UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~October~~July 31, ~~2020~~2021
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _________ to _________

Commission File Number 001-09097

REX AMERICAN RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

	Delaware	31-1095548
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
	~~incorporation or organization)~~	~~Identification Number)~~

	7720 Paragon Road, Dayton, Ohio	~~45459~~
	(Address of principal executive offices)	45459 (Zip Code)

(937) 276-3931

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	REX	New York Stock Exchange

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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 definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☒
Non-accelerated filer ☐ (Do not check if a smaller reporting company)		Smaller reporting company ☐
		Emerging growth 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. ☐

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

Yes ☐ No ☒

At the close of business on ~~December 3, 2020~~September 2, 2021 the registrant had ~~5,992,002~~5,970,938 shares of Common Stock, par value $.01 per share, outstanding.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

INDEX

		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets	3
	Consolidated Condensed Statements of Operations	4
	Consolidated Condensed Statements of Equity	5
	Consolidated Condensed Statements of Cash Flows	7
	Notes to Consolidated Condensed Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2324

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3837

Item 4.	Controls and Procedures	3837

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	3938

Item 1A.	Risk Factors	3938

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3938

Item 3.	Defaults upon Senior Securities	3938

Item 4.	Mine Safety Disclosures	3938

Item 5.	Other Information	3938

Item 6.	Exhibits	4038

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

Unaudited

(In Thousands)	October 31, 2020		January 31, 2020		July 31, 2021		January 31, 2021
Assets:
Current assets:
Cash and cash equivalents	$	173,075	$	179,658	$	154,312	$	144,501
Short-term investments		29,216		26,073		33,282		36,194
Restricted cash		884		1,113		6,758		1,657
Accounts receivable		12,496		12,969		29,521		19,713
Inventory		21,616		35,634		41,759		37,880
Refundable income taxes		5,947		6,029		6,892		6,020
Prepaid expenses and other		9,771		9,659		12,175		12,785
Total current assets		253,005		271,135		284,699		258,750
Property and equipment, net		154,401		163,327		145,078		153,186
Operating lease right-of-use assets		14,054		16,173		13,211		12,678
Deferred taxes		22,297		17,061
Other assets		1,278		342
Deferred taxes and other assets						30,649		25,275
Equity method investment		30,126		32,464		31,870		29,456
Total assets	$	475,161	$	500,502	$	505,507	$	479,345

Liabilities and equity:
Current liabilities:
Accounts payable, trade (includes $777 and $686 with related parties at October 31, 2020 and January 31, 2020, respectively)	$	15,588	$	18,900
Accounts payable, trade (includes $2.5 million and $0.7 million with related parties at July 31, 2021 and January 31, 2021, respectively)					$	22,041	$	16,907
Current operating lease liabilities		5,105		4,935		5,380		4,875
Accrued expenses and other current liabilities (includes $186 and $474 with related parties at October 31, 2020 and January 31, 2020, respectively)		6,049		7,764
Accrued expenses and other current liabilities (includes $0.1 million with related parties at July 31, 2021 and January 31, 2021)						11,274		8,955
Total current liabilities		26,742		31,599		38,695		30,737
Long-term liabilities:
Deferred taxes		4,138		4,334		4,030		3,713
Long-term operating lease liabilities		8,548		10,688		7,534		7,439
Other long-term liabilities		282		275		1,951		273
Total long-term liabilities		12,968		15,297		13,515		11,425
Equity:
REX shareholders’ equity:
Common stock		299		299		299		299
Paid-in capital		149,077		148,789		149,263		149,110
Retained earnings		586,443		586,985		605,646		589,986
Treasury stock		(353,910)		(335,066)		(355,936)		(354,612)
Total REX shareholders’ equity		381,909		401,007		399,272		384,783
Noncontrolling interests		53,542		52,599		54,025		52,400
Total equity		435,451		453,606		453,297		437,183
Total liabilities and equity	$	475,161	$	500,502	$	505,507	$	479,345

The accompanying notes are an integral part of these unaudited consolidated condensed financial ~~statements~~.statements.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Operations

Unaudited

(In Thousands, Except Per Share Amounts)	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
	2020		2019		2020		2019		2021		2020		2021		2020

Net sales and revenue	$	124,251	$	86,671	$	246,828	$	297,114	$	195,843	$	39,327	$	359,947	$	122,577
Cost of sales (includes $16,861 and $58,536 with related parties for the quarters ended October 31, 2020 and 2019, respectively, and $34,021 and $148,743 with related parties for the nine months ended October 31, 2020 and 2019, respectively		106,572		88,429		239,810		291,222
Cost of sales (includes $20,650 and $4,887 with related parties for the quarters ended July 31, 2021 and 2020, respectively, and $37,383 and $17,159 with related parties for the six months ended July 31, 2021 and 2020, respectively)										184,769		40,658		331,071		133,238

Gross profit (loss)		17,679		(1,758)		7,018		5,892		11,074		(1,331)		28,876		(10,661)
Selling, general and administrative expenses (includes $(15) and $(242) with related parties for the quarters ended October 31, 2020 and 2019, respectively, and $(160) and $(577) with related parties for the nine months ended October 31, 2020 and 2019, respectively)		(4,257)		(4,133)		(13,300)		(13,629)
Selling, general and administrative expenses (includes $154 and $152 with related parties for the quarters ended July 31, 2021 and 2020, respectively, and $191 and $(145) with related parties for the six months ended July 31, 2021 and 2020, respectively)										(6,582)		(4,438)		(16,570)		(9,043)
Equity in income (loss) of unconsolidated affiliates		1,152		(15)		168		350		1,844		(507)		2,414		(984)
Interest and other income, (net)		537		1,002		1,403		3,381
Interest and other income, net										39		197		82		866

Income (loss) before income taxes		15,111		(4,904)		(4,711)		(4,006)		6,375		(6,079)		14,802		(19,822)
(Provision) benefit for income taxes		(4,052)		3,231		5,307		9,401
Benefit for income taxes										3,677		4,046		3,648		9,359

Net income (loss)		11,059		(1,673)		596		5,395		10,052		(2,033)		18,450		(10,463)
Net income attributable to noncontrolling interests		(2,218)		(379)		(1,138)		(2,370)
Net (income) loss attributable to noncontrolling interests										(2,176)		285		(2,790)		1,080

Net income (loss) attributable to REX common shareholders	$	8,841	$	(2,052)	$	(542)	$	3,025	$	7,876	$	(1,748)	$	15,660	$	(9,383)

Weighted average shares outstanding – basic and diluted		6,143		6,319		6,221		6,318		6,011		6,216		6,010		6,261

Basic and diluted net income (loss) per share attributable to REX common shareholders	$	1.44	$	(0.32)	$	(0.09)	$	0.48	$	1.31	$	(0.28)	$	2.61	$	(1.50)

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Equity

For the Three and ~~Nine~~Six Months Ended ~~October~~July 31, ~~2020~~2021 and ~~2019~~2020

Unaudited

(In Thousands)

	REX Shareholders																REX Shareholders

	Common Shares Issued				Treasury				Paid-in		Retained		Noncontrolling		Total		Common Shares Issued				Treasury				Paid-in		Retained		Noncontrolling		Total
	Shares		Amount		Shares		Amount		Capital		Earnings		Interests		Equity		Shares		Amount		Shares		Amount		Capital		Earnings		Interests		Equity

Balance at July 31, 2020		29,853	$	299		23,655	$	(340,591)	$	149,044	$	577,602	$	51,385	$	437,739
Balance at January 31, 2021																		29,853	$	299		23,861	$	(354,612)	$	149,110	$	589,986	$	52,400	$	437,183

Net income																												7,784		614		8,398

Noncontrolling interests distribution and other																														(75)		(75)

Capital contributions																														68		68

Issuance of equity awards and stock based compensation expense																		-		-		-		8		34		-		-		42

Balance at April 30, 2021																		29,853		299		23,861		(354,604)		149,144		597,770		53,007		445,616

Net income												8,841		2,218		11,059												7,876		2,176		10,052

Treasury stock acquired						197		(13,328)								(13,328)						17		(1,356)								(1,356)

Noncontrolling interests distribution and other														(124)		(124)														(1,229)		(1,229)

Capital contributions														63		63														71		71

Stock based compensation expense		-		-		-		9		33		-		-		42

Balance at October 31, 2020		29,853	$	299		23,852	$	(353,910)	$	149,077	$	586,443	$	53,542	$	435,451

Balance at January 31, 2020		29,853	$	299		23,561	$	(335,066)	$	148,789	$	586,985	$	52,599	$	453,606

Net (loss) income												(542)		1,138		596

Treasury stock acquired						306		(18,918)								(18,918)

Noncontrolling interests distribution and other														(283)		(283)

Capital contributions														88		88

Issuance of equity awards and stock based compensation expense		-		-		(15)		74		288		-		-		362		-		-		(12)		24		119		-		-		143

Balance at October 31, 2020		29,853	$	299		23,852	$	(353,910)	$	149,077	$	586,443	$	53,542	$	435,451
Balance at July 31, 2021																		29,853	$	299		23,866	$	(355,936)	$	149,263	$	605,646	$	54,025	$	453,297

Continued on the following page

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Equity

Unaudited

(In Thousands)

Continued from the previous page

REX Shareholders

Common Shares
Issued Treasury Paid-in Retained Noncontrolling Total
Shares Amount Shares Amount Capital Earnings Interests Equity

Balance at July 31, 2019 29,853 $ 299 23,561 $ (335,080) $ 148,724 $ 584,635 $ 51,912 $ 450,490

Net (loss) income (2,052) 379 (1,673)

Capital contributions 73 73

Issuance of equity awards and stock based compensation expense - - - 7 32 - - 39

Balance at October 31, 2019 29,853 $ 299 23,561 $ (335,073) $ 148,756 $ 582,583 $ 52,364 $ 448,929

Balance at January 31, 2019 29,853 $ 299 23,580 $ (335,193) $ 148,273 $ 579,558 $ 52,334 $ 445,271

Net income 3,025 2,370 5,395

Noncontrolling interests distribution and other (2,598) (2,598)

Capital contributions 258 258

Issuance of equity awards and stock based compensation expense - - (19) 120 483 - - 603

Balance at October 31, 2019 29,853 $ 299 23,561 $ (335,073) $ 148,756 $ 582,583 $ 52,364 $ 448,929

	REX Shareholders

	Common Shares Issued				Treasury				Paid-in		Retained		Noncontrolling		Total
	Shares		Amount		Shares		Amount		Capital		Earnings		Interests		Equity

Balance at January 31, 2020		29,853	$	299		23,561	$	(335,066)	$	148,789	$	586,985	$	52,599	$	453,606

Net loss												(7,635)		(795)		(8,430)

Treasury stock acquired						78		(3,923)								(3,923)

Noncontrolling interests distribution and other														(35)		(35)

Capital contributions														10		10

Stock based compensation expense		-		-		-		7		32		-		-		39

Balance at April 30, 2020		29,853		299		23,639		(338,982)		148,821		579,350		51,779		441,267

Net loss												(1,748)		(285)		(2,033)

Treasury stock acquired						31		(1,667)								(1,667)

Noncontrolling interests distribution and other														(124)		(124)

Capital contributions														15		15

Issuance of equity awards and stock based compensation expense		-		-		(15)		58		223		-		-		281

Balance at July 31, 2020		29,853	$	299		23,655	$	(340,591)	$	149,044	$	577,602	$	51,385	$	437,739

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows

Unaudited

(In Thousands)	Nine Months Ended October 31,				Six Months Ended July 31,
	2020		2019		2021		2020
Cash flows from operating activities:
Net income including noncontrolling interests	$	596	$	5,395
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Net income (loss) including noncontrolling interests					$	18,450	$	(10,463)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		15,697		17,682		10,451		10,491
Amortization of operating lease right-of-use assets		3,982		4,648		2,734		2,691
Income from equity method investments		(168)		(350)
(Income) loss from equity method investments						(2,414)		984
Dividends received from equity method investee		2,506		1,003		-		2,005
Interest income from investments		(200)		(25)		(27)		(179)
Deferred income tax		(5,431)		(9,828)		(4,741)		(4,784)
Stock based compensation expense		122		215		567		80
Gain on sale of property and equipment – net		(58)		-		(3)		(22)
Changes in assets and liabilities:
Accounts receivable		473		(5,013)		(9,808)		3,225
Inventories		14,018		(12,561)		(3,879)		5,251
Refundable income taxes		82		473		(872)		(4,591)
Other assets		(517)		(583)		293		(481)
Accounts payable, trade		(4,302)		5,618		5,457		(10,301)
Other liabilities		(5,301)		(9,010)		949		(2,940)
Net cash provided by (used in) operating activities		21,499		(2,336)		17,157		(9,034)
Cash flows from investing activities:
Capital expenditures		(6,610)		(2,643)		(2,693)		(5,692)
Purchase of short-term investments		(68,225)		-		(49,281)		(45,450)
Sale of short-term investments		65,282		15,000		52,220		39,046
Proceeds from sale of real estate and property and equipment						30		-
Other		(474)		369		-		(259)
Net cash (used in) provided by investing activities		(10,027)		12,726
Net cash provided by (used in) investing activities						276		(12,355)
Cash flows from financing activities:
Treasury stock acquired		(18,089)		-		(1,356)		(5,590)
Payments to noncontrolling interests holders		(283)		(2,598)		(1,304)		(157)
Capital contributions from minority investor		88		258		139		23
Net cash used in financing activities		(18,284)		(2,340)		(2,521)		(5,724)

Net (decrease) increase in cash, cash equivalents and restricted cash		(6,812)		8,050
Net increase (decrease) in cash, cash equivalents and restricted cash						14,912		(27,113)
Cash, cash equivalents and restricted cash, beginning of period		180,771		188,812		146,158		180,771
Cash, cash equivalents and restricted cash, end of period	$	173,959	$	196,862	$	161,070	$	153,658

Non cash investing activities – Accrued capital expenditures	$	198	$	272	$	67	$	22
Non cash financing activities – Stock awards accrued	$	-	$	99	$	482	$	-
Non cash financing activities – Stock awards issued	$	240	$	487	$	100	$	240
Initial right-of-use assets and liabilities recorded upon adoption of ASC 842	$	-	$	20,918
Right-of-use assets acquired and liabilities incurred upon lease execution	$	1,863	$	432	$	3,267	$	1,863
Reconciliation of total cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	173,075	$	196,339	$	154,312	$	152,708
Restricted cash		884		523		6,758		950
Total cash, cash equivalents and restricted cash	$	173,959	$	196,862	$	161,070	$	153,658

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

REX AMERICAN RESOURCES CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

~~October~~
July 31, ~~2020~~2021

Note 1. Consolidated Condensed Financial Statements

References to the Company – References to “REX” or the “Company” in the consolidated condensed financial statements and in these notes to the consolidated condensed financial statements refer to REX American Resources Corporation, a Delaware corporation, and its majority and wholly owned subsidiaries.

