{"url_path":"/sec/hlp/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":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/1855557/0001213900-26-055737-index.html","accession_number":"0001213900-26-055737","cik":"0001855557","ticker":"HLP","issuer_name":"Hongli Group Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1855557/0001213900-26-055737-index.html","primary_entity_key":"0001855557","primary_entity_name":"Hongli Group Inc."},"word_count":955,"has_tables":true,"body_markdown":"Item 15. CONTROLS AND PROCEDURES \n\n \n\n**Evaluation of Disclosure 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, as of December 31, 2025. Based on\nthat evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures as of\nDecember 31, 2025 were not effective.\n\n \n\n**Management’s Annual Report on Internal Control over Financial\nReporting**\n\n** **\n\nOur management is responsible for establishing\nand maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal\ncontrol over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting\nand the preparation of financial statements for external purposes in accordance with the U.S. GAAP. Because of its inherent limitations,\ninternal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness\nto future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree\nof compliance with policies or procedures may deteriorate. Under the supervision and with the participation of our management, including\nour chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal control over\nfinancial reporting as of December 31, 2025. The assessment was based on criteria established in the framework Internal Control-Integrated\nFramework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management\ndetermined that, as of December 31, 2025, our internal control over financial reporting was not effective due to material weaknesses\nidentified in our internal control over financial reporting as described below under “Internal Control over Financial Reporting.”\n\n \n\n114\n\n \n\n \n\n**Internal Control over Financial Reporting**\n\n \n\nIn the course of preparing our consolidated financial\nstatements for the year ended December 31, 2025, we identified several control deficiencies, which include material weaknesses and significant\ndeficiencies, in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting\nOversight Board of the United States (the “PCAOB”), as of December 31, 2025. As defined in the standards established by the\nPCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting,\nsuch that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented\nor detected on a timely basis. The material weaknesses identified by management, together with our independent registered public accounting\nfirm, were as follows:\n\n \n\n \n●\nThe Company lacked key monitoring\nmechanisms, including an internal control department, to oversee and monitor risk management, business strategies, and financial\nreporting processes.\n\n \n\n \n●\nThe Company did not have adequately\ndesigned and documented management review controls to effectively detect and prevent delays in account reconciliations.\n\n \n\n \n●\nThe Company lacked accounting\npersonnel with sufficient knowledge of U.S. GAAP and SEC reporting requirements, which resulted in several adjustments being identified\nand proposed by our independent registered public accounting firm.\n\n \n\nWe also identified the following deficiencies\nthat we believe to be significant deficiencies. As defined in standards established by the PCAOB, a “significant deficiency”\nis a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness,\nyet important enough to merit attention by those responsible for oversight of our financial reporting as follows:\n\n \n\n \n●\nLack of formal internal controls\nover financial closing and reporting processes.\n\n \n\n \n●\nLack of formal risk assessment process.\n\n \n\nWe have already taken some steps and have continued\nto implement measures to remediate the material weaknesses and significant deficiencies identified. However, we cannot assure you that\nwe will not identify additional material weaknesses or significant deficiencies in the future.\n\n \n\nTo remediate the material weakness and significant\ndeficiency described above, we have undertaken the following actions:\n\n \n\n \n●\nHired an experienced outside consultant with adequate experience with U.S. GAAP and the SEC reporting and compliance requirements\n\n \n\n \n●\nContinued our efforts to provide\nongoing training courses in U.S. GAAP to existing personnel, including our Chief Financial Officer\n\n \n\n \n●\nContinued our efforts to setup\nthe internal audit department, and enhance the effectiveness of the internal control system\n\n \n\n \n●\nContinued our efforts to implement necessary review and controls at related levels and the submission of all important documents and contracts to the office of our Chief Executive Officer for retention.\n\n \n\n115\n\n \n\n \n\nIn light of the material weaknesses and significant\ndeficiencies identified, our management, accounting and financial reporting staff, and outsourced financial reporting consultant performed\nadditional analyses and procedures in order to conclude that our consolidated financial statements as of December 31, 2025, and for the\nyear then ended included in this Annual Report on Form 20-F are fairly stated in accordance with U.S. GAAP. Accordingly, our management\nbelieves that the Company’s consolidated financial statements as of December 31, 2025, and for the year then ended are fairly stated,\nin all material respects, in accordance with U.S. GAAP.\n\n \n\n**Attestation Report of the Registered Public Accounting Firm**\n\n** **\n\nWe did not include an attestation report of the\nCompany’s registered public accounting firm in this annual report on Form 20-F as registrants that are non-accelerated filers,\nor “emerging growth companies” are not required to provide such auditor attestation report.\n\n \n\n**Changes in Internal Control over Financial Reporting**\n\n \n\nOther than those disclosed above, there were no\nchanges 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\n**I****tem\n16. Reserved**"}