Quarterly Report for Quarter Ending March 31, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis and the unaudited interim financial statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on July 17, 2025.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design, and conduct of our ongoing and planned businesses, and objectives of management for future operations, future results of anticipated business development efforts, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "contemplate," "continue" "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," or "will" or the negative of these terms or other similar expressions. These forward-looking statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial and other trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties, and assumptions, including, without limitation, the risk factors described in our registration statement on Form S-1/A, filed with the SEC on June 3, 2021, in the section entitled "Risk Factors", which we strongly encourage investors to carefully read as these factors could, among other things, cause actual results to differ from these forward-looking statements. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Company Overview

Intelligent Hotel Group Ltd, formerly known as YCQH Agricultural Technology Co., Ltd, was incorporated under the laws of the State of Nevada on October 15, 2019. On May 6, 2025, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name to Intelligent Hotel Group Ltd (the "Name Change"), which was previously approved by the Board of Directors on April 15, 2025. To reflect the Name Change, the Board approved a corresponding amendment to the Company's bylaws on May 7, 2025.

The Company originally operated in the bio-carbon-based fertilizer ("BCBF") trading business, sourcing products directly from producers in China and selling them to customers primarily located in the People's Republic of China. The Company did not own or operate any production facilities or manufacturing equipment for BCBF products. On July 25, 2022, the Company ventured into online retailing business through e-commerce platform, retailing a series of daily use products covering from healthcare products, cosmetic products, fashion products, household products and so forth. On April 19, 2023, the Company ventured into beauty products trading business which includes retail sale to customer mainly based in People Republic of China, sourcing directly from producers in China.

As of the date of this report, the Company has ceased all operations related to the BCBF, online retailing business, and beauty products trading business. In light of this transition, the Company is actively evaluating potential acquisition targets and strategic business opportunities in order to identify a new direction that aligns with its long-term growth objectives. The Company's current strategy is to reposition itself by identifying and acquiring or partnering with a target business that offers sustainable value and future expansion potential.

Results of operations

Three months ended March 31, 2025 and 2024

The following table summarizes our result of operations for the periods presented:

		Three months ended March 31,
		2025				2024 (Restated)				Change (Restated)
BCBF Business Sales Revenue		$	-			$	-
Percentage towards Total Revenue			-				-
Online Business Revenue, net		$	-			$	242,721				(242,721	)
Percentage towards Total Revenue			-				100	%
Beauty Products Business Sales Revenue		$	-			$	-
Percentage towards Total Revenue			-				-	%
Total Revenue		$				$	242,721				(242,721	)
BCBF Business Cost of Sales			-				-
Online Business Cost of Sales			-				(66,371	)			66,371
Beauty Products Business Cost of Sales			-				-
Total Cost of Sales		$	-			$	(66,371	)			66,371
BCBF Business Gross Profit			-				-
Online Business Gross Profit			-				176,350				(176,350	)
Beauty Products Business Gross Profit			-				-
Total Gross Profit		$	-			$	176,350				(176,350	)
Gross Profit Margin			-				73	%
BCBF Business Gross Profit Margin			-				-	%
Online Business Gross Profit Margin			-				73	%
Beauty Products Business Gross Profit Margin			-				-	%

Revenue

For the three months ended March 31, 2025, the Company generated total revenue of $0, compared to a total revenue of $242,721 for the three months ended March 31, 2024. The decline was primarily attributable to the suspension of the Company's all three business segments, including BCBF trading, online product resale, and beauty product resale businesses.

Cost of Revenue

Cost of revenue was $0 for the three months ended March 31, 2025, compared to $66,371 for the corresponding period in 2024. The decrease reflects reduced customer demand resulting from the discontinuation of the Company's all lines of business.

Gross Profit

Gross profit was $0 for the three months ended March 31, 2025, compared to $176,350 for the same period in 2024, representing a gross margin of 73% in the prior year.

General and administrative expenses

General and administrative expenses were $6,940 for the three months ended March 31, 2025, compared to $66,991 for the same period in 2024. These expenses primarily consist of salaries and related social contributions, lease payments, travel and advertising expenses, and audit fees. The decrease was mainly due to reductions in personnel costs and lease-related expenses, consistent with the lack of business operations during the current period.

Operating Income (Loss)

For the three months ended March 31, 2025, the Company incurred an operating loss of $6,934, compared to an operating profit of $106,920 for the same period in 2024.

Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, the Company had available cash of $3,073 and $29,825, respectively.

The decrease in cash was primarily attributable to the cessation of our online retail business, which previously served as the primary source of operating revenue and cash inflows. During the three months ended March 31, 2025, the Company did not generate any revenue and relied on limited internal cash reserves to fund ongoing administrative expenses, resulting in a net cash outflow for the period.

As a holding company, we currently do not engage in material revenue-generating activities at the parent company level. Our historical liquidity was primarily supported by proceeds from sales in our online retail business conducted through subsidiaries. With the discontinuation of those operations, we no longer expect to receive material cash inflows from such activities unless and until we identify and execute a new operating strategy or revenue source.

The Company has not established credit facilities, and we have not participated in supply chain financing, factoring arrangements, or similar instruments. Our cash needs have been modest and primarily limited to administrative expenses, including professional services, audit fees, and minimal personnel-related costs.

As of March 31, 2025, the Company had no material accounts receivable, inventory, or outstanding debt obligations. We continue to assess our working capital position and cash needs on a regular basis.

Absent the development of new revenue-generating operations or additional financing, the Company may need to seek external funding through equity issuances, loans from affiliates, or other capital raising activities in the near term to support ongoing operations.

