REX AMERICAN RESOURCES Corp: Form 10-Q for the period ended Oct 31, 2025

Ethanol and By-Products

At October 31, 2025, 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 October 31, 2025:

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 Energy, LLC, 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, and we continue to provide information to the EPA upon request during the technical review of our application. We currently expect the EPA to prepare a draft permit by February 2026 and make a final permit decision by June 2026, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We also must obtain certain state and county permits for the sequestration site and 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 pipeline between the One Earth ethanol plant and the sequestration site or a sequestration well until further permits and approvals are received.

We have secured land easements from all necessary landowners to allow the construction of the CO2 pipeline on their land from the ethanol plant to the first two injection wells. 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 General Assembly passed the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (SB 1289), which was signed by the Governor in July 2024. The legislation imposes additional safety, environmental and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including CO2 pipelines. Further, the legislation imposes a moratorium on the issuance of new certificates of authority for the construction of CO2 pipelines until the earlier of the date new federal CO2 pipeline safety standards are finalized by the federal PHMSA or, subject to certain other conditions, July 1, 2026.

Illinois Senate Bill 1723 was signed into law by the Governor on August 1, 2025. SB 1723 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. Also see the discussion under “Trends and Uncertainties” of certain recently proposed legislation that, if enacted, could impact 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 reduce our CI score at the One Earth plant with the intention of maximizing tax credits available under the IRA. The IRA created a new Clean Fuel Production Credit under Section 45Z, originally available for calendar years 2025 – 2027 which, based on proposed rulemaking by the United States Department of Treasury, will establish a tax credit that utilizes a sliding scale where credits can be earned incrementally between $0.02 and $0.20, or $0.10 and $1.00 if prevailing wage requirements are met, per gallon of non-SAF fuels based on an ethanol plant’s GHG reduction below a 50 CI score threshold, with the first two or ten cents earned upon achieving a CI score below 47.5, to incentivize further increases in plant efficiencies within the industry. In July 2025, Congress passed the OBBBA, which was subsequently signed into law by the President. The law extended the time period which 45Z credits can be claimed by two years, through December 31, 2029. The U.S. Department of the Treasury has not yet issued final rules on qualification for 45Z tax credits.

We currently budget capital expenditures for both the expansion and sequestration projects at One Earth to be approximately $220 million to $230 million, subject to further refinement as we move forward. We plan to pay for all expenditures from available cash. As of October 31, 2025, we had spent $58.1 million since inception toward the carbon sequestration project. 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 October 31, 2025, we had spent $97.7 million since inception and were contractually committed to spend an additional $17.0 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring at One Earth.

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 signed a bill into law that bans the use of eminent domain in connection with CO2 pipelines. This act could make the sequestration project for the NuGen facility more difficult 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. We have received a Notice of Proposed Adjustments from the IRS that they intend to deny these tax credits. We intend to vigorously defend these credits.

Critical Accounting Policies and Estimates

During the nine months ended October 31, 2025, we did not change any of our critical accounting policies as disclosed in our 2024 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2025.

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 2025” means the period February 1, 2025 to January 31, 2026. The Company includes the results of operations of One Earth in its Consolidated Statements of Operations on a delayed basis of one month as One Earth has a fiscal year end 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 EPA issued 88 refinery exemptions for 2016-2018 compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA did not grant any small refinery waivers for 2019-2022. There have been multiple ongoing legal challenges to how the EPA has handled the small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of Columbia Circuit vacated many of the EPA’s 2022 SRE denials. As a result of this Court ruling, the EPA voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. 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 and 12 50% waivers. These and additional SREs could lead to decreased RIN values and ethanol pricing. As of November 20, 2025, there were 17 SRE petitions pending from compliance years 2023 - 2025. The total exemptions amount to approximately 2.2 billion gallon credits from compliance years 2023 - 2025. The EPA is currently working on determining how to possibly reallocate credits exempted for 2023 and later years. In addition, the EPA laid out its new approach to ruling on SRE petitions. The agency said it would utilize the Department of Energy’s matrix for determining disproportionate harm unless the EPA’s “consideration of other economic factors, including refinery-specific information, compels the Agency to depart from that rebuttable presumption.” It also stated if the small refiner has already demonstrated compliance by retiring RINs it would return those RINs.

