{"url_path":"/sec/tc/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":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1743340/0001213900-26-053942-index.html","accession_number":"0001213900-26-053942","cik":"0001743340","ticker":"TC","issuer_name":"Token Cat Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1743340/0001213900-26-053942-index.html","primary_entity_key":"0001743340","primary_entity_name":"Token Cat Ltd"},"word_count":901,"has_tables":true,"body_markdown":"** **\n\n**ITEM\n15. CONTROLS AND PROCEDURES**\n\n** **\n\n**Evaluation\nof Disclosure Controls and Procedures**\n\n \n\nOur\nmanagement, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness\nof our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period\ncovered by this report.\n\n \n\nNotwithstanding\nmanagement’s assessment that our internal control over financial reporting was ineffective as of December 31, 2025 due to the material\nweaknesses described below, we believe that the consolidated financial statements included in this annual report fairly present our financial\nposition, results of operations and cash flows for the fiscal years covered thereby in all material respects.\n\n** **\n\n**Management’s\nAnnual Report on Internal Control over Financial Reporting**\n\n \n\nOur\nmanagement is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system\nwas designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation\nof its published consolidated financial statements. All internal control systems, no matter how well designed, have inherent limitations.\nTherefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance\nwith respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods\nare subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the\npolicies or procedures may deteriorate. As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules promulgated by\nthe SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making\nthis assessment, it used the criteria established within the Internal Control-Integrated Framework (2013) issued by the Committee of\nSponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management has concluded that, as of December\n31, 2025, our internal control over financial reporting was ineffective due to the material weaknesses identified below.\n\n \n\nIn accordance with reporting requirements set forth by the SEC, a “material\nweakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a\nreasonable possibility that a material misstatement of our company’s annual or interim consolidated financial statements will not\nbe prevented or detected on a timely basis. The material weaknesses, one of which was first identified in the course of preparing our\nconsolidated financial statements for the years ended December 31, 2016 and 2017, relate to (1) lack of sufficient financial reporting\nand accounting personnel with U.S. GAAP and SEC reporting expertise; (2) weaknesses in financial reporting controls over revenue and cost\ngrouping and in the monthly financial closing process, including ineffective account reconciliations; (3) weaknesses in treasury and bank\naccount controls, including monitoring, documentation, and bank confirmation processes; (4) inadequate processes and documentation to\nensure complete and accurate disclosure of changes in Group structure; and (5) concentration risk arising from significant prepayments\nfor MCN-related equipment affecting liquidity monitoring and related controls. We do not believe that the material weaknesses had\na significant impact on our financial reporting.\n\n \n\nTo remedy the material weaknesses,\nwe have begun, and will continue to, (1) hire additional finance and accounting staff with qualifications and work experiences in U.S.\nGAAP and SEC reporting requirements to formalize and strengthen the key internal control over financial reporting. (2) establish\na more formalized, standardized, and structured monthly financial closing process, including defined responsibilities, closing timelines,\naccount reconciliation procedures, and review controls, (3) strengthen the monitoring and administration of bank accounts across our Company,\nand for dormant or inactive bank accounts, management will perform timely assessment, follow-up, and closure where appropriate¸(4)\nenhance our internal process over the establishment, change, and disclosure of group entities, and our Chief Financial Officer will be\nspecifically responsible for monitoring changes in our structure, including newly incorporated entities, acquisitions, disposals, ownership\nchanges, and dormant entities, and (5) establish a dedicated team led by our CEO to monitor the subsequent execution of the relevant purchase\ncontract, and closely follow up on the counterparty’s financial condition, delivery status, and performance progress, and will maintain\nactive communication with the supplier to facilitate timely delivery and successful implementation of the new MCN project.\n\n \n\n98\n\n \n\n \n\nWe\nintend to remediate the material weaknesses in multiple phases and expect that we will incur certain costs for implementing our remediation\nmeasures. However, we cannot assure you that we will remediate our material weaknesses in a timely manner. See “Item 3. Key Information-D.\nRisk Factors-Risks Related to Our Business and Industry-Material weaknesses in our internal control over financial reporting have been\nidentified, and if we fail to implement and maintain effective internal control over financial reporting, we may be unable to accurately\nreport our results of operations, meet our reporting obligations or prevent fraud.”\n\n \n\nSince\nwe qualified as a “non-accelerated filer” as defined in Rule 12b-2 under the Exchange Act as of December 31, 2025, this annual\nreport on Form 20-F does not include an attestation report of our independent registered public accounting firm.\n\n** **\n\n**Changes\nin Internal Control over Financial Reporting**\n\n \n\nOther\nthan as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered\nby this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control\nover financial reporting."}