Company: STAK
Filing Date: 2025-02-26
Form Type: 424B4
Source: 0001493152-25-008310
Chunk: 79

Company: STAK Inc.
Filing Date: 2025-02-26
Form: 424B4
Chunk 79
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93,218, and $97,526
provision for credit losses as of June 30, 2024 and 2023, respectively.

| 48 |

Revenue recognition

We adopted ASC Topic 606 Revenue
from Contracts with Customers with a date of the initial application of July 1, 2021 using the modified retrospective method.

We generate revenues primarily
from sales of specialized oilfield vehicles, sales of specialized oilfield equipment, automation solutions services and others. In accordance
with Revenue from Contracts with Customers (“ASC 606”), revenues from contracts with customers are recognized when or as
the control of the services or goods is transferred to the customer, in an amount that reflects the consideration we expect to be entitled
to in exchange for those goods or services net of business tax and value added tax. Revenue recognition policies for each type of revenue
stream are as follows:

We sell specialized oilfield
vehicles and specialized oilfield equipment. We design and manufacture specialized oilfield equipment and components of specialized
oilfield vehicles. In addition, we also supply our core equipment and components then outsource them to qualified specialized vehicle
manufacturing companies to integrate and produce specialized oilfield vehicles, and the final products are sold by us externally. We
generate revenues from sales of specialized oilfield vehicles and specialized oilfield equipment through contracts with customers. We
identify only one performance obligation to provide customers with the specific vehicle or equipment at a fixed price stated in the contracts.

We provide standard manufacturer’s
warranty promise to general repairs on delivered specialized oilfield vehicles or specialized oilfield equipment if it does not perform
as expected. We consider the warranty we provided not as an incremental service to customers, but rather an assurance of the product’s
quality. Therefore, it is an assurance-type warranty, not a separate performance obligation, and should be accounted for in accordance
with ASC 460, Guarantees. Because we have not experienced any claim for products, we do not recognize assurance-type warranty liability
bases on the best estimation. We regularly reevaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust
the amounts as necessary.

The revenue is recognized
at a point in time upon the controls of the promised products are transferred to the customers. This occurs when the customers either
pick up the products themselves or when the products are delivered to the customers’ designated place and accepted by them. Payment
terms for product sales are generally 6 months after the control of products is transferred to the customers. We are deemed