The consolidated condensed financial statements included in this report have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and include, in the opinion of management, all adjustments necessary to state fairly the information set forth therein. Any such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Financial information as of January 31, ~~2020~~2021 included in these financial statements has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended January 31, ~~2020~~2021 (fiscal year ~~2019)~~2020). It is suggested that these unaudited consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, ~~2020.~~2021. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the year.

Basis of Consolidation – The consolidated condensed financial statements in this report include the operating results and financial position of the Company. All intercompany balances and transactions have been eliminated. The Company consolidates the results of its 4 majority owned subsidiaries. The Company includes the results of operations of One Earth Energy, LLC (“One Earth”) in its Consolidated Condensed Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end of December 31.

Nature of Operations ~~–The~~– The Company has 2 reportable segments: i) ethanol and by-products; and ii) refined coal. Within the ethanol and by-products segment, the Company has equity investments in 3 ethanol limited liability companies, 2 of which are majority ownership interests. Within the refined coal segment, the Company has a majority equity interest in 1 refined coal limited liability company.

Note 2. Accounting Policies

The interim consolidated condensed financial statements have been prepared in accordance with the accounting policies described in the notes to the consolidated financial statements included in the Company’s fiscal year ~~2019~~2020 Annual Report on Form 10-K. While management believes that the procedures followed in the preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist or calculations that will be accomplished at fiscal year-end. Examples of such estimates include accrued liabilities, such as management bonuses, and

the provision for income taxes. Any adjustments pursuant to such estimates during the quarter were of a normal recurring nature. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or less.

Revenue Recognition

For ethanol and by-products segment sales, the Company recognizes 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. ~~Net sales and revenue also includes net gains or losses from derivative financial instruments related to products sold.~~

For refined coal segment sales, the Company recognizes sales of refined coal when obligations under the term of the contract with its customer are satisfied; this occurs when title and control of the product transfers to its customer, generally upon the coal leaving the refined coal plant. Refined coal sales are recorded net of the cost of coal as the Company purchases the coal feedstock from the customer to which the processed refined coal is sold.

Cost of Sales

Cost of sales includes depreciation, costs of raw materials, inbound freight charges, purchasing and receiving costs, inspection costs, other distribution expenses, warehousing costs, plant management, certain compensations costs and general facility overhead ~~charges and net gains or losses from derivative financial instruments related to commodities purchased.~~charges.

Selling, General and Administrative (“SG&A”) Expenses

The Company includes non-production related costs such as professional fees, outbound freight charges, selling charges and certain payroll in SG&A expenses. Outbound freight charges were approximately $1,561,000 and $839,000 in the second quarter of fiscal years 2021 and 2020, respectively and approximately $7,156,000 and $2,162,000 in the first six months of fiscal years 2021 and 2020, respectively.

Financial Instruments

Certain of the forward grain purchase and ethanol, distillers grains and non-food grade corn oil sale contracts are accounted for under the “normal purchases and normal sales” scope exemption of Accounting Standards Codification (“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 the Company and sales of ethanol, distillers grains and non-food grade corn oil quantities expected to be produced by the Company over a reasonable period of time in the normal course of business.

The Company uses derivative financial instruments (exchange-traded futures ~~contracts and swaps)~~contracts) to manage a portion of the risk associated with changes in commodity prices, primarily related to ~~ethanol, corn and distillers grains.~~corn. The Company monitors and manages this exposure as part of its overall risk management policy. As such, the Company seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating

results. The Company may take hedging positions in these commodities as one way to mitigate risk. While the Company attempts to link its hedging activities to purchase and sales activities, there are situations in which these hedging activities can themselves result in losses. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting.

Income Taxes

The Company determined that small changes in estimated “ordinary” income ~~would~~could result in significant changes in the estimated annual effective tax rate. Thus, the Company used a discrete effective tax rate method to calculate the provision or benefit for income taxes for the three and ~~nine~~six months ended ~~October~~July 31, ~~2020~~2021 and ~~2019.~~2020.

The Company provides for deferred tax liabilities and assets for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. The Company provides for a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company paid income taxes of $1.9 million and received 0 refunds of income taxes during the six months ended July 31, 2021. The Company paid income taxes of approximately ~~$0.5~~$0.3 million and received refunds of income taxes of approximately ~~$0.7~~$0.3 million during the ~~nine~~six months ended ~~October~~July 31, 2020. ~~The Company paid no income taxes nor received refunds of income taxes during the nine months ended October 31, 2019.~~

As of ~~October~~July 31, ~~2020,~~2021, and January 31, ~~2020,~~2021, total unrecognized tax benefits were approximately ~~$7,298,000~~$8,655,000 and ~~$7,353,000,~~$8,380,000, respectively. Accrued penalties and interest were ~~insignificant~~approximately $30,000 and approximately $20,000 at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020,~~2021, respectively. If the Company were to prevail on all unrecognized tax benefits recorded, the provision for income taxes would be reduced by approximately ~~$7.3 million at October 31, 2020.~~$8.6 million. In addition, the impact of penalties and interest would also benefit the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. On a quarterly basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest.

Inventories

Inventories are carried at the lower of cost or net realizable value on a first-in, first-out basis. Inventory includes direct production costs and certain overhead costs such as depreciation, property taxes and utilities associated with producing ethanol and related ~~by-products.~~by-products and refined coal. Inventory is written down for instances when cost exceeds estimated net realizable value; such write-downs are based primarily upon commodity prices as the market value of inventory is often dependent upon changes in commodity prices. ~~There was no inventory write-down at October 31, 2020.~~ The Company recorded approximately $1.3 million and approximately $1.0 million of inventory write-downs in cost of sales at July 31, 2021 and January 31, ~~2020.~~2021, respectively. Fluctuations in the write-down of inventory generally relate to the levels and composition of such inventory and changes in

commodity prices at a given point in time. The components of inventory are as follows as of the dates presented (amounts in thousands):

	October 31, 2020		January 31, 2020		July 31, 2021		January 31, 2021

Ethanol and other finished goods	$	7,013	$	10,864	$	15,986	$	18,346
Work in process		3,010		3,258		6,451		4,374
Grain and other raw materials		11,593		21,512		19,322		15,160
Total	$	21,616	$	35,634	$	41,759	$	37,880

Property and Equipment

Property and equipment is recorded at cost or the fair value on the date of acquisition (for property and equipment acquired in a business combination). Depreciation is computed using the straight-line method. Estimated useful lives are 5 to 40 years for buildings and improvements, and 2 to 20 years for fixtures and equipment.

In accordance with ASC 360-10 “Impairment or Disposal of Long-Lived Assets”, the carrying value of long-lived assets is assessed for recoverability by management when changes in circumstances indicate that the carrying amount may not be recoverable. The Company did not identify any indicators of impairment during the first six months of fiscal year 2021, thus there were no impairment charges in the first six months of fiscal year 2021. During fiscal year 2020, the Company concluded that the impact of the ~~COVID-19~~coronavirus (” COVID-19”) pandemic on the ethanol industry and ~~other factors are~~the Company’s operating results was an indicator that impairment may exist related to certain of its long-lived assets. As a result, the Company performed ~~an impairment analysis~~a recoverability test and determined that there was no impairment. Although it is not possible to reliably estimate the duration of the pandemic and its financial impact, a prolonged significant downturn in the economy could negatively impact the Company’s results of operations and significantly reduce its expectationimpairment for ~~future sales, profits and cash flows. Such a reduction in expected future performance could result in the impairment of long-lived assets in subsequent periods.~~fiscal year 2020. There were no impairment charges in the first ~~nine~~six months of fiscal ~~years 2020 or 2019.~~year 2020.

The Company tests for recoverability of an asset group by comparing its carrying amount to its estimated undiscounted future cash flows. If the carrying amount exceeds its estimated undiscounted future cash flows, the Company recognizes an impairment charge for the amount by which the asset group’s carrying amount exceeds its fair value, if any.

Investments

The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The Company accounts for investments in a limited liability company in which it has a less than 20% ownership interest using the equity method of accounting when the factors discussed in ASC 323, “Investments-Equity Method and Joint Ventures” are met. The excess of the carrying value over the underlying equity in the net assets of equity method investees is allocated to specific assets and liabilities. Investments in businesses that the Company does not control but for which it has the ability to exercise significant influence over operating and financial matters are accounted for using the equity method. The Company accounts for its investment in Big River Resources, LLC (“Big River”) using the equity method of accounting and includes the results on a delayed basis of one month as Big River has a fiscal year end of December 31.

The Company periodically evaluates its investments for impairment due to declines in market value considered to be other than temporary. Such impairment evaluations include general economic and company-specific evaluations. If the Company determines that a decline in market value is other than temporary, then a charge to earnings is recorded in the Consolidated Condensed Statements of Operations and a new cost basis in the investment is established.

Short-term investments are considered held to maturity, and therefore are carried at amortized historical cost.

Comprehensive Income

The Company has no components of other comprehensive income, and therefore, comprehensive income equals net income.

Accounting Changes and Recently Issued Accounting Standards

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The Company ~~will be required to adopt~~adopted this update effective February 1, 2021. The ~~Company has not determined the effect~~adoption of this update ~~on its~~did not impact the consolidated financial statements.

Note 3. Net Sales and Revenue

The Company recognizes sales of products when obligations under the terms of the respective contracts with customers are satisfied. This occurs with the transfer of control of products, generally upon shipment from the ethanol plant or upon loading of the rail car used to transport the products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from net sales and revenue.

The majority of the Company’s sales have payment terms ranging from 5 to 10 days after transfer of control. The Company has determined that sales contracts do not generally include a significant financing component. The Company has not historically, and does not intend to, enter into sales contracts in which payment is due from a customer prior to transferring product to the customer. Thus, the Company does not record unearned revenue.

See Note 14 for disaggregation of net sales and revenue by operating segment and by product.

Note 4. Leases

At ~~October~~July 31, ~~2020,~~2021, the Company has lease agreements, as lessee, for railcars. All of the leases are accounted for as operating leases. The lease agreements do not contain a specified implicit interest rate; therefore, the Company’s estimated incremental borrowing rate was used to determine the present value of future minimum lease payments. The exercise of any lease renewal is at the Company’s sole discretion. The lease term for all of the Company’s leases includes the noncancelable period of the lease and any

periods covered by renewal options that the Company is reasonably certain to exercise. Certain leases include rent escalations pre-set in the agreements, which are factored into the lease payment stream. The components of lease expense, classified as SG&A expenses on the Consolidated Condensed Statement of Operations are as follows:

	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended				Six Months Ended
	2020		2019		2020		2019		July 31, 2021		July 31, 2020		July 31, 2021		July 31, 2020

Operating lease expense	$	1,545	$	1,557	$	4,779	$	4,867	$	1,565	$	1,548	$	3,115	$	3,234
Variable lease expense		79		139		417		491		520		207		564		338
Total lease expense	$	1,624	$	1,696	$	5,196	$	5,358	$	2,085	$	1,755	$	3,679	$	3,572

The following table is a summary of future minimum rentals on such leases at ~~October~~July 31, ~~2020~~2021 (amounts in thousands):

Years Ended January 31,		Minimum Rentals		Minimum Rentals

Remainder of 2021		$	1,516
2022			5,397
Remainder of 2022				$	3,015
2023			3,690		4,836
2024			2,524		3,670
2025			1,648		2,221
Thereafter			49
2026					49
Total			14,824		13,791
Less: present value discount	Less: present value discount		1,171		877
Operating lease liabilities		$	13,653	$	12,914

At ~~October~~July 31, ~~2020,~~2021, the weighted average remaining lease term is ~~3.1~~2.7 years, and the weighted average discount rate is ~~5.27%~~4.88% for the above leases.

The following table is a summary of future minimum rentals on such leases at January 31, ~~2020~~2021 (amounts in thousands):

Years Ended January 31,
Minimum
Rentals

2021 $ 5,668
2022 4,958
2023 3,251
2024 2,085
2025 1,228
Thereafter 29
Total 17,219
Less: present value discount 1,596
Operating lease liabilities $ 15,623

Years Ended January 31,	Minimum Rentals

2022	$	5,397
2023		3,690
2024		2,524
2025		1,648
2026		49
Total		13,308
Less: present value discount		994
Operating lease liabilities	$	12,314

At January 31, ~~2020,~~2021, the weighted average remaining lease term was ~~3.5~~3.0 years, and the weighted average discount rate was ~~5.46%~~5.26% for the above leases.

Note 5. Fair Value

The Company applies ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), which provides a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company determines the fair market values of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values which are provided below. The Company carries certain cash equivalents, investments and derivative instruments at fair value.

