Company: OPGN
Filing Date: 2025-08-21
Form Type: 10-K
Source: 0001829126-25-006628
Chunk: 2276

Company: OPGEN INC
Filing Date: 2025-08-21
Form: 10-K
Item: Item 15
Chunk 2276
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 the years ended December 31, 2024 and 2023, the Company derived revenues from (i) listing sponsorship and consultancy
services, (ii) the sale of Unyvero Application cartridges, Unyvero Systems, Acuitas AMR Gene Panel test products, and SARS CoV-2 tests,
(iii) providing laboratory services, and (iv) providing collaboration services including funded software arrangements, license arrangements,
and the FIND NGO collaboration on its Unyvero A30 platform.

We identified the assessment of revenue recognition
on listing sponsorship and consultancy services, as a critical audit matter due to significant judgment made by management in
estimating the performance and achievement of the performance obligations which represent a milestone. These management judgments, in
turn, led to a high degree of auditor judgment, subjectivity, and effort in planning and performing procedures and evaluating audit evidence
relating to management’s estimate of variable consideration and the allocation of revenue amongst the performance obligations.

The following are the primary procedures we performed
to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related
to the Company’s revenue processes, including controls related to the identification of distinct performance obligations and the
method and significant assumptions used to determine the transaction price for those identified distinct performance obligations. Additionally,
we obtained and evaluated the Company’s revenue recognition accounting analysis by (1) inspecting the contracts to gain an understanding
of contractual terms and conditions and evaluating the rights and obligations of the Company, (2) interviewing the Company’s personnel
to gain an understanding of the nature and estimated value of commitments made to customers, (3) evaluating the method and significant
assumptions used to determine the transaction price which is payable as the performance obligations are achieved, and (4) testing that
each payment tranche was accurately applied in allocating the transaction price to each distinct performance obligation.

Stock-based compensation

As discussed in Note 7 to the financial
statements, the Company entered into certain transactions which included the issuance of stock options or restricted stock units to employees
which were valued using a pricing model.

We identified the valuation and accounting
treatment of these issuances to be a critical audit matter because determining the fair value and related accounting treatment
of these issuances involves a high degree of auditor judgement and an increased extent of effort to evaluate the Company’s conclusions.

F-3

Our audit procedures related to the
conclusions associated with the valuation and accounting treatment for these issuances involved the following