{"url_path":"/sec/adsew/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":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1879248/0001213900-26-057891-index.html","accession_number":"0001213900-26-057891","cik":"0001879248","ticker":"ADSE","issuer_name":"Ads-Tec Energy Public Ltd Co","edgar_url":"https://www.sec.gov/Archives/edgar/data/1879248/0001213900-26-057891-index.html","primary_entity_key":"0001879248","primary_entity_name":"Ads-Tec Energy Public Ltd Co"},"word_count":2269,"has_tables":true,"body_markdown":"**ITEM 15. CONTROLS AND PROCEDURES**\n\n** **\n\n**A. Disclosure Controls and Procedures**\n\n \n\nManagement, with the participation\nof ADSE’s Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), evaluated the effectiveness\nof our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined\nin Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls\nand other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that\nit files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s\nrules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information\nrequired to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to\nthe company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions\nregarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, have\ninherent limitations and can provide only reasonable assurance of achieving their objectives.\n\n \n\nBased on the evaluation performed\nas of December 31, 2025, as a result of the material weaknesses in internal control over financial reporting that are described below\nin Management’s Report on Internal Control Over Financial Reporting, our Chief Executive Officer and Chief Financial Officer determined\nthat our disclosure controls and procedures were not effective as of such date.\n\n \n\n**B. Management’s Annual Report on Internal\nControl over Financial Reporting**\n\n \n\nOur management is responsible\nfor establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under\nthe Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability\nof financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of its inherent\nlimitations, internal control over financial reporting may not prevent or detect misstatements. However, these inherent limitations are\nknown features of the financial reporting process. Therefore, it is possible to design safeguards into the process to reduce, though not\neliminate, this risk.\n\n \n\nA company’s internal\ncontrol over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable\ndetail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance\nthat transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and\nexpenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3)\nprovide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s\nassets that could have a material effect on the financial statements. A material weakness is a deficiency, or a combination of deficiencies,\nin internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual financial\nstatements will not be prevented or detected on a timely basis.\n\n \n\n97\n\n \n\n \n\nUnder the supervision and\nwith the participation of management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness\nof the Company’s internal control over financial reporting as of December 31, 2025, based on criteria for effective internal control\nover financial reporting established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations\nof the Treadway Commission (“COSO”). Based on this evaluation, management concluded that our internal control over\nfinancial reporting was not effective as of December 31, 2025, due to the material weaknesses described below.\n\n \n\nManagement has determined\nthat the company had the following material weaknesses in its internal control over financial reporting:\n\n \n\n*Control Environment, Risk\nAssessment, and Monitoring*\n\n \n\nWe did not maintain appropriately\ndesigned entity-level controls impacting the control environment, risk assessment procedures, and effective monitoring controls to prevent\nor detect material misstatements to the consolidated financial statements. There is a general deficiency in that there is insufficient\nor incomplete documentation of risk assessment, process narratives and descriptions of key controls the Company relies on to establish\nand maintain an effective internal control over financial reporting. ADSE partially relies on third party service providers and/or shared\nservice centers to perform bookkeeping and certain external reporting services. For bookkeeping, the external services provided by third\nparties have been reduced significantly by the transfer and integration of employees to ADSE . The Head of Finance and Accounting periodically\nreviews the external service providers through the established monitoring and controls of outsourced activities.\n\n \n\nThe material weaknesses relate\nto (i) lack of consistent and proper application of accounting processes and procedures, defined control processes and segregation of\nduties, (ii) insufficient design, implementation and operating effectiveness of information technology general controls for information\nsystems that are significant to the preparation of our financial statements, (iii) lack of review and supervision (iv) insufficient resources\nwith an appropriate level of technical accounting and SEC reporting expertise and (v) lack of sufficient and appropriate resources within\nADSE to properly monitor and review the work performed by third parties and/or shared service centers, including the outsourced IT systems.\n\n \n\nThese deficiencies were attributed\nto (i) insufficient number of qualified resources and inadequate oversight and accountability over the performance of controls, (ii) ineffective\nidentification and assessment of risks impacting internal control over financial reporting, and (iii) ineffective evaluation and determination\nas to whether the components of internal control were present and functioning.\n\n \n\n*Control Activities, and\nInformation and Communication*\n\n \n\nThese material weaknesses\ncontributed to the following additional material weaknesses within certain business processes and the information technology environment\n(i) there is a lack of formal process for review procedures in place, and moreover a lack of evidence maintained and saved for management\nreview controls being performed, (ii) we identified but did not yet document and implement formal accounting policies, procedures and\ncontrols across substantially all of the Company’s business processes to achieve timely, complete, accurate financial accounting,\nreporting, and disclosures. Additionally, we designed but did not yet implement adequate comprehensive controls maintained at the corporate\nlevel which are at a sufficient level of precision to provide for the appropriate level of oversight of business process activities, corresponding\nrisks and related controls, (iii) we designed but did not appropriately implement management review controls at a sufficient level of\nprecision around complex accounting areas and disclosure, (iv) control owners don’t perform test work to confirm completeness and\naccuracy of the key reports, spreadsheets and queries they used in their control activities, (v) we did not appropriately design and implement\ncontrols over the existence and completeness of inventory stored at third party warehouses or suppliers.\n\n \n\nAccordingly, management has\nconcluded that these control deficiencies constitute material weaknesses.