The EPA has issued RVOs for calendar years 2023-2025. The volumes from conventional biofuels (which includes corn-based ethanol) were 15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. In June 2025, the EPA issued proposed 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 2025 summer months. This is the fourth 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.

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, or $0.10 and $1.00 if prevailing wage requirements are met, per gallon of non-SAF fuels based on a plant’s GHG reduction below a 50 CI score threshold, with the first two or ten cents earned upon achieving a CI score below 47.5. The IRA also raises the carbon capture tax credit from $50 per metric ton to $85 per metric ton, under section 45Q. 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 2029, removing the indirect land-use change penalty for crop-based feedstocks, limiting eligibility to feedstocks under the USMCA, imposing FEOC restrictions, and prohibiting negative emissions rates except from animal manure. It also modified the language for 45Q tax credits 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.

Additionally, see “One Earth Energy, LLC Carbon Sequestration and Plant Expansion” above for a discussion of certain uncertainties associated with our Illinois carbon sequestration and plant expansion projects.

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. As the plant was no longer eligible to receive federal production tax credits beginning on November 18, 2021, we ceased operations on that date and subsequently sold the facility. The approximately $58.2 million in federal production tax credits received through ownership of this facility remain under IRS audit. We have received a Notice of Proposed Adjustments from the IRS that they have denied these tax credits. We intend to vigorously defend these credits.

The Company claimed research and experimentation tax credits for tax years 2014 – 2022 totaling $24.5 million. These credits have been a focus of the ongoing IRS audit, in which the IRS has notified the Company the credits will be denied at audit. We plan to continue vigorously defending these credits in appeals.

The United States exported an estimated 1.9 billion gallons of ethanol in 2024, up from approximately 1.4 and 1.3 billion gallons in 2023 and 2022, respectively. Through August 2025, the United States exports increased approximately 14% compared to 2024. In 2024 and 2023, an estimated 12.2 and 10.8 million metric tons, respectively, of distillers grains were exported from the United States, which represented approximately 37% and 34% in 2024 and 2023, respectively, of U.S production. Through August 2025, distiller grain exports declined by approximately 4% on the calendar year. There has been much discussion around proposed and recently enacted tariffs by the United States and counter-tariffs and other trade restrictions involving countries which have been large purchasers from our industry in the United States, which could affect future demand for these products.

Based on the November 14, 2025 report from the USDA, corn production is forecasted to be 16.75 billion bushels in 2025, up 12% from 2024. The average corn yield is forecasted to be a record high of 186 bushels per acre, an increase of 6.7 bushels from 2024.

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

Comparison of Three and Nine Months Ended October 31, 2025 and 2024

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

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

The following table summarizes selected operating data:

Net sales and revenue in the quarter ended October 31, 2025 increased an insignificant amount compared to the prior year third quarter. Net sales and revenue in the first nine months ended October 31, 2025 increased approximately 2% compared to the first nine months of 2024.

Ethanol revenue decreased 2% in the third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024 as the selling price per gallon decreased 5%, offset partially by a 4% increase in the number of gallons sold during the quarter. Ethanol revenue increased 3% in the first nine months of fiscal year 2025 compared to the first nine months of fiscal year 2024 due to a 2% increase in gallons sold during first nine months of 2025 compared to the prior year comparable period with prices remaining consistent year-over-year. Ethanol pricing is affected by many factors, including overall market supply and demand, as well as corn and gasoline pricing.

Dried distillers grains revenue decreased 11% in the third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024 as there was a 6% decrease in tons sold, coupled with a 5% decrease in the average price per ton sold. Dried distillers grains revenue decreased 15% in the first nine months of fiscal year 2025 compared to the first nine months of fiscal year 2024 as the average price per ton sold decreased 14%, coupled with a 1% decrease in tons sold. The decrease in the dried distillers grains selling price is consistent with recent quarters and reflects an extended period of lower corn pricing as dried distillers grains prices often correlate with corn pricing. The decrease in tons sold was impacted by increased production levels of other ethanol by-products.