The fair values of derivative assets and liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple market inputs including interest rates, prices and indices to generate pricing and volatility factors, which are used to value the position. The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. Estimation risk is greater for derivative asset and liability positions that are either option-based or have longer maturity dates where observable market inputs are less readily available or are unobservable, in which case interest rate, price or index scenarios are extrapolated in order to determine the fair value. The fair values of derivative assets and liabilities include adjustments for market liquidity, counterparty credit quality, the Company’s own credit standing and other specific factors, where appropriate.

To ensure the prudent application of estimates and management judgment in determining the fair value of derivative assets and liabilities, investments and property and equipment, various processes and controls have been adopted, which include: (i) model validation that requires a review and approval for pricing, financial statement fair value determination and risk quantification; and (ii) periodic review and substantiation of profit and loss reporting for all derivative instruments. Financial assets and liabilities measured at fair value on a recurring basis at ~~October~~July 31, ~~2020~~2021 are summarized below (amounts in thousands):

Level 1 Level 2 Level 3
Fair Value

Investment in cooperative (1) $ - $ - $ 354 $ 354
Forward purchase contracts (2) - 351 - 351
Total assets $ - $ 351 $ 354 $ 705

Commodity futures and swaps liability (3) $ - $ 378 $ - $ 378

	Level 1		Level 2		Level 3		Fair Value

Investment in cooperative (1)	$	-	$	-	$	354	$	354
Commodity futures asset (2)		-		784		-		784
Forward purchase contracts (2)		-		673		-		673
Total assets	$	-	$	1,457	$	354	$	1,811

Commodity futures liability (3)	$	-	$	4,590	$	-	$	4,590

Financial assets and liabilities measured at fair value on a recurring basis at January 31, ~~2020~~2021 are

summarized below (amounts in thousands):

	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value

Investment in cooperative (1)	$	-	$	-	$	341	$	341	$	-	$	-	$	354	$	354
Commodity futures and swaps (2)		-		352		-		352
Forward purchase contracts asset (2)										-		2,144		-		2,144
Total assets	$	-	$	352	$	341	$	693	$	-	$	2,144	$	354	$	2,498

Forward purchase contract liability (3)	$	-	$	230	$	-	$	230
Commodity futures liability (3)									$	-	$	1,794	$	-	$	1,794

(1) The investment in cooperative is included in “Other assets” on the accompanying Consolidated Condensed Balance Sheets.

(2) The forward purchase ~~contract asset~~contracts and ~~the~~ commodity futures ~~and swaps asset~~assets are included in “Prepaid expenses and other current assets” on the accompanying Consolidated Condensed Balance Sheets.

(3) The ~~forward purchase contract liability and the~~ commodity futures ~~and swaps~~ liability ~~are~~is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Condensed Balance Sheets.

The Company determined the fair value of the investment in cooperative by using a discounted cash flow analysis on the expected cash flows. Inputs used in the analysis include the face value of the allocated equity amount, the projected term for repayment based upon a historical trend and a risk adjusted discount rate based on the expected compensation participants would demand because of the uncertainty of the future cash flows. The inherent risk and uncertainty associated with unobservable inputs could have a significant effect on the actual fair value of the investment.

There were 0no assets measured at fair value on a non-recurring basis at ~~October~~July 31, ~~2020~~2021 or January 31, ~~2020.~~2021.

Note 6. Property and Equipment

The components of property and equipment are as follows for the periods presented (amounts in thousands):

	October 31, 2020		January 31, 2020		July 31, 2021		January 31, 2021

Land and improvements	$	26,244	$	21,957	$	27,437	$	27,437
Buildings and improvements		23,643		23,643		23,701		23,701
Machinery, equipment and fixtures		302,367		300,972		306,514		305,640
Construction in progress		746		193		1,173		215
		353,000		346,765		358,825		356,993
Less: accumulated depreciation		(198,599)		(183,438)		(213,747)		(203,807)
Total	$	154,401	$	163,327	$	145,078	$	153,186

Note 7. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities are as follows for the periods presented (amounts in thousands):

	October 31, 2020		January 31, 2020		July 31, 2021		January 31, 2021

Accrued payroll and related items	$	555	$	1,152	$	1,882	$	690
Accrued utility charges		1,650		2,398		2,708		2,515
Accrued transportation related items		1,560		1,500		204		1,560
Accrued real estate taxes		1,348		1,755		1,220		1,778
Commodity futures		378		-		4,590		1,794
Forward purchase contracts		-		230
Accrued income taxes		43		68		51		55
Other		515		661		619		563
Total	$	6,049	$	7,764	$	11,274	$	8,955

Note 8. Derivative Financial Instruments

The Company is exposed to various market risks, including changes in commodity prices (raw materials and finished goods). To manage risks associated with the volatility of these natural business exposures, the Company enters into commodity agreements and forward purchase (corn and natural gas) and sale (ethanol, distillers grains and non-food grade corn oil) contracts. The Company does not purchase or sell derivative financial instruments for trading or speculative purposes. The Company does not purchase or sell derivative financial instruments for which a lack of marketplace quotations would require the use of fair value estimation techniques. The changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting.

The following table provides information about the fair values of the Company’s derivative financial instruments (that are not accounted for under the “normal purchases and normal sales” scope exemption of ASC 815) and the line items on the Consolidated Condensed Balance Sheets in which the fair values are reflected (in thousands):

	Asset Derivatives				Liability Derivatives				Asset Derivatives Fair Value				Liability Derivatives Fair Value
	Fair Value				Fair Value				July 31, 2021		January 31, 2021		July 31, 2021		January 31, 2021
	October 31, 2020		January 31, 2020		October 31, 2020		January 31, 2020

Commodity futures and swaps (1)	$	-	$	352	$	378	$	-
Commodity futures (1)									$	784	$	-	$	4,590	$	1,794
Forward purchase contracts (2)		351		-		-		230		673		2,144		-		-
Total	$	351	$	352	$	378	$	230	$	1,457	$	2,144	$	4,590	$	1,794

(1) Commodity futures and swaps assets are included in prepaid expenses and other current assets. These contracts are short/sell positions for approximately 3.7 million bushels of corn and long/buy positions for approximately 2.2 million bushels of corn at January 31, 2020. Commodity futures and swaps liabilities are included in accrued expenses and other current liabilities. These contracts are short/sell positions for approximately ~~4.6~~8.6 million bushels of corn at July 31, 2021. These contracts are short/sell positions for approximately 6.9 million bushels of corn at January 31, 2021. Commodity futures assets are included in prepaid expenses and other assets. These contracts are

long/buy positions for approximately ~~4.8~~5.8 million bushels of corn ~~and short/sell~~at July 31, 2021. There were 0 long/buy positions ~~for approximately 4.2 million gallons of ethanol~~ at ~~October~~January 31, ~~2020.~~2021.

(2) Forward purchase contracts assets are included in prepaid expenses and other current assets. These contracts are for purchases of approximately ~~5.4~~10.6 million bushels of corn at ~~October~~July 31, ~~2020. Forward purchase contracts liabilities are included in accrued expenses~~2021 and ~~other current liabilities. These contracts are for purchases of approximately 1.6~~6.4 million bushels of corn at January 31, ~~2020.~~2021.

As of ~~October~~July 31, ~~2020,~~2021, and January 31, ~~2020,~~2021, all of the derivative financial instruments held by the Company were subject to enforceable master netting ~~arrangements.~~arrangements with the counterparty. The Company’s accounting policy is to offset positions and amounts owed or owing with the same counterparty. As of ~~October~~July 31, ~~2020,~~2021, and January 31, ~~2020,~~2021, the gross positions of the enforceable master netting agreements are not significantly different from the net positions presented in the table above. Depending on the amount of an unrealized loss on a derivative contract held by the Company, the counterparty may require collateral to secure the Company’s derivative contract position. The Company was required to maintain collateral in the amount of approximately ~~$884,000~~$6,758,000 and approximately ~~$1,113,000~~$1,657,000 to secure the Company’s derivative position at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020,~~2021, respectively.

See Note 5 which contains fair value information related to derivative financial instruments.

~~(Losses) gains~~The Company recognized losses (included in net sales and revenue) on derivative financial instruments of approximately ~~$(26,000)~~$1,638,000 and ~~approximately $248,000~~$298,000 for the ~~third quarters~~second quarter of fiscal years 2021 and 2020, respectively. The Company recognized losses (included in net sales and ~~2019, respectively, were included in cost of sales on the Consolidated Condensed Statements of Operations. (Losses) gains~~revenue) on derivative financial instruments of approximately ~~$(1,785,000)~~$2,764,000 and ~~approximately $1,478,000~~$298,000 for the first ~~nine~~six months of fiscal years 2021 and 2020, ~~and 2019, respectively, were included in cost of sales on the Consolidated Condensed Statements of Operations.~~respectively.

~~Losses~~The Company recognized losses (included in cost of sales) on derivative financial instruments of approximately ~~$777,000~~$6,142,000 and ~~$1,076,000~~approximately $4,613,000 for the ~~third~~second quarter ~~and first nine months, respectively,~~ of fiscal ~~year~~years 2021 and 2020, ~~were included~~respectively. The Company recognized losses (included in ~~net sales~~cost of sales) on derivative financial instruments of approximately $8,036,000 and ~~revenue on~~approximately $1,758,000 for the ~~Consolidated Condensed Statements~~first six months of ~~Operations.~~fiscal years 2021 and 2020, respectively.

Note 9. Investments

The following table summarizes the Company’s equity method investment at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020~~2021 (dollars in thousands):

	Ownership	Carrying Amount			Carrying Amount
Entity	Percentage	October 31, 2020	January 31, 2020	Ownership Percentage	July 31, 2021		January 31, 2021

Big River	10.3%	$30,126	$32,464	10.3%	$	31,870	$	29,456

Undistributed earnings of the Company’s equity method investee totaled approximately ~~$10.1~~$11.8 million and approximately ~~$12.4~~$9.4 million at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020,~~2021, respectively. The Company ~~received~~did not receive any dividends from its equity method investee ~~of approximately $2.5 million and approximately $1.0 million during~~in the first ~~nine~~six months of fiscal ~~years 2020~~year 2021 and ~~2019, respectively.~~received dividends of approximately $2.0 million in the first six months of fiscal year 2020.

Summarized financial information for the Company’s equity method investee is presented in the following table for the periods presented (amounts in thousands):

	Three Months Ended October 31,				Nine Months Ended October 31,				Three Months Ended July 31,				Six Months Ended July 31,
	2020		2019		2020		2019		2021		2020		2021		2020

Net sales and revenue	$	209,397	$	220,387	$	537,155	$	598,187	$	363,383	$	130,126	$	619,799	$	327,758
Gross profit	$	15,419	$	10,269	$	13,041	$	18,864
Gross profit (loss)									$	19,357	$	3,565	$	20,901	$	(2,378)
Income (loss) from continuing operations	$	11,167	$	(149)	$	1,627	$	3,397	$	17,877	$	(4,914)	$	23,412	$	(9,540)
Net income (loss)	$	11,167	$	(149)	$	1,627	$	3,397	$	17,877	$	(4,914)	$	23,412	$	(9,540)

At ~~October~~July 31, ~~2020,~~2021, the Company owned certificates of deposit that had an amortized cost, or carrying value, of approximately ~~$29,216,000.~~$33,282,000. The contractual maturity of these investments was less than one year. The yield to maturity rate was approximately ~~0.2%~~0.1%. Unrealized gains or losses were insignificant.

At January 31, ~~2020,~~2021, the Company owned certificates of deposit that had an amortized cost, or carrying value, of approximately ~~$26,073,000.~~$36,194,000. The contractual maturity of these investments was less than one year. The yield to maturity rate was approximately ~~1.8%~~0.2%. Unrealized gains or losses were insignificant.

Note 10. Employee Benefits

The Company maintains the REX 2015 Incentive Plan, approved by its shareholders, which reserves a total of 550,000 shares of common stock for issuance pursuant to its terms. The plan provides for the granting of shares of stock, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted stock unit awards to eligible employees, non-employee directors and consultants. Since plan inception, the Company has only granted restricted stock awards. The Company measures share-based compensation grants at fair value on the grant date, ~~with no~~

~~adjustments~~adjusted for estimated forfeitures. The Company records noncash compensation expense related to liability and equity awards in its consolidated financial statements over the requisite service period on a straight-line basis. At ~~October~~July 31, ~~2020, 473,830~~2021, 471,027 shares remain available for issuance under the Plan. As a component of their compensation, restricted stock has been granted to directors at the closing market price of REX common stock on the grant date. In addition, one third of executives’ incentive compensation is payable by an award of restricted stock based on the then closing market price of REX common stock on the grant date. The Company’s board of directors has determined that the grant date will be June 15^th, or the next business day if June 15^th is not a business day, for all grants of restricted stock.

At ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020,~~2021, unrecognized compensation cost related to nonvested restricted stock was approximately ~~$272,000~~$155,000 and ~~$220,000,~~$272,000, respectively. The following tables summarize non-vested restricted stock award activity for the periods presented:

Nine Months Ended October 31, 2020

Weighted Weighted
Average Grant Average Remaining
Non-Vested Date Fair Value Vesting Term
Shares (000’s) (in years)

Non-Vested at January 31, 2020 28,576 $ 2,193 2
Granted 6,158 416
Forfeited - -
Vested 15,029 1,211

Non-Vested at October 31, 2020 19,705 $ 1,398 2

							Six Months Ended July 31, 2021

							Non-Vested Shares		Weighted Average Grant Date Fair Value (000’s)		Weighted Average Remaining Vesting Term (in years)

Non-Vested at January 31, 2021								19,705	$	1,398		1
Granted								2,803		275
Forfeited								-		-
Vested								12,447		900

Non-Vested at July 31, 2021								10,061	$	773		2
	Nine Months Ended October 31, 2019
							Six Months Ended July 31, 2020
			Weighted		Weighted
			Average Grant		Average Remaining		Non-Vested Shares		Weighted Average Grant Date Fair Value (000’s)		Weighted Average Remaining Vesting Term (in years)
	Non-Vested		Date Fair Value		Vesting Term
	Shares		(000’s)		(in years)

Non-Vested at January 31, 2019		38,036	$	2,935		2
Non-Vested at January 31, 2020								28,576	$	2,193		2
Granted		9,442		662				6,158		416
Forfeited		-		-				-		-
Vested		18,902		1,404				15,029		1,211

Non-Vested at October 31, 2019		28,576	$	2,193		2
Non-Vested at July 31, 2020								19,705	$	1,398		2

The above tables include ~~14,777~~5,714 and ~~24,219~~14,777 non-vested shares at ~~October~~July 31, ~~2020~~2021 and ~~2019,~~2020, respectively, which are included in the number of weighted average shares outstanding used to determine basic and diluted earnings per share attributable to REX common shareholders. Such shares are treated, for accounting purposes, as being fully vested at the grant date as they were granted to recipients who were retirement eligible at the time of grant.