\n\n \n\n*Remediation Activities*\n\n \n\nWe are constantly and ongoing\nin the process of designing and implementing measures to improve our internal control over financial reporting to remediate the material\nweaknesses, including improving and implementing new information technology and systems for the preparation of the financial statements,\nimplementing additional review procedures within our accounting and finance department, monitoring our financial schedules more closely,\nintroducing further standard operating procedures, hiring additional staff and engaging external accounting experts to support improving\nour accounting processes and procedures and supplement our internal resources in our computation processes.\n\n \n\n98\n\n \n\n \n\nOur internal control remediation\nefforts include the following (i) we continue to formalize the design of certain accounting and information technology policies relating\nto security and change management controls, (ii) we hired additional qualified resources to segregate key functions within our financial\nand information technology processes supporting our internal controls over financial reporting (e.g. order-to-cash and accounts receivables),\n(iii) we have engaged an outside firm to assist management with (a) reviewing our current processes, procedures, and systems and assessing\nthe design of controls to identify opportunities to enhance the design of controls that would address relevant risks identified by management,\nand (b) enhancing and implementing protocols to retain sufficient documentary evidence of operating effectiveness of such controls.\n\n \n\nIn December 2023 we started\na comprehensive project to further develop our governance, risk and compliance (“GRC”) program, with support from external\nadvisors.\n\n \n\nDuring Phase 1 we:\n\n \n\n●\nevaluated\nour governance, risk management, compliance management and internal control management systems \n\n   \n\n●updated key GRC policies and procedures\n\n   \n\n●developed our internal delegation of authorities\n(“DoA”) and signature policy\n\n   \n\n●advanced our risk management system, including\nupdates to our risk category catalogue according to the COSO framework, and conducted workshops with our departments to identify, assess\nand mitigate risks.\n\n   \n\n●updated the GRC training curriculum and introduced\nnew training modules regarding compliance and IT security.\n\n   \n\n●updated our whistleblower policy and integrated\na new whistleblower reporting system and process.\n\n \n\nDuring Phase 2 we:\n\n \n\n●reshaped the internal decision-making matrix\nin relation to the delegation of authorities and made an implementation plan\n\n   \n\n●detailed the risk catalog with respective risk\nmitigation measures\n\n   \n\n●determined the entity level controls and IT general\ncontrols\n\n   \n\n●created risk control matrices, identified the\nexpected risk factors and aligned with the process owners for each company\n\n   \n\n●conducted workshops with the process owners in\npreparation of the rollout of the management controls, test and documentation as well as the GRC policy\n\n   \n\nFurthermore, we\n\n \n\n●enhanced and established further compliance awareness\nand trainings for all employees\n\n   \n\n●reviewed and updated most of the corporate guidelines\nand policies.\n\n \n\nIn addition to implementing\nand refining the above activities, we are taking further remediation activities in “Phase 3”, including (i) the continuous\nimprovement and formalization of our corporate governance, accounting, business operations, and information technology policies, procedures,\nand controls to achieve complete, accurate, and timely financial accounting, reporting and disclosures, (ii) the revision and redesign\nof the company level controls in accordance with ICFR requirements and to achieve effectiveness, (iii) the establishment of effective\ngeneral controls over systems to ensure that our automated process level controls and information produced and maintained in our IT systems\nare relevant and reliable, (iv) (v) the enhancement of policies and procedures to retain adequate documentary evidence for certain management\nreview controls over certain business processes including precision of review and evidence of review procedures performed to demonstrate\neffective operation of such controls, (vi) the monitoring of controls and protocols that will allow us to timely assess the design and\nthe operating effectiveness of controls over financial reporting and make necessary changes to the design of controls, if any. The above-mentioned\nactivities for ICFR development and implementation are carried out in alignment with the go-live of our ERP system SAP S4 Hana in January\n2026.\n\n \n\n99\n\n \n\n \n\nWhile these actions and planned\nactions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness\nof internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal\ncontrol over financial reporting and will continue to diligently review our internal control over financial reporting. These remediation\nmeasures, which continue as of December 31, 2025 have been time consuming and costly and there is no assurance that these initiatives\nwill remediate all issues.\n\n \n\nWhile we are designing and\nimplementing measures to remediate the material weaknesses, we cannot predict the success of such measures or the outcome of our assessment\nof these measures at this time, and we cannot assure you that we will be able to fully remediate our material weakness in the future.\n\n \n\nWe do not expect that our\ninternal controls over financial reporting will prevent all errors and all instances of fraud. Internal controls over financial reporting,\nno matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure\ncontrols and procedures are met. Further, the design of internal controls over financial reporting must reflect the fact that there are\nresource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all internal\ncontrols over financial reporting, no evaluation of internal controls over financial reporting can provide absolute assurance that we\nhave detected all our control deficiencies and instances of fraud, if any. The design of internal controls over financial reporting also\nis based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed\nin achieving its stated goals under all potential future conditions.\n\n** **\n\n**C. Attestation Report of the Registered\nPublic Accounting Firm**\n\n \n\nThis Annual Report does not\ninclude an attestation report of our independent registered public accounting firm regarding internal control over financial reporting\nas such report is not required for emerging growth companies.**  **\n\n \n\n**D. Changes in Internal Control over Financial Reporting**\n\n \n\nThere were no changes in our\ninternal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the\nfiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control\nover financial reporting. In light of the material weaknesses in our internal control over financial reporting identified in this Annual\nReport, we plan to adopt a number of measures to remedy the underlying causes of the material weaknesses, as discussed under the heading\n“Controls and Procedures - Management’s Annual Report on Internal Controls Over Financial Reporting” above. Measures\nthat we initiated in 2023 through 2025 currently remain in progress. We cannot guarantee that the measures we plan to take or may take\nin the future will be sufficient to remediate our material weaknesses in internal control over financial reporting or that they will prevent\nor avoid potential future material weaknesses."}