Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Ethanol and By-Products

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

Entity	Location	REX's Current Ownership Interest
One Earth Energy, LLC	Gibson City, IL	76.1%
NuGen Energy, LLC	Marion, SD	99.7%
Big River Resources, LLC:
Big River Resources W Burlington, LLC	W. Burlington, IA	10.3%
Big River Resources Galva, LLC	Galva, IL	10.3%
Big River United Energy, LLC	Dyersville, IA	5.7%
Big River Resources Boyceville, LLC	Boyceville, WI	10.3%

Our ethanol operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains, distillers corn oil and natural gas, and availability of corn. As a result of price volatility for these commodities, our operating results can fluctuate substantially. The price and availability of corn is subject to significant fluctuations depending upon several factors that affect commodity prices in general, including crop conditions, the amount of corn stored on farms, weather, federal policy, foreign trade, tariffs, and international disruptions caused by wars or conflicts. Because the market prices of ethanol and distillers grains are not always directly related to corn prices (for example, demand for crude and other energy and related prices, the export market demand for ethanol and distillers grains, soybean meal prices, and the results of federal policy 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 2.9 gallons of denatured ethanol for each bushel of corn processed in the production cycle. We refer to the actual gallons of denatured ethanol produced per bushel of corn processed as the realized yield. We refer to the difference between the price per gallon of ethanol and the price per bushel of corn (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 corn and natural gas purchase contracts, forward ethanol, distillers grains and distillers corn oil sale contracts, and commodity futures agreements, as management deems appropriate. We attempt to match quantities of these sales contracts with an appropriate quantity of corn 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 prices. Consequently, we generally execute fixed price contracts for no more than four months into the future at any given time and we may lock in our corn or ethanol price without having a corresponding locked in ethanol or corn price for short durations of time. As a result of the relatively short period of time our fixed price contracts cover, we generally cannot predict the future movements in 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.

One Earth Energy, LLC Carbon Sequestration and Plant Expansion

One Earth Sequestration, LLC, a wholly owned subsidiary of One Earth, is in the developmental stage of a carbon sequestration project near the One Earth ethanol plant. In October 2022, we applied to the EPA for a Class VI injection well permit for three wells. The EPA issued a draft permit on August 17, 2026. This opens the public comment period through September 23, 2026. We also must obtain certain state and county permits for the sequestration site and connector pipeline. We have completed the construction of the capture and compression facility to capture, dehydrate, and compress carbon dioxide from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin construction of the CO₂ connector pipeline between the One Earth compression facility and the sequestration well until further permits and approvals are received.

Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth, we continue to work with the various government agencies involved to obtain all required permits and approvals, with no assurance of the ultimate success or timing of the project. Also see the discussion under "Trends and Uncertainties" relating to the impact of certain recently adopted legislation and certain recently proposed legislation that, if enacted, could affect our carbon sequestration project.

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

As of July 31, 2026, we had spent $59.1 million since inception toward the carbon sequestration project and were contractually obligated to spend an additional $0.3 million. If the carbon sequestration project is successful, we believe we will qualify for tax credits under section 45Q, based on tons of carbon sequestered, and section 45Z, based on gallons of ethanol produced, as outlined in the IRA and OBBBA. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available. As of July 31, 2026, we had spent $132.1 million since inception and were contractually committed to spend an additional $3.9 million toward plant capacity expansion at One Earth. We plan to pay for all expenditures from available cash.

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

In May 2023, NuGen, our majority owned ethanol plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions' carbon capture and storage pipeline. Should Summit Carbon Solutions be able to obtain all necessary permits and approvals, the agreement would allow NuGen to share in the economic benefits of tax credits through the sale of the CO₂ output of its ethanol production facility for sequestration, as well as to reduce its net carbon emissions. In March 2025, South Dakota enacted a law that bans the use of eminent domain in connection with CO₂ pipelines. In addition, in March 2026, a North Dakota Court voided the permits issued to Summit Carbon Solutions for underground storage of carbon dioxide as the Court has deemed the law under which the permits were issued to be unconstitutional. Summit Carbon Solutions is analyzing the decision and is contemplating next steps. These actions have delayed and could make the sequestration project for the NuGen facility more difficult for Summit Carbon Solutions to complete.

We plan to seek and evaluate various investment opportunities, including ethanol and/or energy related, carbon sequestration, agricultural or other ventures we believe fit our investment criteria. We can make no assurances that we will be successful in our efforts to find such opportunities.

