Company: STAK
Filing Date: 2025-11-05
Form Type: 20-F
Source: 0001493152-25-020818
Chunk: 98

Company: STAK Inc.
Filing Date: 2025-11-05
Form: 20-F
Item: Item 5
Chunk 98
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 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.
 

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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 as the principal, recognizing revenue on a gross basis as we are primarily responsible for fulfilling the contract, bear the inventory risk as the processed specialized oilfield vehicles and equipment are stored in our warehouse before sales and we have the controls and ownership over the products, and have the discretion in establishing the sales price.
 
Automation solutions services
 
We provide corporate customers with automation solutions services, with multiple promises in the service contract, including software development, training, debugging, and other services for oilfield-specialized production and maintenance equipment. The software development, training, debugging, and other services are provided to customers prior to their acceptance of the developed software or function, and are not distinct because they are highly interdependent and interrelated with one another, integrated together as inputs to provide an combined output, that is to provide a well-developed software or function to corporate customers.
 
Therefore, we identify only one performance obligation to provide corporate customers with the automation solutions services at a fixed price stated in the contracts. Corporate customers would not receive and consume the benefits before the delivery of the developed software or function. Both the corporate customers and us have the unilateral right to terminate the contract at any time with compensation, which would be further agreed by each party upon termination if any. In addition, we would control the source