To the Shareholders of YoloCard Precision Information Engineering Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory requirements (hereinafter referred to as the "Enterprise Internal Control Norms System"), and combined with YoloCard Precision Information Engineering Co., Ltd.'s (hereinafter referred to as the "Company") internal control system and evaluation methods, based on daily supervision and special supervision of internal controls, the Company's Board of Directors has evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the "Internal Control Evaluation Basis Date").
I. Important Statement
In accordance with the requirements of the Enterprise Internal Control Norms System, establishing and improving a sound and effectively implemented internal control system, evaluating its effectiveness, and truthfully disclosing the internal control evaluation report are the responsibilities of the Company's Board of Directors. The Audit Committee of the Board of Directors supervises the establishment and implementation of internal controls by the Board. The operating management is responsible for organizing and leading the daily operation of the Company's internal controls.
The Company's Board of Directors and its directors and senior management guarantee that the content of this report contains no false records, misleading statements, or major omissions, and they shall bear individual and joint legal responsibility for the authenticity, accuracy, and completeness of the report's content.
The objective of the Company's internal control is to reasonably ensure that business operations are legal and compliant, assets are safe, financial reports and related information are true and complete, operating efficiency and effectiveness are improved, and development strategies are achieved. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving these objectives. Furthermore, changes in circumstances may render internal controls inappropriate, or reduce the degree of compliance with control policies and procedures. Therefore, there is a certain risk in inferring the future effectiveness of internal controls based on the results of the internal control evaluation.
II. Conclusion of Internal Control Evaluation
Based on the identification of material weaknesses in financial reporting internal controls, as of the Internal Control Evaluation Basis Date, there were no material weaknesses in financial reporting internal controls. The Board of Directors believes that the Company has maintained effective financial reporting internal controls in all material aspects in accordance with the requirements of the Enterprise Internal Control Norms System and relevant regulations.
Based on the identification of material weaknesses in non-financial reporting internal controls, as of the Internal Control Evaluation Basis Date, the Company has not found any material weaknesses in non-financial reporting internal controls.
No factors have occurred between the Internal Control Evaluation Basis Date and the issuance date of this Internal Control Evaluation Report that affect the conclusion of the internal control effectiveness evaluation.
III. Internal Control Evaluation Work
(I) Objectives of the Company's Internal Control System
The objectives of the Company in designing and establishing its internal control system are: to achieve the Company's strategic objectives; improve operating efficiency and economic benefits; ensure the truthfulness, reliability, and completeness of financial reports and management information; ensure the implementation of national laws, regulations, and the Company's internal rules and regulations; plug loopholes, eliminate hidden dangers, and ensure the safety and completeness of the Company's assets; and timely disclose information that should be disclosed to the public in accordance with regulations.
(II) Principles of Internal Control Compliance
1. Comprehensiveness Principle Internal control should permeate the entire process of decision-making, execution, and supervision, covering all types of businesses and matters of the Company and its subsidiaries.