{"url_path":"/sec/efty/10-k/2026/item-15","section_key":"item-15","section_title":"Item 15 Controls and Procedures**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/2058349/0001213900-26-056086-index.html","accession_number":"0001213900-26-056086","cik":"0002058349","ticker":"EFTY","issuer_name":"ETOILES CAPITAL GROUP CO., LTD","edgar_url":"https://www.sec.gov/Archives/edgar/data/2058349/0001213900-26-056086-index.html","primary_entity_key":"0002058349","primary_entity_name":"ETOILES CAPITAL GROUP CO., LTD"},"word_count":657,"has_tables":true,"body_markdown":"**Item\n15. Controls and Procedures**\n\n \n\nUnder the supervision and with the participation\nof our management, including our chief executive officer and our chief financial officer, we carried out an evaluation of the effectiveness\nof our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act. Based on that evaluation, our chief\nexecutive officer and chief financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were ineffective. \n\n \n\nIn connection with the audits of our consolidated\nfinancial statements for the years ended December 31, 2025, 2024 and 2023, we identified material weaknesses in our internal control\nover financial reporting as well as other disclosure control deficiencies for the above-mentioned periods. Our independent registered\npublic accounting firm has not conducted an audit of our internal control over financial reporting. As defined in the standards\nestablished by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over\nfinancial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements\nwill not be prevented or detected on a timely basis.\n\n \n\nThe material weaknesses identified are related\nto (i) inadequate segregation of duties for certain key functions due to\nlimited staff and resources; and (ii) a lack of independent directors and an audit committee.\n\n \n\nTo remediate our identified material weaknesses,\nwe have implemented several measures to improve our internal control over financial\nreporting to address the underlying causes of these material weaknesses, including (i) hiring more qualified staff to fill up the\nkey roles in the operations; (ii) appointing independent directors; (iii) establishing an audit committee; and (iv) strengthening\nour corporate governance.\n\n \n\nThe process of designing and implementing an\neffective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the\neconomic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to\nsatisfy our reporting obligations. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to our Business\nand Operations —Any lack of effective internal controls over financial reporting may affect our ability to accurately report our\nfinancial results which may affect the market for and price of our Ordinary Shares.”\n\n \n\nAs a company with less than $1.235 billion in\nrevenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth\ncompany may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.\nThese provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the\nassessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging\ngrowth company does not need to comply with any new or revised financial accounting standards until such date that a private company\nis otherwise required to comply with such new or revised accounting standards.\n\n \n\n**Management’s Annual Report on Internal\nControl over Financial Reporting**\n\n** **\n\nThis Annual Report does not include a report\nof management’s assessment regarding internal control over financial reporting due to a transition period established by rules\nof the SEC for newly public companies.\n\n \n\n**(c) Attestation report of the registered public\naccounting firm**\n\n \n\nSince we are an “emerging growth company”\nas defined under the JOBS Act, we are exempt from the requirement to comply with the auditor attestation requirements that our independent\nregistered public accounting firm attest to and report on the effectiveness of our internal control structure and procedures for financial\nreporting.\n\n** **\n\n**(d) Changes in internal control over financial\nreporting.**\n\n** **\n\nOther than those disclosed above, there were\nno changes in our internal controls over financial reporting that occurred during the period covered by this Annual Report on Form 20-F\nthat have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.\n\n \n\n59"}