Note 11. Income Taxes

The Company determined that small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate. Thus, the Company used a discrete effective tax rate method to calculate the provision or benefit for income taxes for the three and ~~nine~~six months ended ~~October~~July 31, ~~2020~~2021 and ~~2019.~~2020.

The Company’s income tax ~~provision~~benefit was approximately ~~26.8%~~$3.7 million and ~~was a benefit of~~ approximately ~~65.9%~~$4.0 million for the three months ended ~~October~~July 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The Company’s income tax benefit was approximately ~~112.7%~~$3.6 million and approximately ~~234.7%~~$9.4 million for the ~~nine~~six months ended ~~October~~July 31, 2021 and 2020, ~~and 2019,~~ respectively. ~~The fluctuation~~We had a higher benefit in the ~~rate results primarily~~prior year periods based upon pre-tax losses for those periods versus pre-tax income in the current periods. The benefit is also largely impacted by the level of tax credits generated from the ~~production tax credits the Company expects to receive associated with its~~ refined coal ~~segment relative to consolidated pre-tax income or loss.~~operation. Through its refined coal operation, the Company earns production tax credits pursuant to IRC Section 45. The credits can be used to reduce future income tax liabilities for up to 20 years. ~~The~~In addition, the Company’s income tax ~~provision~~benefit for the ~~third quarter~~first six months of fiscal year 2020 includes approximately $1.8 million related to ~~reversing previously recognized tax benefits associated with~~ the lengthening of a net operating loss carryback allowed by the CARES ~~Act as~~Act.

The Company assessed all available positive and negative evidence to determine whether it expects sufficient future taxable income will be generated to allow for the realization of existing federal deferred tax assets. For the three year period ended July 31, 2021, the Company ~~no longer~~ has a ~~year~~cumulative pre-tax book loss on a comprehensive basis, including the impact of an operation that has historically produced pre-tax book losses, but after tax net income. The Company expects that this entity will cease operations by November 18, 2021. There is sufficient objectively verifiable income for management to ~~date estimated taxable loss.~~conclude that it is more likely than not that the Company will utilize available federal deferred tax assets prior to their expiration.

The Company files a U.S. federal income tax return and various state income tax returns. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years ended January 31, 2014 and prior. The Company is currently undergoing a federal income tax examination for the years ended January 31, 2015 through January 31, 2020.

On a quarterly and annual basis, the Company accrues for the effects of open uncertain tax positions and the related potential penalties and interest. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, the Company does not expect the change to have a material effect on results of operations or financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, is as follows (amounts in thousands):

	Nine Months Ended October 31,				Six Months Ended July 31,
	2020		2019		2021		2020

Unrecognized tax benefits, beginning of period	$	7,370	$	9,232	$	8,400	$	7,370
Changes for prior years’ tax positions		(57)		(77)		10		(53)
Changes for current year tax positions		-		-		275		-
Unrecognized tax benefits, end of period	$	7,313	$	9,155	$	8,685	$	7,317

Note 12. Commitments and Contingencies

The Company ismay be involved in various legal actions arising in the normal course of ~~business.~~business, from time to time. After taking into consideration legal counsels’ evaluations of any such ~~actions,~~ action(s),

management is of the opinion that their outcome will not have a material adverse effect on the Company’s Consolidated Condensed Financial Statements.

~~As of October 31, 2020,~~ One Earth and NuGen have combined forward purchase contracts for approximately ~~6.2~~10.6 million bushels of corn, the principal raw material for their ethanol plants, and they have combined forward purchase contracts for approximately ~~1,391,000~~639,000 MmBtu ~~(Million British Thermal Units)~~(million british thermal units) of natural gas.

~~As of October 31, 2020,~~ One Earth and NuGen have combined sales commitments for approximately ~~37.6~~31.7 million gallons of ethanol, approximately ~~109,000~~46,000 tons of distillers grains and approximately ~~32.6~~9.6 million pounds of non-food grade corn oil.

~~As of October 31, 2020, the~~The refined coal entity has various agreements (site license, operating agreements, etc.) containing payment terms based upon production of refined coal under which the Company is required to pay various fees. These fees totaled approximately ~~$0.5~~$2.2 million and approximately ~~$0.9~~$1.1 million in the ~~third~~second quarter of fiscal years ~~2020~~2021 and ~~2019,~~2020, respectively. Such fees totaled approximately ~~$1.9~~$3.1 million and approximately ~~$3.6~~$1.4 million for the ~~nine~~six months ended ~~October~~July 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

Note 13. Related-Party Transactions

During the ~~third~~second quarters of fiscal years 2021 and 2020, One Earth and ~~2019, the Company~~NuGen purchased approximately ~~$16.9~~$20.7 million and approximately ~~$58.5~~$4.9 million, respectively, of corn ~~and~~(and other ~~supplies~~supplies) from minority equity investors and board members of ~~One Earth and NuGen.~~those subsidiaries. Such purchases totaled approximately ~~$34.0~~$37.4 million and approximately ~~$148.7~~$17.2 million for the ~~nine~~six months ended ~~October~~July 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The Company had amounts payable to related parties of approximately ~~$0.8~~$2.5 million and approximately $0.7 million at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020,~~2021, respectively.

During each of the ~~third~~second quarters of fiscal years ~~2020~~2021 and ~~2019,~~2020, the Company ~~reduced~~recognized commission expense byof approximately ~~$15,000 and approximately $242,000, respectively,~~$0.2 million, payable to the minority investor in the refined coal entity. During the first ~~nine~~six months of fiscal years 2021 and 2020, ~~and 2019,~~ the ~~Company reduced~~company recognized commission expense byof approximately ~~$160,000~~$0.2 million and income of approximately ~~$577,000,~~$0.1 million, respectively. The commission expense is associated with the refined coal ~~acquisition.~~segment. The Company had accrued liabilities and accounts payable related to the commission expense of approximately ~~$0.2 million and approximately $0.5~~$0.1 million at ~~October~~July 31, ~~2020~~2021 and January 31, ~~2020, respectively.~~2021.

Note 14. Segment Reporting

The Company has 2 reportable segments: i) ethanol and by-products; and ii) refined coal. The Company evaluates the performance of each reportable segment based on ~~segment profit.~~net income attributable to REX common shareholders. Segment profitability measures are determined using the same accounting policies used in the preparations of the consolidated condensed financial statements. The following tables summarize segment and other results and assets (amounts in thousands):

	Three Months Ended				Nine Months Ended
	October 31,				October 31,				Three Months Ended July 31,				Six Months Ended July 31,
	2020		2019		2020		2019		2021		2020		2021		2020
Net sales and revenue:
Ethanol and by-products	$	124,217	$	86,603	$	246,694	$	296,826	$	195,678	$	39,242	$	359,720	$	122,477
Refined coal ¹		34		68		134		288		165		85		227		100
Total net sales and revenue	$	124,251	$	86,671	$	246,828	$	297,114	$	195,843	$	39,327	$	359,947	$	122,577

¹The Company records sales in the refined coal segment net of the cost of coal as the Company purchases the coal feedstock from the customer to which refined coal is sold.

Segment gross profit (loss):
Ethanol and by-products $ 18,929 $ 28 $ 11,259 $ 12,312
Refined coal (1,250) (1,786) (4,241) (6,420)
Total gross profit (loss) $ 17,679 $ (1,758) $ 7,018 $ 5,892

Income (loss) before income taxes:
Ethanol and by-products $ 17,007 $ (2,822) $ 1,397 $ 3,491
Refined coal (1,270) (1,648) (4,235) (6,351)
Corporate and other (626) (434) (1,873) (1,146)
Total income (loss) before income taxes $ 15,111 $ (4,904) $ (4,711) $ (4,006)

(Provision) benefit for income taxes:
Ethanol and by-products $ (5,071) $ 945 $ (17) $ (160)
Refined coal 985 2,181 4,863 9,282
Corporate and other 34 105 461 279
Total (provision) benefit for income taxes $ (4,052) $ 3,231 $ 5,307 $ 9,401

Segment profit (loss) (net of noncontrolling interests):
Ethanol and by-products $ 9,660 $ (2,330) $ 49 $ 684
Refined coal (227) 607 821 3,209
Corporate and other (592) (329) (1,412) (868)
Net income (loss) attributable to REX common shareholders $ 8,841 $ (2,052) $ (542) $ 3,025

Assets:	October 31, 2020		January 31, 2020
					Three Months Ended July 31,				Six Months Ended July 31,
					2021		2020		2021		2020
Segment gross profit (loss):
Ethanol and by-products					$	14,155	$	553	$	33,631	$	(7,670)
Refined coal						(3,081)		(1,884)		(4,755)		(2,991)
Total gross profit (loss)					$	11,074	$	(1,331)	$	28,876	$	(10,661)

Income (loss) before income taxes:
Ethanol and by-products	$	400,180	$	408,746	$	10,732	$	(3,259)	$	21,820	$	(15,610)
Refined coal		3,605		6,101		(3,455)		(2,118)		(5,260)		(2,965)
Corporate and other		71,376		85,655		(902)		(702)		(1,758)		(1,247)
Total assets	$	475,161	$	500,502
Total income (loss) before income taxes					$	6,375	$	(6,079)	$	14,802	$	(19,822)

(Provision) benefit for income taxes:
Ethanol and by-products					$	(1,985)	$	893	$	(4,423)	$	5,054
Refined coal						5,441		2,919		7,639		3,878
Corporate and other						221		234		432		427
Total benefit for income taxes					$	3,677	$	4,046	$	3,648	$	9,359

Three Months Ended Nine Months Ended
October 31, October 31,
Sales of products, ethanol and by-products segment: 2020 2019 2020 2019
Ethanol $ 98,850 $ 66,149 $ 191,971 $ 226,986
Dried distillers grains 20,916 16,627 45,314 51,188
Non-food grade corn oil 4,661 3,099 9,162 12,681
Modified distillers grains 562 702 1,228 5,846
Derivative financial instruments losses (777) - (1,075) -
Other 5 26 94 125
Total $ 124,217 $ 86,603 $ 246,694 $ 296,826

Sales of products, refined coal segment:
Refined coal $ 34 $ 68 $ 134 $ 288

	Three Months Ended July 31,				Six Months Ended July 31,
	2021		2020		2021		2020
Net income (loss) (net of noncontrolling interests):
Ethanol and by-products	$	6,418	$	(2,178)	$	14,374	$	(9,611)
Refined coal		2,139		898		2,612		1,048
Corporate and other		(681)		(468)		(1,326)		(820)
Net income (loss) attributable to REX common shareholders	$	7,876	$	(1,748)	$	15,660	$	(9,383)

Assets:	July 31, 2021		January 31, 2021
Ethanol and by-products	$	424,470	$	397,281
Refined coal		1,540		2,861
Corporate and other		79,497		79,203
Total assets	$	505,507	$	479,345

	Three Months Ended July 31,				Six Months Ended July 31,
Sales of products, ethanol and by-products segment:	2021		2020		2021		2020
Ethanol	$	153,990	$	32,524	$	280,059	$	93,121
Dried distillers grains		31,573		5,480		62,691		24,398
Non-food grade corn oil		9,813		1,313		15,407		4,501
Modified distillers grains		1,934		209		4,227		666
Derivative financial instruments losses		(1,638)		(298)		(2,764)		(298)
Other		6		14		100		89
Total	$	195,678	$	39,242	$	359,720	$	122,477
Sales of products, refined coal segment:
Refined coal	$	165	$	85	$	227	$	100

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Ethanol and By-Products

At ~~October~~July 31, ~~2020,~~2021, investments in our ethanol business include equity investments in three ethanol limited liability companies, in two of which we have a majority ownership ~~interest.~~interest in. The following table is a summary of ethanol gallons shipped at our plants:

Entity	Trailing 12 Months Ethanol Gallons Shipped	REX’s Current Effective Ownership Interest	Current Effective Ownership of Trailing 12 Months Ethanol Gallons Shipped
One Earth Energy, LLC	~~119.5~~143.9 M	~~75.3%~~75.6%	~~90.0~~108.8 M
NuGen Energy, LLC	~~95.9~~137.4 M	~~99.5%~~99.7%	~~95.4~~137.0 M
Big River Resources, LLC:
Big River Resources W Burlington, LLC	~~103.1~~108.5 M	10.3%	~~10.6~~11.2 M
Big River Resources Galva, LLC	~~113.7~~119.6 M	10.3%	~~11.7~~12.3 M
Big River United Energy, LLC	~~117.9~~126.4 M	5.7%	~~6.7~~7.2 M
Big River Resources Boyceville, LLC	~~55.2~~62.6 M	10.3%	~~5.7~~6.5 M
Total	~~605.3~~698.4 M		~~220.1~~283.0 M

Our ethanol operations and the results thereof are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, non-food grade corn oil and natural gas and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations ~~due to~~depending upon several factors that affect commodity prices in general, including crop conditions, ~~global health pandemics,~~ the amount of corn stored on farms, weather, federal policy and foreign trade. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other

energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy decisions and trade negotiations can impact ethanol and distillers grains prices), at times ethanol and distillers grains prices may not follow movements in corn prices and, in an environment of higher corn prices or lower ethanol or distillers grains prices, reduce the overall margin structure at the plants. As a result, at times, we may operate our plants at negative or minimally positive operating margins.