Distillers corn oil revenue increased approximately 60% in the third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024 as the selling price per pound increased 36% and the amount of pounds sold increased 17%. Distillers corn oil revenue increased approximately 35% in the first nine months of 2025 compared to the first nine months of fiscal year 2024 as the selling price per pound increased 23% and the amount of pounds sold increased 11%. The corn oil yield per bushel ground improved at our consolidated ethanol plants in both the three- and nine-month periods ended October 31, 2025, relative to the comparable period in fiscal 2024. The increase in the distillers corn oil selling price resulted primarily from fluctuations in demand in the renewable biodiesel market.

Modified distillers grains revenue increased 2% in the third quarter of fiscal year 2025 compared to the third quarter of fiscal year 2024 as the amount of tons sold increased by 13%, offset partially with a 9% decrease in the average selling price per ton sold. Modified distillers grains revenue increased 16% in the first nine months of fiscal year 2025 compared to the first nine months of fiscal year 2024 as the amount of tons sold increased by 23%, offset partially by a 5% decrease in the average selling price per ton sold. The decrease in the modified distillers grains selling price in the three- and nine-month periods resulted primarily from an extended period of lower corn prices, as prices tend to move in the same direction but are also impacted by changes in local market demand. Our consolidated plants’ decisions to sell modified or dried distillers grains fluctuate from time to time based upon market conditions.

Cost of sales increased 3% in the quarter ended October 31, 2025, compared to the prior year third quarter. Corn accounted for approximately 75% ($104.2 million) of our cost of sales during the third quarter of fiscal year 2025 compared to approximately 76% ($102.6 million) during the third quarter of fiscal year 2024. Natural gas accounted for approximately 4% ($6.2 million) of our cost of sales during the third quarter of fiscal year 2025 and 3% ($4.6 million) in the third quarter of fiscal year 2024. Cost of sales increased 4% in the first nine months of fiscal year 2025, compared to the first nine months of fiscal year 2024. Corn accounted for approximately 74% ($317.1 million) of our cost of sales during the first nine months of fiscal year 2025 compared to approximately 76% ($312.2 million) during the first nine months of fiscal year 2024. Natural gas accounted for approximately 5% ($20.0 million) of our cost of sales during the first nine months of fiscal year 2025 and 4% ($15.6 million) in the first nine months of fiscal year 2024.

As a result of the foregoing, gross profit for the third quarter of fiscal year 2025 decreased approximately $3.5 million compared to the prior year third quarter. Gross profit for the first nine months of fiscal year 2025 decreased approximately $9.1 million compared to the first nine months of fiscal year 2024.

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 were approximately $8.2 million for the third quarter of fiscal year 2025, compared to approximately $8.4 million of expenses for the third quarter of fiscal year 2024. SG&A expenses were approximately $20.4 million for the first nine months of fiscal year 2025, compared to approximately $21.0 million for the first nine months of fiscal year 2024. The decreases compared to the prior year were due primarily to a decrease in performance bonus expense of $0.3 million and $1.3 million in the third quarter of fiscal year 2025 and the first nine months of fiscal year 2025, respectively, from the comparable periods of fiscal year 2024. Additionally, there was a decrease in stock compensation expense of approximately $0.6 million and $1.1 million in the third quarter of fiscal year 2025 and the first nine months of fiscal year 2025, respectively, from the comparable periods of fiscal year 2024 subsequent to the completion of the restricted stock units performance period on December 31, 2024. These decreases were partially offset by an increase in rail car lease payments due to higher rates realized upon lease renewals.