Our ability to continue as a going concern is dependent on our ability to secure adequate financing or otherwise develop a sustainable business model. We are currently exploring strategic alternatives, including potential acquisitions, business combinations, or new commercial ventures.

The following table summarizes our cash flow during the three months period ended March 31, 2025 and 2024:

		Three months ended March 31,
		2025				2024
Net cash (used in) operating activities		$	(27,368)			$	119,013
Net cash (used in) investing activities			-				-
Net cash (used in)/provided by financing activities		$	(1,441)			$	(83,193)

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Cash Used In Operating Activities

For the three months ended March 31, 2025, the Company used $27,368 in operating activities. The cash outflows were primarily driven by a reduction in prepayments and other receivables.

For the three months ended March 31, 2024, the Company generate $119,013 by operating activity, of which primarily consist of increase in prepayment, deposits and other receivables, increase in inventories, decrease in deferred revenue and reduction in lease liability contra by net profit, amortization, increase in account payables and increase in other payables and accrued liabilities.

Cash Used In Investing Activities

For the three months ended March 31, 2025 and 2024, the Company did not generate nor used any cash in investing activities.

Cash Used in/Provided by Financing Activities

For the three months ended March 31, 2025, the Company used $1,441 in financing activities, representing repayment of amounts due to a director.

For the three months ended March 31, 2024, cash used in financing activities amounted to $83,193, representing repayment of amounts due to a director.

Capital Requirements

We intend to fund our capital requirements through a combination of cash on hand and cash flows generated from our daily operations.

Foreign Currency

Most of our revenues and operating expenses are denominated in Chinese Yuan, or Renminbi. The Renminbi is currently freely convertible under the "current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans. Under our current corporate structure, our company in the United States may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.

Under existing PRC foreign exchange regulations, payments of current account items, including payment of dividends, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Our PRC subsidiaries may also retain foreign exchange in its current account, subject to a ceiling approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, we cannot assure you that the relevant PRC governmental authorities will not limit or eliminate our ability to purchase and retain foreign currencies in the future.

Since a significant amount of our future revenues will be denominated in Renminbi, the existing and any future restrictions on currency exchange may limit our ability to utilize revenues generated in Renminbi to fund our business activities outside China, if any, or expenditures denominated in foreign currencies.

Foreign exchange transactions under the capital account are subject to limitations and require registration with or approval by the relevant PRC governmental authorities. In particular, any transfer of funds from us to any of our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, is subject to certain statutory limit requirements and registration or approval of the relevant PRC governmental authorities, including the relevant administration of foreign exchange and/or the relevant examining and approval authority. Our ability to use the U.S. dollar proceeds of the sale of our equity or debt to finance our business activities conducted through our PRC subsidiaries will depend on our ability to obtain these governmental registrations or approvals. In addition, because of the regulatory issues related to foreign currency loans to, and foreign investment in, domestic PRC enterprises, we may not be able to finance the operations of our PRC subsidiaries by loans or capital contributions. We cannot assure you that we can obtain these governmental registrations or approvals on a timely basis, if at all.

The amount of cash denominated in RMB is approximately CNY15,065 (approximately $2,099) as of March 31, 2025.

Off-balance Sheet Commitments and Arrangements

As of March 31, 2025, we have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders' equity, or that are not reflected in our consolidated financial statements.

Critical Accounting Policies

We prepare our financial statements in conformity with accounting principles generally accepted by the United States of America ("U.S. GAAP"), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

We believe that our accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. Accordingly, the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations are summarized in "Note 3-Summary of Significant Accounting Policies" in the notes to our unaudited condensed consolidated financial statements.

GOING CONCERN UNCERTAINTIES

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company is currently in a net liability position and incurred a net cash used in operating activities of $27,368 for the three months ended March 31, 2025 resulting in accumulated deficit of $446,207 and a working capital deficit of $286,575.

The Company's cash position may not be significant enough to support the Company's daily operations. While the Company believes in the viability of its strategy and in its ability to raise additional funds, there can be no assurances to that effect. The Company's ability to continue as a going concern is dependent upon its ability to improve profitability and the ability to acquire funding through public offering. If funding from public offering is insufficient, then the Company shall rely on the financial support from its controlling shareholder.

These and other factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that financial statements are issued. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

Recent accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under this ASU, public entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU's amendments are effective for all entities that are subject to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect the impact of the adoption of the guidance to be material on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). This update requires entities to include more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, in commonly presented expense captions such as cost of sales, research and development, and selling, general and administrative expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company does not expect the impact of the adoption of the guidance to be material on its financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which focuses on improving reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. A public entity shall disclose for each reportable segment the significant expense categories and amounts that are regularly provided to the CODM and included in reported segment profit or loss. ASU 2023- 07 also requires public entities to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. Entities are permitted to disclose more than one measure of a segment's profit or loss if such measures are used by the CODM to allocate resources and assess performance, as long as at least one of those measures is determined in a way that is most consistent with the measurement principles used to measure the corresponding amounts in the consolidated financial statements. ASU 2023-07 is applied retrospectively to all periods presented in financial statements, unless it is impracticable. The Company adopted this standard in 2024 for annual period disclosures. See Note 13 "Segment Reporting" in the accompanying notes to the consolidated financial statements for further detail.

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements.

Emerging Growth Company and Smaller Reporting Company Status

As an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we can take advantage of an extended transition period for complying with new or revised accounting standards. This period allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We also intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley.

We will remain an emerging growth company until the earliest of (i) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, (ii) the first fiscal year after our annual gross revenues exceed $1.235 billion, (iii) the date on which we have, during the immediately preceding three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year.

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.