We expect our ethanol plants to produce approximately 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 corn oil sale contracts and commodity futures ~~and swap~~

agreements, as management deems appropriate. We attempt to match quantities of these sale 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 ethanol 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 our 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.

Refined Coal

On August 10, 2017, we purchased the entire ownership interest of an entity that owns a refined coal facility, ~~through~~along with a ~~95.35% owned subsidiary,~~minority partner, for approximately $12.0 million. We own 95.35% of the entity. We began operating the refined coal facility immediately after the acquisition. We expect that the revenues from the sale of refined coal produced in the facility will be 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. In order to maintain compliance with Section 45 of the Internal Revenue Code, we are required to test the effectiveness of our process with respect to emissions reductions every six months through an independent laboratory. Annually, the IRS publishes the amount of federal income tax credit earned per ton of refined coal produced and sold. We expect to earn credits at the rate of approximately ~~$7.30~~$7.38 per ton of refined coal produced and sold during calendar year ~~2020.~~2021. The tax credits can be earned for refined coal produced and sold by our facility through November 18, 2021. Absent the tax credits, our refined coal operations would not be profitable and we expect to cease operations at that time. At the conclusion of the operations we are obligated to remove the equipment from the site but do not expect the cost to be significant.

The refined coal facility is located at the site of a utility-owned electrical generating power station, which is our refined coal operation’s sole customer. Refined coal production and sales vary depending on fluctuations in demand from the site host utility, which generally changes based upon weather conditions in

the geographic markets, ~~the utility serves and~~ competing energy prices, ~~and~~lack of supplies and the state of the local economy. We have contracted with an experienced third party to operate and maintain the refined coal facility and to provide us with management reporting and operating data as required. We do not have any employees on site at the refined coal facility.

Future Energy

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 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 (“Future Energy”).

We have 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 have funded all costs relating to new intellectual property, consultants, research and development, pilot field tests and equipment purchases with respect to the proposed commercialization stage of the technology. To date, we have paid and expensed approximately $2.5 million cumulatively ~~primarily for patents, purchases of certain equipment~~to purchase our ownership interest and fund patent and other expenses. We have not yet tested or proven the commercial feasibility of the technology.

Critical Accounting Policies and Estimates

During the three months ended ~~October~~July 31, ~~2020,~~2021, we did not change any of our critical accounting policies as disclosed in our ~~2019~~2020 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April ~~1, 2020.~~12, 2021.

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 ~~2020”~~2021” means the period February 1, ~~2020~~2021 to January 31, ~~2021.~~2022.

Results of Operations

Trends and Uncertainties

~~During fiscal~~In recent years, ~~2020 and 2019,~~ operating results in our ethanol and by-products segment have been, at times ~~adversely~~ affected by a weak margin environment ~~highlighted by~~including such factors as higher costs for corn, including increased basis over index pricing, lower availability of local corn, lower ~~oil prices resulting from an oversupply of oil,~~ethanol demand and the EPA granting small refiner ~~waivers, and in the first quarter of fiscal year 2020, the outbreak of a new strain of the coronavirus “COVID-19”.~~

Weather conditions delayed, and in some cases prevented the planting of corn in much of the United States during 2019. Weather also contributed to intermittent logistical delays during fiscal year 2019. Throughout most of fiscal year 2019 and the first six months of fiscal year 2020, we struggled to

obtain adequate supplies of corn at our NuGen facility, on a consistent basis, at acceptable price levels. Consequently, we were not able to profitably operate our NuGen ethanol plant at production levels near our historical averages.waivers.

During the early months of 2020, COVID-19 spread into the United States and other countries. In an effort to contain the spread of this virus, there ~~have been~~were various government mandated restrictions, in addition to voluntary privately implemented restrictions, including limiting public gatherings, retail store closures, restrictions on employees working ~~travel restrictions~~ and the quarantining of people who may have been exposed to the virus. This led to reduced demand for gasoline and ethanol, ~~and~~which consequently resulted in historically low ethanol pricing. As a result, we idled our NuGen and One Earth ethanol plants in ~~late~~ 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 in related prices. As a result, we resumed production operations at the One Earth ethanol plant in late May of 2020 and at NuGen in late June of 2020. In addition, actions by the Federal Reserve related to the COVID-19 outbreak, ~~have~~ reduced interest rates. Given the amount of cash and short-term investments we have, this ~~will significantly reduce~~has reduced our interest income and could continue in future periods, depending on the length of time interest rates remain at these levels. The impacts of the COVID-19 outbreak on our business operations, including the ~~duration and impact on ethanol demand,~~recent Delta variant, cannot be reasonably estimated at this time, although a ~~future~~ prolonged production stoppage at our plants ~~would~~could have a ~~further~~ material adverse impact on our results of operations, financial condition and cash flows in ~~fiscal year 2020.~~future periods.

Congress passed the CARES Act in March 2020, which provided the United States department of Agriculture (“USDA”) with additional funding ~~for~~from the “Commodity Credit ~~Corporation (“CCC”).~~Corporation. The USDA is using this additional funding to provide direct payments to farmers, including ~~corn~~ farmers that we purchase corn from. Such direct payments to farmers could cause ~~them to delay~~further delays in marketing decisions. Consequently, this could reduce the supply of available corn and could result in a price ~~increase for what we pay for corn.~~increase. In addition, China has been purchasing large quantities of corn, which ~~could lead~~has led to ~~sustained~~ higher prices for corn. We have experienced an increase in the local basis price paid over Chicago Board of Trade for corn during the first six months of fiscal year 2021.

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. When it was originally established by Congress, 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. On December 19, 2019, the EPA announced the final 2020 renewable volume obligation for conventional ethanol, which met the 15.0 billion gallons congressional target. The EPA has missed its deadline and has not yet released a draft renewable volume obligation rule for the 2021 volumes. On April 15, 2020, five state Governors sent a letter to the EPA requesting a general waiver ~~from~~of the RFS II requirements due to the drop in demand caused by COVID-19 travel restrictions. On October 21, 2020, 15 U.S. Senators sent a letter to the EPA requesting a general waiver ~~from~~of the RFS II requirements to reduce the 2021 renewable volume obligation, citing the reduced demand for fuels due to COVID-19. ~~It is unclear when~~

On June 25, 2021, the ~~renewable volume obligation~~Supreme Court of the United States ruled in favor of small refiners and reversed a portion of the decision by the U.S. Court of Appeals for ~~2021 will be released.~~

~~Under~~ the ~~Renewable Fuel Standard “RFS”, the EPA assigns individual refiners, blenders and importers the volume of renewable fuels they are obligated to use based~~10th Circuit on their percentage of total domestic transportation fuel sales. The EPA can waive the obligation for individual small refineries that are experiencing “disproportionate economic hardship” due to compliance with the RFS. Until recent years, the EPA approved relatively few such waivers. The EPA approved 31 small refiner waivers ~~related to their 2018 Renewable Fuel Standard compliance obligations, which was estimated to effectively reduce~~(SRWs). It only reversed the obligation for ethanol in 2018 by 1.4 billion gallons. The EPA previously granted waivers for 2016 and 2017 totaling approximately 2.6 billion gallons. These actions affect current year demand as obligated parties such as refiners can useinterpretation of “extension” of a waiver but not the ~~waivers granted by~~economic hardship portion of the ~~EPA to help them meet their obligations in different years. There continues to be uncertainty regarding~~decision. It remains unclear how the ~~EPA will administer~~Supreme Court decision may impact the ~~small refiner waivers. We believe the waivers have resulted in reduced domestic ethanol demand.~~EPA’s handling of SRWs.

Throughout fiscal year ~~2019~~2020 and ~~during~~ the first ~~nine~~six months of fiscal year ~~2020,~~2021, operating results in our refined coal segment ~~have been adversely~~were affected by ~~lower~~inconsistent utility plant demand ~~from our~~(our only ~~customer. Projections, provided by~~customer). By November 18, 2021, we expect to cease these operations and the ~~utility plant, for the next twelve months indicate~~resulting earning of production tax credits, as based upon current legislation this ~~trend may continue and may~~facility will no longer be ~~further impacted by the COVID-19 pandemic. While this leads~~eligible to ~~lower pre-tax losses from this segment, it also leads to lower~~earn additional tax ~~benefits from Section 45~~ credits ~~being recognized. Ultimately, this results in lower amounts of segment profit.~~beyond that date.

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

~~For a detailed analysis of period to period changes, see the segment discussion that follows this section as that discussion reflects how management views and monitors our business.~~

~~Comparison of Three and Nine Months Ended October 31, 2020 and 2019~~

Net sales and revenue in the quarter ended October 31, 2020 were approximately $124.3 million compared to approximately $86.7 million in the prior year’s third quarter, representing an increase of approximately $37.6 million, which was primarily caused by higher sales in our ethanol and by-products segment. A poor 2019 harvest caused by weather conditions in that area, prevented us from profitably operating our NuGen ethanol plant at or near historical production levels during the third quarter of fiscal year 2019. Net sales and revenue in the first nine months of fiscal year 2020 were approximately $246.8 million compared to approximately $297.1 million in the first nine months of fiscal year 2019, representing a decrease of approximately $50.3 million, which was primarily caused by lower sales in our ethanol and by-products segment of approximately $50.1 million during fiscal year 2020. The decline in ethanol and by-products segment net sales and revenue reflects significantly lower production volumes during the first half of fiscal year 2020. This relates primarily to diminished local availability of corn, the effects of the COVID-19 outbreak on ethanol demand and lower ethanol pricing which resulted in the idling of the NuGen and One Earth ethanol plants in March of 2020. We resumed production operations at One Earth in late May of 2020 and at NuGen in late June of 2020.

Gross profit for the third quarter of fiscal year 2020 was approximately $17.7 million, compared to gross loss of approximately $1.8 million for the third quarter of fiscal year 2019. Gross profit for the third quarter of fiscal year 2020 increased by approximately $19.4 million compared to the prior year third

~~quarter as a result~~Comparison of ~~operations in the ethanol~~Three and ~~by-products segment. Gross loss in the refined coal segment was $1.3 million in the third quarter of fiscal year~~Six Months Ended July 31, 2021 and 2020 compared to a $1.8 million gross loss in the third quarter of fiscal year 2019. Gross profit for the first nine months of fiscal year 2020 was approximately $7.0 million compared to approximately $5.9 million for the first nine months of fiscal year 2019. Gross profit for the first nine months of fiscal year 2020 decreased by approximately $1.1 million compared to the first nine months of fiscal year 2019 as a result of operations in the ethanol and by-products segment and increased by approximately $2.2 million as a result of operations in the refined coal segment.

SG&A expenses were approximately $4.3 million for the third quarter of fiscal year 2020, consistent with approximately $4.1 million of expenses for the third quarter of fiscal year 2019. SG&A expenses were approximately $13.3 million for the first nine months of fiscal year 2020, consistent with approximately $13.6 million for the first nine months of fiscal year 2019.

During the third quarter of fiscal year 2020, we recognized income of approximately $1,152,000 compared to a loss of approximately $15,000 for the third quarter of fiscal year 2019, from our equity investment in Big River, which is included in our ethanol and by-products segment results. We recognized income of approximately $168,000 for the first nine months of fiscal year 2020 compared to approximately $350,000 for the first nine months of fiscal year 2019. Big River has interests in four ethanol production plants that shipped approximately 390 million gallons in the trailing twelve months ended October 31, 2020 and has an effective ownership of ethanol gallons shipped for the same period of approximately 337 million gallons. Big River’s operations also include agricultural elevators. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Interest and other income was approximately $0.5 million for the third quarter of fiscal year 2020 compared to approximately $1.0 million for the third quarter of fiscal year 2019. Interest and other income was approximately $1.4 million for the first nine months of fiscal year 2020 compared to approximately $3.4 million for the first nine months of fiscal year 2019. Interest income has decreased as yields on our excess cash decreased compared to fiscal year 2019 and our excess cash investment balances decreased compared to fiscal year 2019.

As a result of the foregoing, income before income taxes was approximately $15.1 million for the third quarter of fiscal year 2020 compared to a loss of approximately $4.9 million for the third quarter of fiscal year 2019. Loss before income taxes was approximately $4.7 million for the first nine months of fiscal year 2020 compared to a loss of approximately $4.0 million for the first nine months of fiscal year 2019.

tax provision for the third quarter of fiscal year 2020 includes approximately $1.8 million related to reversing previously recognized tax benefits associated with the lengthening of a net operating loss carryback allowed by the CARES Act as we no longer have a year to date estimated taxable loss.

As a result of the foregoing, net income was approximately $11.1 million for the third quarter of fiscal year 2020 compared to net loss of approximately $1.7 million for the third quarter of fiscal year 2019. Net income was approximately $0.6 million for the first nine months of fiscal year 2020 compared to approximately $5.4 million for the first nine months of fiscal year 2019.

Income related to noncontrolling interests was approximately $2.2 million and approximately $0.4 million during the third quarters of fiscal years 2020 and 2019, respectively, and was approximately $1.1 million and approximately $2.4 million during the first nine months of fiscal years 2020 and 2019, respectively. These amounts represent the other owners’ share of the income or loss of NuGen, One Earth and the refined coal entity.