During the third quarter of fiscal year 2025, we recognized income from our equity investment in Big River of approximately $4.4 million compared to income of approximately $3.6 million for the third quarter of fiscal year 2024. During the first nine months of fiscal year 2025, we recognized income from our equity investment in Big River of approximately $6.3 million compared to income of approximately $7.1 million during the first nine months of fiscal year 2024. Our investment in Big River, which has interests in four ethanol production plants, represents an effective ownership of approximately 39.0 million gallons of ethanol shipped in the trailing twelve months ended October 31, 2025. 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 third quarter of fiscal year 2025 versus approximately $4.6 million for the third quarter of fiscal year 2024. Interest and other income was approximately $10.5 million for the first nine months of 2025 versus approximately $15.0 million for the first nine months of fiscal year 2024. The decrease is primarily related to decreased interest income of $1.4 million and $3.8 million in the third quarter and first nine months of fiscal year 2025, respectively, based upon lower balances and yields on our excess cash and short-term investments in fiscal year 2025, compared to 2024. One of our consolidated ethanol plants recognized $0.5 million less in patronage income from an investment in a cooperative in the first nine months of 2025 ($0.7 million) compared to the first nine months of 2024 ($1.2 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 $35.5 million and $39.5 million for the third quarters of fiscal year 2025 and 2024, respectively. Income before income taxes was approximately $61.2 million and $75.0 million for the first nine months of fiscal year 2025 and 2024, 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 $8.0 million and $9.4 million for the three months ended October 31, 2025 and 2024, respectively. Our income tax provision was approximately $13.7 million and $17.6 million for the first nine months of fiscal year 2025 and 2024, respectively.

As a result of the foregoing, net income was approximately $27.5 million for the third quarter of fiscal year 2025 compared to approximately $30.1 million for the third quarter of fiscal year 2024. Net income was approximately $47.5 million for the first nine months of fiscal year 2025 compared to approximately $57.4 million for the first nine months of fiscal year 2024.

Net income attributable to noncontrolling interests was approximately $4.1 million for the third quarter of fiscal year 2025 and $5.6 million for the third quarter of 2024. Net income attributable to noncontrolling interests was approximately $8.3 million for the first nine months of fiscal year 2025 and $10.3 million for the first nine months of fiscal year 2024. 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 third quarter of fiscal year 2025 was approximately $23.4 million, compared to net income attributable to REX common shareholders of approximately $24.5 million for the third quarter of fiscal year 2024. Net income attributable to REX common shareholders from the first nine months of fiscal year 2025 was approximately $39.2 million, compared to net income attributable to REX common shareholders of approximately $47.1 million for the first nine months of fiscal year 2024.

Liquidity and Capital Resources

Summary of Cash Flows and Working Capital (in thousands)

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Operating Activities

Net cash provided by operating activities was $64.0 million for the first nine months of fiscal 2025, compared to $39.1 million for the prior year period.

Operating cash flows for the nine-month period ended October 31, 2025 reflected net income of $47.5 million and non-cash adjustments of $17.2 million, consisted of depreciation, amortization of right-of-use assets, 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. Additionally, Big River paid dividends of approximately $2.5 million during the first nine months of fiscal year 2025. These inflows were partially offset by various changes to working capital of $3.2 million during the first nine months of 2025, most significantly including:

• Use of cash of approximately $9.0 million from the decrease in other liabilities as a result a reduction in the lease liability of $4.6 million from payments made during the year, a decrease in accrued payroll of approximately $3.2 million primarily related to the payment of the cash portion of the 2024 incentive bonuses, offset partially by the accrual of the 2025 incentive bonuses to be paid in 2026, and a decrease in both accrued utilities and accrued real estate taxes of approximately $0.5 million each
• Use of cash of $5.9 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
• Cash provided of approximately $4.0 million from the decrease of inventory balances during the period
• Cash provided of approximately $3.5 million to reflect the amount the recorded uncertain tax positions exceeded the remaining unused credits they are recorded against
• Cash provided of $3.0 million due to a increase in accounts payable, primarily related to the timing of inventory receipts and vendor payments

In fiscal 2024, operating cash flow reflected net income of $57.4 million and non-cash adjustments of $20.3 million. Additionally, Big River paid dividends of approximately $3.0 million during the first nine months of fiscal year 2024. These inflows were partially offset by various changes to working capital of approximately $41.6 million, most significantly caused by:

• Use of cash of approximately $21.6 million due to a decrease in accounts payable, primarily related to the timing of inventory receipts and vendor payments
• Use of cash of approximately $12.6 million due to the increase in the balance of other assets primarily related to prepayments on certain executed lease agreements, offset by changes in the carrying value of forward purchase contracts and commodity futures positions recorded at fair value, decreases to spare parts inventory, and decreases to prepaid insurance balances
• Use of cash of approximately $6.2 million from the decrease in other liabilities as a result a reduction in the lease liability of $4.0 million from payments made during the year, a decrease in accrued payroll of approximately $0.6 million primarily related to the payment of the 2023 incentive bonuses, offset partially by the accrual of the 2024 incentive bonuses to be paid in 2025, and a decrease in accrued utilities of approximately $1.3 million
• Use of cash of approximately $2.1 million from the increase of inventory balances during the period

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Investing Activities

Net cash provided by investing activities was $47.5 million in the first nine months of fiscal 2025 versus $37.6 million in the first nine months of fiscal 2024. In fiscal 2025, capital expenditures totaled $55.7 million, primarily at One Earth, which includes plant expansion and CI reduction projects ($33.2 million) and carbon sequestration ($2.8 million). Treasury activity provided net cash, as $129.0 million of purchases were more than offset by $232.0 million of maturities.

In the first nine months of fiscal 2024, capital expenditures were $55.4 million, primarily at One Earth, which includes plant expansion and CI reduction projects ($24.5 million) and carbon sequestration ($22.4 million). Treasury activity also provided net cash, as $210.3 million of purchases were offset by $303.0 million of maturities.

Financing Activities

Net cash used in financing activities was $35.8 million in the first nine months of fiscal 2025, including $33.4 million for stock repurchases, $2.3 million for payments to noncontrolling interests and $0.1 million in finance lease payments. In fiscal 2024, financing outflows were $1.9 million, solely for payments to noncontrolling interests.

Capital Resources

At October 31, 2025, working capital was $354.2 million with a current ratio of 7.2x. The Company continues to investigate various uses for our excess cash and short-term investments, including stock repurchases and potential investments in ethanol, energy, carbon sequestration, and agriculture-related ventures.

We expect total capital expenditures related to the construction at the One Earth facilities to approximate $220 million to $230 million, inclusive of the carbon sequestration project and plant capacity expansion and ongoing efforts to reduce CI scoring, which we currently plan to pay from our available cash. This estimate is subject to further refinement as the projects progress. As of October 31, 2025, we had spent $58.1 million since inception and were contractually committed to spend an additional $0.1 million toward the carbon sequestration project. As of October 31, 2025, we had spent $97.7 million since inception and were contractually committed to spend an additional $17.0 million toward plant capacity expansion and CI scoring reduction efforts. For all projects, we plan to spend $25 million to $35 million during the remainder of fiscal year 2025.

At October 31, 2025, 2,357,186 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.

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 impact of legislative and regulatory changes, the price volatility and availability of corn, distillers grains, ethanol, distillers corn oil, gasoline and natural gas, commodity market risk, ethanol plants operating efficiently and according to forecasts and projections, logistical interruptions, success in permitting and developing the planned carbon sequestration facility near the One Earth Energy ethanol plant, changes in the international, national or regional economies, the impact of inflation, the ability to attract employees, weather, results of income tax audits, changes in income tax laws or regulations, the impact of U.S. foreign trade policy and tariffs, changes in foreign currency exchange rates, the effects of terrorism or acts of war and the effect of pandemics on the Company’s business operations, including impacts on supplies, demand, personnel and other factors. 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, 2025 (File No. 001-09097).

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 fixed-price purchase and fixed-price sale contracts and exchange traded commodity futures contracts. Our remaining exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price purchase and sale contracts and derivatives, is based on the estimated effect on pre-tax income for the twelve months following October 31, 2025 is as follows, assuming normal operating capacity (amounts in thousands):

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.

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, 2025.