REX American Resources (REX) risk factors, FY2025 10-K

Risks Related to our Ethanol and By-Products Business

1. 01The ethanol industry is changing rapidly which could result in unexpected developments that could negatively impact our operations
2. 02The financial returns on our ethanol investments are highly dependent on commodity prices, which are subject to significant volatility, uncertainty and regional supply shortages, so our results could fluctuate substantially
3. 03Our returns on ethanol investments are highly sensitive to corn prices
4. 04Our risk management strategies may be ineffective and may expose us to decreased profitability and liquidity
5. 05The market for natural gas is subject to market conditions that create uncertainty in the price and availability of the natural gas that our ethanol plants use in their manufacturing process
6. 06Fluctuations in the selling price of commodities may reduce profit margins at our ethanol plants
7. 07Inflation could impact the cost and/or availability of material, labor and other input, which could adversely affect our operations
8. 08The price of ethanol and distillers grains may decline as a result of trade restrictions, duties or tariffs on ethanol and distillers grains exports from the United States or from unfavorable foreign currency exchange rates
9. 09Increased ethanol production or decreases in demand for ethanol may result in excess production capacity in the ethanol industry, which may cause the price of ethanol, distillers grains and distillers corn oil to decrease
10. 10There are limited markets for ethanol other than what is federally mandated. Increased consumer acceptance of E15 and E85 fuel is likely necessary in order for ethanol to achieve significant market share growth beyond federal mandate levels
11. 11We may not successfully develop our planned carbon sequestration facility near the One Earth Energy ethanol plant
12. 12Carbon capture and sequestration projects are subject to federal, state, and local regulations
13. 13We depend on our partners to operate certain of our ethanol investments
14. 14We may not successfully acquire or develop additional ethanol investments or expansion
15. 15Our ethanol plants may be adversely affected by technological advances and efforts to anticipate and employ such technological advances may prove unsuccessful
16. 16Any advances in technology which require significant unanticipated capital expenditures to remain competitive or which reduce demand or prices for ethanol would have a material adverse effect on the results of our ethanol operations
17. 17The U.S. ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation and any changes in legislation or regulation could materially and adversely affect our results of operations and financial position
18. 18The inability to generate or obtain RINs could adversely affect our operating results
19. 19Federal support of cellulosic ethanol may result in reduced incentives to corn-derived ethanol producers
20. 20Our ethanol business is affected by environmental and other regulations which could impede or prohibit our ability to successfully operate our plants
21. 21Our ethanol business may become subject to various environmental and health and safety and property damage claims and liabilities
22. 22Our business is not diversified
23. 23We may not be able to meet commitments to produce and sell ethanol
24. 24We may not be able to meet commitments to purchase commodities
25. 25Our revenue from the sale of distillers grains depends upon its continued market acceptance as an animal feed
26. 26have a negative impact on our results of operations. We may not be able to obtain a suitable replacement for antibiotics, should this be required, which would also negatively impact the market for distillers grains
27. 27We face significant competition in the ethanol industry
28. 28We may face competition from foreign producers
29. 29We may not be able to hire and retain qualified personnel to operate our ethanol plants and carbon sequestration facility
30. 30Our plants depend on an uninterrupted supply of energy and water to operate. Unforeseen plant shutdowns could harm our business
31. 31We rely on information technology in our operations and financial reporting and any material failure, inadequacy, interruption or security breach of that technology could harm our ability to efficiently operate our business and report our financial results accurately and timely
32. 32We ship much of our products and receive a portion of our corn via rail, which involves risks involving potential regulatory changes that could adversely affect our cash flows and operating results
33. 33We operate in a capital intensive industry. Limitations on external financing could adversely affect our financial performance
34. 34There is a risk of a pandemic that could spread into the United States and other countries

Risks Related to our Refined Coal Operations

1. 35Availability of the tax credits under IRC Section 45
2. 36Our refined coal operation and its by-products may result in environmental and product liability claims and environmental compliance costs
3. 37We used patented technology

Risks Related to REX and General Risk Factors

1. 38We have concentrations of cash deposits at financial institutions that exceed federal insurance limits
2. 39We may fail to realize the anticipated benefits of mergers, acquisitions, or other investments
3. 40Rising focus on environmental, social and corporate governance matters from investors and regulators may increase our operating costs, bring down the value of our products and assets, and impact our ability to access capital markets
4. 41Federal, state and local jurisdictions may challenge our tax return positions