As a result of the foregoing, net income attributable to REX common shareholders for the third quarter of fiscal year 2020 was approximately $8.8 million, an increase of approximately $10.9 million from net loss attributable to REX common shareholders of approximately $2.1 million for the third quarter of fiscal year 2019. Net loss attributable to REX common shareholders for the first nine months of fiscal year 2020 was approximately $0.5 million, a decrease of approximately $3.6 million from net income attributable to REX common shareholders of approximately $3.0 million for the first nine months of fiscal year 2019.

~~Business Segment Results~~

We have two reportable segments: i) ethanol and by-products; and ii) refined coal. We evaluate the performance of each reportable segment based on segment profit. Segment profit excludes indirect interest income and certain other items that are included in net income determined in accordance with accounting principles generally accepted in the United States of America. Segment profit includes realized and unrealized gains and losses on derivative financial instruments and the provision/benefit for income taxes.

The following sections discuss the results of operations for each of our business segments and corporate and other. Amounts in the corporate and other category include activities that are not separately reportable or related to a segment. We have two reportable segments: i) ethanol and by-products; and ii) refined coal. We evaluate the performance of each reportable segment using net income attributable to REX common shareholders. Segment profitability measures are determined using the same accounting policies used in the preparation of the consolidated financial statements. The following tables summarizes segment and other results (amounts in thousands):

	Three Months Ended				Nine Months Ended
	October 31,				October 31,				Three Months Ended July 31,				Six Months Ended July 31,
	2020		2019		2020		2019		2021		2020		2021		2020
Net sales and revenue:
Ethanol and by-products	$	124,217	$	86,603	$	246,694	$	296,826	$	195,678	$	39,242	$	359,720	$	122,477
Refined coal ¹		34		68		134		288		165		85		227		100
Total net sales and revenue	$	124,251	$	86,671	$	246,828	$	297,114	$	195,843	$	39,327	$	359,947	$	122,577

~~We 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.~~

¹The Company records sales in the refined coal segment net of the cost of coal as the Company purchases the coal feedstock from the customer to which refined coal is sold.

									Three Months Ended July 31,				Six Months Ended July 31,
									2021		2020		2021		2020
Segment gross profit (loss):
Ethanol and by-products	$	18,929	$	28	$	11,259	$	12,312	$	14,155	$	553	$	33,631	$	(7,670)
Refined coal		(1,250)		(1,786)		(4,241)		(6,420)		(3,081)		(1,884)		(4,755)		(2,991)
Total gross profit (loss)	$	17,679	$	(1,758)	$	7,018	$	5,892	$	11,074	$	(1,331)	$	28,876	$	(10,661)

Income (loss) before income taxes:
Ethanol and by-products	$	17,007	$	(2,822)	$	1,397	$	3,491	$	10,732	$	(3,259)	$	21,820	$	(15,610)
Refined coal		(1,270)		(1,648)		(4,235)		(6,351)		(3,455)		(2,118)		(5,260)		(2,965)
Corporate and other		(626)		(434)		(1,873)		(1,146)		(902)		(702)		(1,758)		(1,247)
Total income (loss) before income taxes	$	15,111	$	(4,904)	$	(4,711)	$	(4,006)	$	6,375	$	(6,079)	$	14,802	$	(19,822)

(Provision) benefit for income taxes:
Ethanol and by-products	$	(5,071)	$	945	$	(17)	$	(160)	$	(1,985)	$	893	$	(4,423)	$	5,054
Refined coal		985		2,181		4,863		9,282		5,441		2,919		7,639		3,878
Corporate and other		34		105		461		279		221		234		432		427
Total (provision) benefit for income taxes	$	(4,052)	$	3,231	$	5,307	$	9,401

Segment profit (loss) (net of noncontrolling interests):
Ethanol and by-products	$	9,660	$	(2,330)	$	49	$	684
Refined coal		(227)		607		821		3,209
Corporate and other		(592)		(329)		(1,412)		(868)
Net income (loss) attributable to REX common shareholders	$	8,841	$	(2,052)	$	(542)	$	3,025
Total benefit for income taxes									$	3,677	$	4,046	$	3,648	$	9,359

	Three Months Ended July 31,				Six Months Ended July 31,
	2021		2020		2021			2020
Net income (loss) (net of noncontrolling interests):
Ethanol and by-products	$	6,418	$	(2,178)	$	14,374	��	$	(9,611)
Refined coal		2,139		898		2,612			1,048
Corporate and other		(681)		(468)		(1,326)			(820)
Net income (loss) attributable to REX common shareholders	$	7,876	$	(1,748)	$	15,660		$	(9,383)

The following table summarizes net sales and revenue from the ethanol and by-products segment (amounts in thousands):

	Three Months Ended July 31,				Six Months Ended July 31,
	2021		2020		2021		2020
Ethanol	$	153,990	$	32,524	$	280,059	$	93,121
Dried distillers grains		31,573		5,480		62,691		24,398
Non-food grade corn oil		9,813		1,313		15,407		4,501
Modified distillers grains		1,934		209		4,227		666
Derivative financial instruments losses		(1,638)		(298)		(2,764)		(298)
Other		6		14		100		89
Total	$	195,678	$	39,242	$	359,720	$	122,477

~~Ethanol and by-Products~~

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 net sales and revenue from One Earth and NuGen by product group (amounts in thousands):

The following table summarizes selected ~~operating~~ data from ~~One Earth~~the ethanol and ~~NuGen:~~by-products segment:

	Three Months Ended				Nine Months Ended				Three Months Ended July 31,				Six Months Ended July 31,
	October 31,				October 31,				2021		2020		2021		2020
	2020		2019		2020		2019

Average selling price per gallon of ethanol	$	1.31	$	1.39	$	1.28	$	1.34
Average selling price per gallon of ethanol (net of hedging)									$	2.21	$	1.23	$	2.02	$	1.25
Gallons of ethanol sold (in millions)		74.6		47.6		149.4		169.4		69.0		26.5		139.0		74.8
Average selling price per ton of dried distillers grains	$	129.38	$	134.57	$	136.49	$	137.48	$	206.78	$	135.54	$	207.84	$	143.24
Tons of dried distillers grains sold		161,666		123,557		331,990		372,327		152,689		40,429		301,640		170,324
Average selling price per pound of non-food grade corn oil	$	0.24	$	0.26	$	0.25	$	0.25	$	0.47	$	0.24	$	0.41	$	0.25
Pounds of non-food grade corn oil sold (in millions)		19.0		11.9		37.2		49.8		20.7		5.4		37.8		18.1
Average selling price per ton of modified distillers grains	$	56.68	$	56.56	$	52.44	$	59.67	$	90.54	$	31.87	$	79.13	$	49.32
Tons of modified distillers grains sold		9,924		12,420		23,431		97,975		21,361		6,566		53,421		13,507
Average cost per bushel of grain	$	3.28	$	4.15	$	3.57	$	3.79	$	6.45	$	3.63	$	5.86	$	3.86
Average cost of natural gas (per MmBtu)	$	2.09	$	2.51	$	2.87	$	2.98	$	3.30	$	2.92	$	3.24	$	3.60

Net sales and revenue in the quarter ended July 31, 2021 increased approximately 398% compared to the prior year’s second quarter. Net sales and revenue in the first six months of fiscal year 2021 increased approximately 194%. We had significantly lower production and sales volumes in our ethanol and by-products segment during the first six months of fiscal year 2020, as diminished local availability of corn at the NuGen facility, the effects of the COVID-19 outbreak and lower ethanol pricing resulted in the idling of the NuGen and One Earth ethanol plants in March of 2020. We resumed production operations at One Earth in late May of 2020 and at NuGen in late June of 2020. Both of our consolidated plants produced at or near capacity during the first six months of fiscal year 2021.

Ethanol sales increased ~~from approximately $66.1 million~~ in the ~~third~~second quarter of fiscal year ~~2019~~2021 compared to ~~approximately $98.9 million in~~ the ~~third~~second quarter of fiscal year 2020 ~~primarily~~ as ~~a result~~the number of ~~a 57% increase in~~ gallons sold increased 160% and the average selling price per gallon increased 80% over the prior year second quarter. Ethanol sales increased in the first six months of fiscal year 2021 compared to the ~~third quarter~~first six months of fiscal year ~~2019.~~ 2020 as the number of gallons sold increased 86% and the average selling price per gallon increased 62% over the prior fiscal year. The increase in the ethanol selling price resulted primarily from an increase in demand and an increase in commodity prices.

Dried distillers grains sales increased ~~from approximately $16.6 million~~ in the ~~third~~second quarter of fiscal year ~~2019~~2021 compared to ~~approximately $20.9 million in~~ the ~~third~~second quarter of fiscal year 2020 ~~primarily~~ as ~~a result~~the number of ~~a 31% increase in~~ tons sold increased 278% and the average selling price per ton increased 53% over the prior year second quarter. Dried distillers grains sales increased in the first six months of fiscal year 2021 compared to the ~~third quarter~~first six months of fiscal year ~~2019. Non-food grade corn oil sales~~2020 as the number of tons sold increased ~~from approximately $3.1 million~~77% and the average selling price per ton increased 45% over the prior fiscal year. The increase in the ~~third quarter of fiscal year 2019 to approximately $4.7 million in the third quarter of fiscal year 2020. The increase was~~dried distillers grains selling price resulted primarily ~~a result of a 60%~~from increased demand and an increase in ~~pounds sold compared to the third quarter of fiscal year 2019. Modified~~corn prices as dried distillers grains sales were approximately $0.7 million in the third quarter of fiscal year 2019 compared to approximately $0.6 million in the third quarter of fiscal year 2020. The decrease was primarily a result of a 20% decrease in tons sold compared to the third quarter of fiscal year 2019.prices often correlate with corn pricing.

Non-food grade corn oil sales increased in the second quarter of fiscal year 2021 compared to the second quarter of fiscal year 2020 as the number of pounds sold increased 283% and the average selling price per pound increased 96% over the prior year second quarter. Non-food grade corn oil sales increased in the first six months of fiscal year 2021 compared to the first six months of fiscal year 2020 as the number of pounds sold increased 109% and the average selling price per pound increased 64% over the prior year fiscal year. The increase in the non-food grade corn oil selling price resulted primarily from an increase in demand from the biodiesel industry.

Modified distillers grains sales increased in the second quarter of fiscal year 2021 compared to the second quarter of fiscal year 2020 as the number of tons sold increased 225% and the average selling price per ton increased 184% over the prior year second quarter. Modified distillers grains sales increased in the first six months of fiscal year 2021 compared to the first six months of fiscal year 2020 as the number of tons sold increased 296% and the average selling price per ton increased 60% over the prior year fiscal year. The increase in the modified distillers grains selling price resulted primarily from an increase in corn prices and increased local demand.

Losses on derivative financial instruments, ~~were~~included in net sales and revenue, of approximately ~~$0.8~~$1.6 million ~~during~~in the ~~third~~second quarter of fiscal year ~~2020~~2021 related to our risk management activities and were ~~insignificant~~impacted by the increase in ethanol prices during that quarter. There were losses on derivative financial instruments of approximately $0.3 million during the ~~third~~second quarter of fiscal year 2019. The above noted volume increases were primarily a result of diminished local supplies of corn from a poor 2019 harvest caused by weather conditions in that area, which prevented us from operating our NuGen ethanol plant at or near historical production levels during the third quarter of fiscal year 2019.

Ethanol sales decreased from approximately $227.0 million in the first nine months of fiscal year 2019 to approximately $192.0 million in the first nine months of fiscal year 2020, primarily a result of a decrease of 20.0 million gallons sold. Dried distillers grains sales decreased from approximately $51.2 million in the first nine months of fiscal year 2019 to approximately $45.3 million in the first nine months of fiscal year 2020, primarily a result of a 11% decrease in tons sold compared to the first nine months of fiscal year 2019. Non-food grade corn oil sales decreased from approximately $12.7 million in the first nine months of fiscal year 2019 to approximately $9.2 million in the first nine months of fiscal year 2020, primarily a result of a 25% decrease in pounds sold. Modified distillers grains sales decreased from approximately $5.8 million in the first nine months of fiscal year 2019 to approximately $1.2 million in the first nine months of fiscal year 2020, primarily a result of an 76% decrease in tons sold compared to the first nine months of fiscal year 2019.2020. Losses on derivative financial instruments, included in net sales and revenue, were approximately ~~$1.1~~$2.8 million ~~during~~in the first ~~nine~~six months of fiscal year ~~2020 and were insignificant during~~2021 compared to $0.3 million in the first ~~nine~~six months of fiscal year 2019. The volume decreases for the nine months ended October 31, 2020 were primarily a result of the impact of the COVID-19 outbreak on ethanol demand, lower ethanol pricing, an oversupply of oil and diminished local supplies of corn from a poor 2019 harvest caused by localized 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 in related prices. As a result, we resumed production operations at the One Earth ethanol plant in May of 2020 and at the NuGen ethanol plant in June of 2020.

Gross profit for the ~~third~~second quarter of fiscal year 2021 increased approximately $12.4 million compared to the prior year’s second quarter. This was primarily caused by significantly higher production and sales volumes in our ethanol and by-products segment during the second quarter of fiscal year 2021 compared to the reduced levels during the second quarter of fiscal year 2020 ~~was approximately $18.9 million compared to approximately $28,000 of gross profit for the third quarter of fiscal year 2019.~~discussed above. The crush spread for the ~~third~~second quarter of fiscal year ~~2020~~2021 was approximately ~~$0.19~~break-even per gallon of ethanol sold compared to ~~approximately~~ $(0.04) per gallon of ethanol sold during the ~~third~~second quarter of fiscal year ~~2019. In addition, there were weather related logistical delays and diminished local availability~~2020. The selling price per gallon of ~~corn which negatively impacted production levels at NuGen during~~ethanol sold increased 80% for the ~~third~~second quarter of fiscal year ~~2019.~~2021 compared to the second quarter of fiscal year 2020, slightly outpacing the 78% increase in the cost per bushel of corn during the same periods. In addition, higher sales volumes discussed above and prices of by-products contributed to the increase in gross profit during the second quarter of fiscal year 2021 compared to the second quarter of fiscal year 2020. During the second quarter of fiscal year 2020 the impact from the COVID-19 outbreak and lower gasoline pricing resulted in lower ethanol and corn pricing which severely impacted operations and resulted in the consolidated ethanol plants being idled for a portion of the quarter.