Refined Coal

On August 10, 2017, we purchased, through a 95.35% owned subsidiary, the entire ownership interest of an entity that owned a refined coal facility. We began operating the refined coal facility immediately after the acquisition. Using licensed technology, our plant applied two separate chemicals to convert feedstock coal into refined coal, which was sold to the end user of the refined coal. The refined coal operating results were subsidized by federal production tax credits through November 18, 2021, subject to meeting qualified emissions reductions as governed by Section 45 of the IRC. We ceased operating the facility on November 18, 2021 and subsequently sold the facility. The approximately $58.2 million in federal production tax credits received through the ownership of this facility remain under IRS audit. That audit is in the process of being finalized, with the Company expecting to retain all federal production credits claimed for this project.

Critical Accounting Estimates

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

Fiscal Year

All references in this report to a particular fiscal year are to REX's fiscal year ended January 31. The Company refers to its fiscal year by reference to the year immediately preceding the January 31 fiscal year end date. For example, "fiscal year 2026" means the period February 1, 2026 to January 31, 2027. The Company includes the results of operations of One Earth and the equity investment income of Big River in its Consolidated Statements of Operations on a delayed basis of one month as One Earth and Big River have fiscal year ends of December 31.

Results of Operations

Trends and Uncertainties

Renewable Fuel Standard II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States. There has been much uncertainty in the enforcement of RFS II. When it was originally established, RFS II required the volume of "conventional" or corn derived ethanol to be blended with gasoline to increase each year until it reached 15.0 billion gallons in 2015 and required that it remain at that level through 2022. There are no established congressional target volumes beginning in 2023. The EPA has the authority to waive the biofuel mandate, in whole or in part, if there is inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition, under RFS II, a small refiner that processes fewer than 75,000 barrels of oil per day can petition the EPA for a waiver of their requirement to submit RINs. The EPA, through consultation with the United States Department of Energy and the USDA, can grant the refiner a full or partial waiver, or deny the waiver. The waiving of a refiner's obligation effectively lowers the amount of renewable fuels required to be blended, and by extension the amount of RINs that need to be retired, which can impact their values and ultimately blending levels of renewable fuels. There are multiple ongoing legal challenges to how the EPA has handled SREs and RFS rulemaking. On August 22, 2025, the EPA ruled on much of the backlog of SREs, issuing 63 full exemptions, 77 partial exemptions of 50%, 28 denials and 7 ruled as ineligible. On November 7, 2025, the EPA issued two 100% waivers, twelve 50% waivers and two denials. On August 3, 2026, the EPA issued one 100% waiver, two 50% waivers and determined three petitions to be ineligible from compliance years 2023 and 2024. On August 31, 2026, the remainder of the open SRE petitions from compliance year 2025, 34 in total, were decided with 18 full exemptions, 11 partial exemptions of 50% and five either denied or ruled ineligible, representing 1.8 billion RINs exempted. The EPA has proposed that 100% of the difference between previously projected and actual exempted volumes from the August 31, 2026 release be reallocated into the 2026 and 2027 RVOs. As a result of this announcement, the EPA has extended the 2025 RVO compliance date by 30 days to October 1, 2026. As of August 31, 2026, there were 8 SRE petitions pending from compliance years 2026-2027.

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

The EPA issued emergency waivers allowing the sale of E-15 gasoline for the 2026 summer months. 2026 represents the fifth consecutive year for these emergency waivers. The EPA has not granted

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

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

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

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

Illinois Senate Bill 1723, enacted in 2025, prohibits carbon sequestration activities over, under, or through the aquifer as defined by the EPA. The proposed injection wells for our carbon sequestration project are located outside of these areas.

Although we have made meaningful progress and significant investments in the carbon sequestration project at One Earth, we continue to work with the various government agencies involved to obtain all required permits and approvals, with no assurance of the ultimate success or timing of the project.

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

Based on the August 2026 report from the USDA, corn production is forecasted to be approximately 16.0 billion bushels in 2026. The average corn yield is forecasted to be 180.7 bushels per acre, with planted acres projected to be 96.7 million and harvested acres projected to be 88.6 million. The final 2025 USDA report estimated a record 2025 corn production of 17.0 billion bushels with an estimated 186.5 bushels per acre, on an estimated 91.3 million acres harvested.

