Company: OPGN
Filing Date: 2025-08-21
Form Type: 10-K
Source: 0001829126-25-006628
Chunk: 235

Company: OPGEN INC
Filing Date: 2025-08-21
Form: 10-K
Item: Item 1A
Chunk 235
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 its financial statements, and these liabilities will continue to decrease over the life of the lease. However, since the lease
assignment agreement also states that the assignee indemnifies OpGen, the assignor, from and against any claims, liabilities, etc. arising
out of or resulting from obligations of the assignee under the lease arising on or after April 1, 2024, the Company recorded an indemnification
asset on its balance sheet for the quarter ended March 31, 2024 of equal value to the lease liability, such that, on a net basis, there
would be no impact to stockholders’ equity or the balance sheet.

We discussed that the Company should consider
removing the indemnification asset from its books and restate its Form 10-Q for the quarter ended March 31, 2024. The Company agreed with
our findings and removed the previously recorded indemnification asset and gain on lease indemnification and changed the accounting estimates
related to the operating lease right-of-use asset and leasehold improvement property and equipment and recorded a gain on impairment adjustment.

Revenue Recognition

As described in Note 3 to the consolidated financial
statements, during 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