~~Corn~~Grain accounted for approximately ~~79%~~86% ($~~83.4~~156.2 million) of our cost of sales during the ~~third~~second quarter of fiscal year ~~2020~~2021 compared to approximately ~~78%~~68% ($~~67.7~~26.1 million) during the ~~third~~second quarter of fiscal year ~~2019.~~2020. Natural gas accounted for approximately 4%3% ($~~4.0~~6.2 million) of our cost of sales during the ~~third~~second quarter of fiscal year ~~2020~~2021 compared to approximately 4%5% ($~~3.2~~1.9 million) during the ~~third~~second quarter of fiscal year ~~2019. Both the corn~~2020. The grain and natural gas ~~dollar~~expenditure increases were primarily attributable to the higher production levels ~~incurred~~ in the ~~third~~second quarter of fiscal year 2021 compared to the reduced production levels in the second quarter of fiscal year 2020 ~~compared to~~and the ~~third~~significant rise in corn prices during the second quarter of fiscal year ~~2019 levels.~~

Gross profit for the first nine months of fiscal year 2020 was approximately $11.3 million, which was approximately $1.1 million lower compared to approximately $12.3 million of gross profit for the first nine months of fiscal year 2019. The crush spread for the first nine months of fiscal year 2020 was approximately $0.05 per gallon of ethanol sold compared to the first nine months of fiscal year 2019 which was approximately $0.03 per gallon of ethanol sold. Both of our consolidated ethanol plants were idled for portions of the first nine months of fiscal year 2020. Consequently, lower production and resulting sales volumes reduced gross profit for the first nine months of fiscal year 2020.2021.

Gross profit for the first six months of fiscal year 2021 increased approximately $39.5 million compared to the first six months of the prior year. This was primarily the result of significantly higher production and sales volumes in our ethanol and by-products segment during the first six months of fiscal year 2021 compared to the reduced levels during the first six months of fiscal year 2020 discussed above. The crush spread for the first six months of fiscal year 2021 was approximately $0.02 per gallon of ethanol sold compared to $(0.08) per gallon of ethanol sold during the first six months of fiscal year 2020. The selling price per gallon of ethanol sold increased 62% for the first six months of fiscal year 2021 compared to the first six months of fiscal year 2020, outpacing the 52% increase in the cost per bushel of corn during the same periods. In addition, higher sales volumes discussed above and prices of by-products contributed to the increase in gross profit during the first six months of fiscal year 2021 compared to the first six months of fiscal year 2020. During the first six months of fiscal year 2020 the impact from the COVID-19 outbreak and lower gasoline pricing resulted in lower ethanol and corn pricing which severely impacted operations and resulted in the consolidated ethanol plants being idled for a portion of the year and the large gross loss.

Grain accounted for approximately ~~76%~~85% ($~~178.3~~278.2 million) of our cost of sales during the first ~~nine~~six months of fiscal year ~~2020~~2021 compared to approximately ~~78%~~73% ($~~221.3~~94.8 million) during the first ~~nine~~six months of fiscal year ~~2019.~~2020. Natural gas accounted for approximately 5%3% ($~~11.3~~9.9 million) of our cost of sales during the first ~~nine~~six months of fiscal year 2021 compared to approximately 6% ($7.3 million) during the first six months of fiscal year 2020. The grain increase was primarily attributable to the higher production levels in the first six months of fiscal year 2021 compared to the reduced production levels in the first six months of fiscal year 2020 ~~compared to approximately 5% ($13.5 million)~~and the significant rise in corn prices during the first ~~nine~~six months of fiscal year ~~2019. Both the grain and~~2021. The natural gas ~~dollar decreases were~~unit price decrease was primarily attributable to gains realized on the ~~lower production levels incurred in~~sales of unused natural gas during the first ~~nine months~~quarter of fiscal year ~~2020 compared to~~2021. The sales were a result of unusual and significant increases in the spot price of natural gas during portions of the first ~~nine months~~quarter of fiscal year ~~2019 levels.~~2021 which resulted in an opportunity for us to sell forward natural gas purchases at a gain.

We attempt to match quantities of ethanol, distillers grains and non-food grade corn oil sales contracts with an appropriate quantity of grain purchase contracts over a given time period when we can obtain a satisfactory 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 sales 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 contracts cover, we generally cannot predict the future movements in our realized crush spread for more than four months.

SG&A expenses were approximately $6.6 million for the ~~third~~second quarter of fiscal year ~~2020 were~~2021, significantly higher than the approximately ~~$3.5~~$4.4 million ~~consistent with~~of expenses for the ~~third~~second quarter of fiscal year ~~2019 amount of approximately $3.6 million.~~2020. SG&A expenses were approximately ~~$11.1~~$16.6 million for the first ~~nine~~six months of fiscal year ~~2020, consistent with~~2021, significantly higher than the approximately $9.0 million of expenses for the first ~~nine~~six months of fiscal year ~~2019 amount~~2020. A majority of ~~$11.6 million.~~

~~During~~ the ~~third~~increase results from higher shipping costs as more sales contracts in our ethanol and by-products segment provided for shipping to be paid by us in the second quarter of fiscal year ~~2020~~2021 compared to the second quarter of fiscal year 2020. In addition, there was an increase in incentive compensation associated with higher profitability in fiscal year 2021.

During the second quarter of fiscal year 2021, we recognized income of approximately ~~$1,152,000~~$1.8 million compared to a loss of approximately ~~$15,000~~$0.5 million for the ~~third~~second quarter of fiscal year ~~2019,~~2020, from our equity investment in Big ~~River.~~River, which is included in our ethanol and by-products segment results. We recognized income of approximately ~~$168,000~~$2.4 million during the first ~~nine~~six months of fiscal year ~~2020~~2021 compared to a loss of approximately ~~$350,000~~$1.0 million during the first ~~nine~~six months of fiscal year ~~2019. Big River’s results for the nine months ended October 31, 2020 were negatively impacted by the COVID-19 outbreak.~~2020. Big River has interests in four ethanol production plants that shipped approximately ~~390~~417 million gallons in the trailing twelve months ended ~~October~~July 31, ~~2020~~2021 and has an effective ownership of ethanol gallons shipped for the same period of approximately ~~337~~361 million gallons. Big River’s operations also include agricultural elevators. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Interest and other income was approximately ~~$0.5 million~~$39,000 for the ~~third~~second quarter of fiscal year ~~2020 compared to~~2021 versus approximately ~~$0.7 million~~$197,000 for the ~~third~~second quarter of fiscal year ~~2019.~~2020. Interest and other income was approximately ~~$1.1 million~~$82,000 for the first ~~nine~~six months of fiscal year ~~2020 compared to~~2021 versus approximately ~~$2.4 million~~$866,000 for the first ~~nine~~six months of fiscal year ~~2019.~~2020. Interest income ~~has~~ decreased as yields on our excess cash decreased in the first six months of fiscal year 2021 compared to the first six months of fiscal year ~~2019 and our excess cash investment balances decreased compared to fiscal year 2019.~~2020.

~~The provision for~~As a result of the foregoing, income before income taxes was approximately ~~$5.1~~$6.4 million infor the ~~third~~second quarter of fiscal year ~~2020 compared to~~2021 versus a ~~benefit~~loss of approximately ~~$0.9~~$6.1 million infor the ~~third~~second quarter of fiscal year ~~2019. The provision for~~2020. Income before income taxes was approximately ~~$17,000~~$14.8 million versus a loss of approximately $19.8 million for the first six months of fiscal years 2021 and 2020, respectively.

We determined that small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate. Thus, the Company used a discrete effective tax rate method to calculate the provision or benefit for income taxes for the three and six months ended July 31, 2021 and 2020. Our income tax benefit was approximately $3.7 million and approximately $4.0 million for the three months ended July 31, 2021 and 2020, respectively, and was approximately $3.6 million and approximately $9.4 million for the six months ended July 31, 2021 and 2020, respectively We had a higher benefit in the prior year periods based upon pre-tax losses for those periods versus pre-tax income in the current periods. The benefit is also largely impacted by the level of tax credits generated from the refined coal operation. Through its refined coal operation, the Company earns production tax credits pursuant to IRC Section 45. The credits can be used to reduce future income tax liabilities for up to 20 years. Our income tax benefit for the first ~~nine~~six months of fiscal year 2020 includes approximately $1.8 million related to the lengthening of a net operating loss carryback allowed by the CARES Act.

As a result of the foregoing, net income was approximately $10.1 million for the second quarter of fiscal year 2021 compared to net loss of approximately ~~$160,000 in~~$2.0 million for the second quarter of fiscal year 2020. Net income was approximately $18.5 million for the first ~~nine~~six months of fiscal year ~~2019. The fluctuation in segment income tax benefit or provision is primarily related~~2021 compared to net loss of approximately $10.5 million for the ~~fluctuation in pre-tax income or loss.~~first six months of fiscal year 2020.

Income related to noncontrolling interests was approximately ~~$2.3~~$2.2 million ~~and approximately $0.5~~for the second quarter of fiscal year 2021 compared to a loss of $0.3 million ~~during~~for the ~~third quarters~~second quarter of fiscal years ~~2020 and 2019, respectively.~~2020. Income related to noncontrolling interests was approximately ~~$1.3~~$2.8 million ~~and~~for the six months of fiscal year 2021 compared to a loss of approximately ~~$2.6~~$1.1 million ~~during~~for the first ~~nine~~six months of fiscal years ~~2020 and 2019, respectively.~~2020. These amounts represent the other owners’ share of the income or loss of NuGen, ~~and~~ One ~~Earth.~~

Segment profit for the third quarter of fiscal year 2020 was approximately $9.7 million, which was an increase of approximately $12.0 million compared to the prior year third quarter segment loss of approximately $2.3 million. Segment profit for the first nine months of fiscal year 2020 was approximately $49,000, which was approximately $635,000 lower compared to the first nine months of fiscal year 2019 segment profit of approximately $684,000.

~~Refined Coal~~

~~The refined coal segment includes the consolidated financial results of our refined coal entity~~Earth and ~~certain administrative expenses. We acquired~~ the refined coal ~~entity during the third quarter of fiscal year 2017. The following table summarizes sales from refined coal operations by product group (amounts in thousands):~~

Three Months Ended Nine Months Ended
October 31, October 31,
Sales of products, refined coal segment: 2020 2019 2020 2019

Refined coal ¹ $ 34 $ 68 $ 134 $ 288

¹ ~~We 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.~~

Refined coal sales were approximately $34,000 and approximately $68,000 in the third quarters of fiscal years 2020 and 2019, respectively. Refined coal sales were approximately $134,000 and approximately $288,000 in the first nine months of fiscal years 2020 and 2019, respectively. During fiscal year 2020, operating results have been adversely affected by lower utility plant demand (our only customer). Refined coal sales vary depending on fluctuations in demand from the site host utility, which generally changes based upon weather conditions in the geographic markets the utility serves and competing energy prices and supplies and the state of the economy. Based upon current year operations and projections from the site host utility, we expect varying and intermittent demand for refined coal in future periods compared to historical results.entity.

Gross loss was approximately $1.3 million and approximately $1.8 million in the third quarters of fiscal years 2020 and 2019, respectively. Gross loss was approximately $4.2 million and approximately $6.4 million in the first nine months of fiscal years 2020 and 2019, respectively. We expect future period gross losses to vary like the sales fluctuations described above. Based upon the agreements in place that govern the operation, sales and purchasing activities of the refined coal plant, we expect the refined coal operation to continue operating at a gross loss. We expect that the ongoing losses will be subsidized by federal production income tax credits.

~~SG&A expenses were insignificant during the third quarters and first nine months of fiscal years 2020 and 2019. We expect future period expenses to also be insignificant.~~

Loss related to noncontrolling interests was approximately $0.1 million for each of the third quarters of fiscal years 2020 and 2019. Loss related to noncontrolling interests was approximately $0.2 million and approximately $0.3 million in the first nine months of fiscal years 2020 and 2019, respectively. This amount represents the other owner’s share of the pre-tax loss of refined coal operations.

The benefit for income taxes was approximately $1.0 million and approximately $2.2 million in the third quarters of fiscal years 2020 and 2019, respectively. The benefit for income taxes was approximately $4.9 million and approximately $9.3 million in the first nine months of fiscal years 2020 and 2019, respectively. The refined coal segment tax benefit is comprised of an estimated statutory benefit of its pre-tax losses and an estimated benefit from the federal production tax credits we expect to earn from producing and selling refined coal. The amount of benefit we recognize during interim periods will fluctuate based on actual production and profitability levels.

As a result of the foregoing, ~~including the benefit of federal production tax credits~~net income attributable to ~~refined coal production and sales, segment loss~~REX common shareholders for the ~~third~~second quarter of fiscal year ~~2020~~2021 was approximately ~~$0.2~~$7.9 million, ~~compared to segment profit~~an increase of approximately ~~$0.6~~$9.6 million from net loss attributable to REX common shareholders of approximately $1.7 million for the ~~third~~second quarter of fiscal year ~~2019. Segment profit~~2020. Net income attributable to REX common shareholders for the first six months of fiscal year 2021 was approximately ~~$0.8~~$15.7 million, ~~and~~an increase of approximately ~~$3.2~~$25.0 million from net loss attributable to REX common shareholders of approximately $9.4 million for the first ~~nine~~six months of fiscal ~~years 2020 and 2019, respectively.~~year 2020.