The trends and uncertainties mentioned above could impact our future operating results in both positive and negative ways.

Comparison of Three and Six Months Ended July 31, 2026 and 2025

The following table summarizes our results from operations (amounts in thousands):

		Three Months Ended July 31,								Six Months Ended July 31,
		2026				2025				2026				2025
Net sales and revenue		$	168,493			$	158,563			$	324,992			$	316,903
Production tax credit income			18,410				-				25,959				-
Cost of sales			133,603				144,244				268,580				288,242
Gross profit		$	53,300			$	14,319			$	82,371			$	28,661
Income before income taxes		$	48,118			$	12,097			$	74,233			$	25,723
Provision for income taxes		$	(7,472)			$	(2,769)			$	(11,909)			$	(5,723)
Net income attributable to REX common shareholders		$	34,944			$	7,111			$	53,396			$	15,789

The following table summarizes net sales and revenue by product group (amounts in thousands):

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

The following table summarizes selected operating data:

		Three Months Ended July 31,								Six Months Ended July 31,
		2026				2025				2026				2025
Average selling price per gallon of ethanol (net of hedging)		$	1.78			$	1.75			$	1.72			$	1.75
Gallons of ethanol sold (in millions)			70.6				70.6				141.7				141.5
Average selling price per ton of dried distillers grains		$	166.55			$	143.63			$	161.03			$	144.66
Tons of dried distillers grains sold			145,081				148,017				300,113				301,027
Average selling price per pound of distillers corn oil		$	0.72			$	0.54			$	0.63			$	0.50
Pounds of distillers corn oil sold (in millions)			24.3				23.1				48.2				44.5
Average selling price per ton of modified distillers grains		$	65.10			$	64.41			$	71.24			$	69.21
Tons of modified distillers grains sold			12,465				19,421				25,892				41,515

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

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

Dried distillers grains revenue increased 14% in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025 as there was a 16% increase in the average price per ton sold, offset slightly by a 2% decrease in tons sold. Dried distillers grains revenue increased 11% in the first six months of fiscal year 2026 compared to the first six months of fiscal year 2025 as there was an 11% increase in the average price per ton sold, while tons sold remained consistent. The increase in the dried distillers grains selling price primarily reflects increased soymeal prices, which are often correlated with the price of distillers grains, as well as increased export demand.

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

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

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

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

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

months of fiscal year 2026 increased approximately $53.7 compared to the first six months of fiscal year 2025.

We attempt to match quantities of ethanol, distillers grains and distillers corn oil sales contracts with an appropriate quantity of corn 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. We utilize derivative financial instruments, primarily exchange traded commodity future contracts and swap contracts, in conjunction with certain of our corn procurement activities and commodity marketing activities.

SG&A expenses for the second quarter of fiscal year 2026 were approximately $15.6 million (9.3% of net sales and revenue), an increase of approximately $9.4 million or 152% from approximately $6.2 million (3.9% of net sales and revenue) for the second quarter of fiscal year 2025. SG&A expenses for the first six months of fiscal year 2026 were approximately $25.4 million (7.8% of net sales and revenue), an increase of approximately $13.2 million or 109% from approximately $12.1 million (3.8% of net sales and revenue) for the first six months of fiscal year 2025. The dollar increase compared to the prior year is partially related to a $4.7 million increase and $7.5 million increase in performance bonuses in the three and six months periods ended July 31, 2026, primarily attributable to the increase in net income. Additionally, there was an increase of $3.0 million related to restricted stock awards granted to certain executive officers in the second quarter of 2026, which were expensed upon issuance.

During the second quarter of fiscal year 2026, we recognized income from our equity investment in Big River of approximately $7.2 million compared to income of approximately $0.9 million for the second quarter of fiscal year 2025. In the second quarter of fiscal year 2026, approximately $1.8 million of our recognized income from Big River was from Section 45Z tax credits. During the first six months of fiscal year 2026, we recognized income from our equity investment in Big River of approximately $10.8 million compared to income of approximately $1.9 million for the first six months of fiscal year 2025. In the first six months of fiscal year 2026, approximately $3.6 million of our recognized income was from Section 45Z tax credits. Big River did not recognize any benefit from Section 45Z tax credits in the three and six month periods ended July 31, 2025 as proposed regulations had not yet been issued. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 40.8 million gallons of ethanol shipped in the trailing twelve months ended July 31, 2026. Due to the inherent volatility of commodity prices within the ethanol industry, we cannot predict the likelihood of future operating results from Big River being similar to historical results.

