Company: STAK
Filing Date: 2025-02-26
Form Type: 424B4
Source: 0001493152-25-008310
Chunk: 80

Company: STAK Inc.
Filing Date: 2025-02-26
Form: 424B4
Chunk 80
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 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.

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 a 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 we 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 code and script of the software or function and would not
have the enforceable right to the payment until the delivery of the developed software or function, therefore, the revenue is recognized
at a point in time upon the corporate customers’ acceptance of the developed software or function. Payment terms are generally
6 months after the completion of the service. 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, and have the discretion in establishing the sales price.

Other revenue primarily derives
from sales of parts and materials, such as specialized vehicle chassis parts. For the year ended June 30, 2024, the other revenue primarily
consisted of the sales of specialized vehicle chassis parts of $2,830,222. Other revenue is recognized on a gross or net basis. Generally,
we arrange the provision of parts and materials, control the parts and materials before they are transferred to the customers, have totally
discretion in establishing the price, and therefore, we act as a principal. We act as an agent if we are not primarily responsible for
fulfilling the contract, do not control the parts and materials before they are transferred to