~~Corporate and Other~~

SG&A expenses were approximately $0.7 million for both the third quarter of fiscal years 2020 and 2019. These expenses were approximately $2.2 million and approximately $2.1 million for the first nine months of fiscal years 2020 and 2019, respectively.

Interest and other income was approximately $0.1 million and approximately $0.3 million for the third quarters of fiscal years 2020 and 2019, respectively. Interest and other income was approximately $0.3 million and approximately $0.9 million for the first nine months of fiscal years 2020 and 2019, respectively. Interest income has decreased as yields on our excess cash decreased compared to fiscal year 2019 and our excess cash investment balances decreased compared to fiscal year 2019.

Liquidity and Capital Resources

Net cash provided by operating activities was approximately ~~$21.5~~$17.2 million for the first ~~nine~~six months of fiscal year ~~2020,~~2021, compared to cash used of approximately ~~$2.3~~$9.0 million for the first ~~nine~~six months of fiscal year ~~2019.~~2020. For the first ~~nine~~six months of fiscal year ~~2020,~~2021, cash was provided by net income of approximately ~~$0.6~~$18.5 million, adjusted for non-cash items of approximately ~~$14.0~~$6.6 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision and stock based compensation expense. An increase in the balance of accounts receivable used cash of approximately $9.8 million, primarily a result of the timing of products shipped and the receipt of customer payments at One Earth and NuGen in addition to higher sales and pricing. Inventories increased by approximately $3.9 million, primarily a result of the timing of receipt of raw materials and the shipment of finished goods, as well as an increase in the pricing of raw materials. A decrease in the balance of other assets of approximately $0.3 million primarily relates to changes in the carrying value of forward purchase contracts recorded at fair value. An increase in the balance of refundable income taxes of approximately $0.9 million primarily relates to estimated federal and state income tax payments made during fiscal year 2021. An increase in the balance of accounts payable provided cash of approximately $5.5 million, which was primarily a result of the timing of inventory receipts and vendor payments. An increase in the balance of other liabilities provided cash of approximately $0.9 million, which was primarily a result of operating lease payments.

Net cash used in operating activities was approximately $9.0 million for the first six months of fiscal year 2020. For the first six months of fiscal year 2020, cash was used by a net loss of approximately $10.5 million, adjusted for non-cash items of approximately $9.3 million, which consisted of depreciation, amortization of operating lease right-of-use assets, loss from equity method investments, interest income from short-term investments, the deferred income tax provision and stock based compensation expense. We received dividends from Big River of approximately ~~$2.5~~$2.0 million during the first ~~nine~~six months of fiscal year 2020. A decrease in the balance of accounts receivable provided cash of approximately ~~$0.5~~$3.2 million, which was primarily a result of the timing of customer shipments and ~~payments.~~payments as well as lower commodity prices. Inventories decreased by approximately ~~$14.0~~$5.3 million, which was primarily a result of the timing of receipt of raw materials, shipments of finished goods and lower commodity prices. An increase in the balance of refundable income taxes of approximately $4.6 million primarily relates to a net operating loss we intend to carry back for federal income tax purposes. A decrease in the balance of accounts payable used cash of approximately ~~$4.3~~$10.3 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately ~~$5.3~~$2.9 million, which was primarily a result of payments of operating leases and incentive compensation.

Net cash used in operating activities was approximately $2.3 million for the first nine months of fiscal year 2019. For the first nine months of fiscal year 2019, cash was provided by net income of approximately $5.4 million, adjusted for non-cash items of approximately $12.3 million, which consisted of depreciation, amortization of operating lease right-of-use assets, income from equity method investments, interest income from short-term investments, the deferred income tax provision and stock based compensation expense. We received dividends from Big River of approximately $1.0 million during the first nine months of fiscal year 2019. An increase in the balance of accounts receivable used cash of approximately $5.0 million, which was primarily a result of amounts owed by One Earth’s sole corn provider until the end of the third quarter and the timing of customer payments and shipments. Beginning in the fourth quarter of fiscal year 2019, One Earth began sourcing its own corn and in conjunction with this change One Earth was owed approximately $6.7 million at the end of the third quarter from the previous corn originator. An increase in the balance of inventories used cash of approximately $12.6 million, which was primarily a result of the timing of receipt of raw materials, plant shutdowns and the shipment of finished goods. An increase in the balance of accounts payable provided cash of approximately $5.6 million, which was primarily a result of the timing of inventory receipts and vendor payments. A decrease in the balance of other liabilities used cash of approximately $9.0 million, which was primarily a result of payments of operating leases and incentive compensation as well as lower accruals for utilities.

At ~~October~~July 31, ~~2020,~~2021, working capital was approximately ~~$226.3~~$246.0 million, compared to approximately ~~$239.5~~$228.0 million at January 31, ~~2020.~~2021. The ratio of current assets to current liabilities was ~~9.5~~7.4 to 1 at ~~October 31, 2020~~July 1, 2021 and ~~8.6~~8.4 to 1 at January 31, ~~2020.~~2021.

Cash of approximately ~~$10.0~~$0.3 million was ~~used in~~provided by investing activities for the first ~~nine~~six months of fiscal year ~~2020,~~2021, compared to ~~cash provided of~~ approximately ~~$12.7~~$12.4 million used during the first ~~nine~~six months of fiscal year ~~2019.~~2020. During the first ~~nine~~six months of fiscal year ~~2020,~~2021, we had capital expenditures of approximately ~~$6.6~~$2.7 million, primarily for improvements at the ~~purchase of land at~~ One Earth ~~Energy.~~and NuGen facilities. We expect ~~our~~ capital expenditures to be in the range of $3approximately $3.0 million to $5$5.0 million for the remainder of fiscal year ~~2020.~~2021. During the first ~~nine~~six months of fiscal year ~~2020,~~2021, we purchased certificates of deposit (classified as short-term investments) of approximately ~~$68.2~~$49.3 million. During the first ~~nine~~six months of fiscal year ~~2020, we sold~~2021, certificates of deposit (classified as short-term investments) of approximately ~~$65.3 million.~~$52.2 million matured. The certificates of deposit ~~both purchased and sold,~~ had maturities of less than one year. Depending on investment options available, we may elect to retain the funds, or a portion thereof, in cash investments, short-term investments or long-term investments.

Cash of approximately ~~$12.7~~$12.4 million was ~~provided by~~used in investing activities for the first ~~nine~~six months of fiscal year ~~2019.~~2020. During the first ~~nine~~six months of fiscal year ~~2019,~~2020, we had capital expenditures of approximately ~~$2.6 million.~~$5.7 million, primarily for the purchase of land at One Earth Energy. During the first ~~nine~~six months of fiscal year ~~2019,~~2020, we ~~sold United States treasury bills~~purchased certificates of deposit (classified as short-term investments) of approximately ~~$15.0~~$45.5 million. During the first six months of fiscal year 2020, certificates of deposit (classified as short-term investments) of approximately $39.0 million matured.

Cash of approximately ~~$18.3~~$2.5 million was used in financing activities for the first ~~nine~~six months of fiscal year ~~2020,~~2021, compared to approximately ~~$2.3~~$5.7 million ~~during~~for the first ~~nine~~six months of fiscal year ~~2019.~~2020. During the first ~~nine~~six months of fiscal year ~~2020,~~2021, we used cash of approximately ~~$18.1~~$1.4 million to purchase approximately ~~295,000~~17,000 shares of our common stock in open market transactions. We also made payments of approximately $1.3 million to noncontrolling interests holders.

Cash of approximately ~~$2.3~~$5.7 million was used in financing activities for the first ~~nine~~six months of fiscal year ~~2019. During the first nine months of fiscal year 2019,~~2020 as we used cash of approximately ~~$2.6~~$5.6 million to ~~pay dividends to and to~~ purchase approximately 109,000 shares ~~from noncontrolling members. During the first nine months~~ of ~~fiscal year 2019, we received approximately $0.3 million~~our common stock in ~~capital contributions from the minority investor in the refined coal entity.~~open market transactions.

We are investigating various uses for our excess cash and short-term investments. We have historically had a stock buyback program and ~~given our current~~subsequent to the end of the fiscal 2021 second quarter completed a 500,000 share buyback authorization ~~level, can~~from the Board of Directors and obtained authorization to repurchase ~~a total of approximately 43,000 shares at October 31, 2020.~~an additional 500,000 shares. We also plan to seek and evaluate investment opportunities including ethanol and/or energy related, carbon ~~sequestration, energy~~dioxide related, agricultural or other ventures we believe fit our investment criteria in addition to investing in highly liquid short-term securities.

We are working with the University of Illinois to explore the development of a carbon sequestration project to be located near the One Earth ethanol plant. The University of Illinois has received a United States Department of Energy award through the CarbonSAFE program, and, will evaluate the greenhouse gas storage potential ~~beneath the site~~ by drilling a test well and performing seismic surveys. The seismic survey has been completed and the data is being sent for processing. Further work and research ~~are~~is needed to determine if this will be a feasible ~~project.~~location for carbon sequestration and storage.

Forward-Looking Statements

This Form 10-Q 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, natural gas, logistical delays, our ethanol and refined coal plants operating efficiently and according to forecasts and projections, changes in the international, national or regional economies, weather, results of income tax audits, changes in income tax laws or regulations 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 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, ~~2020~~2021 (File No. 001-09097).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

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 and exchange traded commodity futures contracts. Our exposure to market risk, which includes the impact of our risk management activities, is based on the estimated effect on pre-tax income starting on ~~October~~July 31, ~~2020~~2021 is as follows, assuming normal operating capacity (amounts in thousands):

Commodity Estimated Total
Volume for
12 Months ⁽¹⁾ Unit of Measure Decrease in Pre-tax
Income From a 10%
Adverse Change in Price

Ethanol 290,000 Gallons $ 37,912
Corn 104,000 Bushels $ 36,285
Distillers Grains 666 Tons $ 7,629
Non-food grade Corn Oil 71,000 Pounds $ 1,018
Natural Gas 7,400 MmBtu $ 1,396

⁽¹⁾

~~Estimated volumes assume production at or near full capacity. Future period volumes will vary based upon market and plant conditions.~~

Commodity	Estimated Total Volume for 12 Months		Unit of Measure	Decrease in Pre-tax Income From a 10% Adverse Change in Price
Ethanol		280,000	Gallons	$	62,678
Corn		100,000	Bushels	$	57,302
Distillers Grains		770	Tons	$	12,548
Non-food grade Corn Oil		77,750	Pounds	$	3,905
Natural Gas		7,400	MmBtu	$	800

Item 4. Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not party to any legal proceedings that we believe would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

~~During the quarter ended October 31, 2020, there~~There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended January 31, ~~2020.~~2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Issuer Purchases of Equity Securities~~Not Applicable

Period Total Number
of Shares
Purchased Average
Price
Paid per
Share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans
or Programs (1)
August 1-31, 2020 1,200 $ 61.82 1,200 239,985
September 1-30, 2020 120,030 64.70 120,030 119,955
October 1-31, 2020 76,943 71.32 76,943 43,012
Total 198,173 $ 67.26 198,173 43,012

~~(1)~~

On March 20, 2018, our Board of Directors increased our share repurchase authorization by an additional 500,000 shares. At October 31, 2020, a total of 43,012 shares remained available to purchase under this authorization.

Item 3. Defaults upon Senior Securities

Not Applicable

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

The following exhibits are filed with this report:

	31		Rule 13a-14(a)/15d-14(a) Certifications

	32		Section 1350 Certifications

	101		The following information from REX American Resources Corporation Quarterly Report on Form 10-Q for the quarter ended ~~October~~July 31, ~~2020,~~2021, formatted in ~~Inline Extensible Business Reporting Language (iXBRL):~~iXBRL: (i) Consolidated Condensed Balance Sheets, (ii) Consolidated Condensed Statements of Operations, (iii) Consolidated Condensed Statements of Equity, (iv) Consolidated Condensed Statements of Cash Flows and (v) Notes to Consolidated Condensed Financial ~~Statements~~

	~~104~~		~~The cover page from REX American Resources Corporation Quarterly Report on Form 10-Q for the quarter ended October 31, 2020, formatted in iXBRL~~Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~REX American Resources Corporation~~

~~Registrant~~

REX American Resources Corporation
Registrant

Signature	Title	Date

/s/ Zafar Rizvi ~~(Zafar Rizvi)~~	Chief Executive Officer and President
(Zafar Rizvi)	(Chief Executive Officer)	~~December 4, 2020~~September 3, 2021

/s/ Douglas L. Bruggeman ~~(Douglas L. Bruggeman)~~	Vice President, Finance and Treasurer
(Douglas L. Bruggeman)	(Chief Financial Officer)	~~December 4, 2020~~September 3, 2021

	Nine Months Ended October 31, 2020

			Weighted		Weighted
			Average Grant		Average Remaining
	Non-Vested		Date Fair Value		Vesting Term
	Shares		(000’s)		(in years)

Non-Vested at January 31, 2020		28,576	$	2,193		2
Granted		6,158		416
Forfeited		-		-
Vested		15,029		1,211

Non-Vested at October 31, 2020		19,705	$	1,398		2

Commodity	Estimated Total Volume for 12 Months ⁽¹⁾	Unit of Measure	Decrease in Pre-tax Income From a 10% Adverse Change in Price

Ethanol	290,000	Gallons		$	37,912
Corn	104,000	Bushels		$	36,285
Distillers Grains	666	Tons		$	7,629
Non-food grade Corn Oil	71,000	Pounds		$	1,018
Natural Gas	7,400	MmBtu		$	1,396

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
August 1-31, 2020		1,200	$	61.82		1,200		239,985
September 1-30, 2020		120,030		64.70		120,030		119,955
October 1-31, 2020		76,943		71.32		76,943		43,012
Total		198,173	$	67.26		198,173		43,012