Interest and other income was approximately $3.2 million for the second quarter of fiscal year 2026 versus approximately $3.1 million for the second quarter of fiscal year 2025. Interest and other income was approximately $6.5 million for the first six months of fiscal year 2026 versus approximately $7.3 million for the first six months of fiscal year 2025. One of our consolidated ethanol plants recognized $0.6 million less in patronage income from an investment in a cooperative in the first six months fiscal year 2026

($0.1 million) compared to the first six months of fiscal year 2025 ($0.7 million). We do not expect patronage income from this investment in a cooperative to be significant in future periods.

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

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

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

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

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

Liquidity and Capital Resources

Summary of Cash Flows and Working Capital (dollar amounts in thousands):

		Six Months Ended July 31,
			2026				2025
Net cash provided by operating activities		$	38,023			$	12,808
Net cash (used in) provided by investing activities		$	(131,495)			$	67,533
Net cash used in financing activities		$	(3,934)			$	(35,634)

		July 31, 2026				January 31, 2026
Working capital		$	391,539			$	372,451
Current ratio			6.9x				5.9x

Operating Activities

Net cash provided by operating activities was $38.0 million for the first six months of fiscal year 2026, compared to $12.8 million provided by operating activities in the prior year period.

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

	●	Use of cash of $27.3 million from the increase in prepaid expenses and other, primarily as a result of the recording of production tax credit assets of $26.0 million in fiscal year 2026.
	●	Use of cash of $8.8 million from the increase in accounts receivable as a result of the timing of products shipping and the receipt of customer payments at our consolidated ethanol plants.
	●	Use of cash of approximately $3.9 million from the decrease in accrued expenses and other liabilities as a result of a reduction in the lease liability of $3.3 million from payments made during the year, and a decrease in accrued utilities of approximately $1.1 million.
	●	Cash provided of $3.8 million from the decrease in refundable income taxes due primarily to the accrual of the federal taxes currently payable being more than the estimated federal tax payments made to date. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed.

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

	●	Use of cash of approximately $9.9 million due to a decrease in accounts payable, primarily related to the timing of inventory receipts and vendor payments.
	●	Use of cash of approximately $5.5 million from the decrease in other liabilities primarily caused by a decrease in accrued payroll which used cash of approximately $4.4 million, due to the timing of annual bonus payments. Additionally, a decrease in the lease liability used cash of $3.0 million based on payments made during the quarter. These decreases are partially offset by an increase in other current liabilities of $1.9 million.
	●	Use of cash of approximately $3.3 million due to an increase in accounts receivable as a result of the timing of products shipping and the receipt of customer payments at our consolidated ethanol plants.
	●	Use of cash of $2.0 million from the increase in refundable income taxes due primarily to the accrual of the federal taxes currently payable being less than the estimated federal tax payments made to date. While the Company has tax credits available to offset all amounts owed, the Company is limited to using tax credits for only 75% of federal taxes owed.

Investing Activities

Net cash used in investing activities was $131.5 million in the first six months of fiscal year 2026 versus $67.5 million provided in the first six months of fiscal year 2025. In fiscal 2026, capital expenditures totaled $35.0 million, primarily at One Earth, which includes the plant expansion project ($27.5 million) and carbon sequestration ($0.8 million). Treasury activity used net cash, as $320.8 million of purchases exceeded $224.0 million of maturities of short term investments.

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

Financing Activities

Net cash used in financing activities was $3.9 million in the first six months fiscal year 2026, due to $2.2 million paid to noncontrolling interests holders and $1.6 million in repurchases of common shares. In the first six months of fiscal year 2025, financing outflows were $35.6 million, including $33.4 million for stock repurchases, and $2.3 million for payments to noncontrolling interests holders.

Capital Resources

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

As of July 31, 2026, we had spent $59.1 million since inception and were contractually committed to spend an additional $0.3 million toward the carbon sequestration project. As of July 31, 2026, we had spent $132.1 million since inception and were contractually committed to spend an additional $3.9 million toward the plant capacity expansion project. For all projects, we currently anticipate spending $20 million to $30 million during the remainder of fiscal year 2026. We plan to pay for all expenditures from available cash.

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