raw material for their ethanol plants. At January 31, 2022, One Earth and NuGen expect to take deliverycombined had purchase commitments for approximately 1.8 million MmBtu of a majority of the corn by June 2019.natural gas. At January 31, 2022, One Earth and NuGen havehad combined sales commitments for approximately 32.347.7 million gallons of ethanol, 88,00097,000 tons of distillers grains and 18.214.5 million pounds of non-food grade corn oil. One Earth and NuGen expect to deliver a majority of the ethanol, distillers grains and non-food grade corn oil through March 2019. Our exposureexposures to market risk, which includesinclude the impact of our risk management activities, isare based on the estimated effect on pre-tax income starting on January 31, 2019,2022, are as follows (amounts in thousands):

Item 8. Financial Statements and Supplementary Data

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands)

See notes to consolidated financial statements.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in Thousands, Except Per Share Amounts)