Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 36

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 36
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 Amendment No. 1 to the Initial Note to correct the maturity date to February 4, 2027 and amend the Alternate Conversion
Price to be the greater of (i) 95% of the lowest VWAP of the common stock of the Company during the seven (7) consecutive Trading Day
period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice
(as defined in the Initial Note) and (ii) the Floor Price (as defined in the Initial Note).

Upon the modification on June 26, 2025, the Company
evaluated the debt modification guidance, including the troubled debt restructuring guidance, determining that the modification of this
instrument for which the Company made a fair value option election pursuant to Subtopic 825-10 at inception, is not a troubled debt restructuring
and rather, an extinguishment of the existing Initial Note. The Company recorded a gain on debt extinguishment of $4,113,000, which pursuant
to ASC 470-50-40-2 for all extinguishments of debt, represents the difference between the reacquisition price (which includes any premium)
and the net carrying amount of the debt being extinguished (which includes any deferred debt issuance costs) should be recognized as a
gain or loss when the debt is extinguished. There were no deferred debt issuance costs as the Initial Note was accounted for under the
fair value option at issuance, and regarding the amendment, the Company incurred approximately $2,000 in costs, which were expensed in
the period incurred.

Cash
Advance Agreements

On February 5, 2025, the Company paid off their
Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance LLC (“Cedar”) in the amount of
$354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid off their other Standard Merchant Cash Advance
Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) in the amount of $340,421, resulting
in a loss on extinguishment of debt of $68,615. The final amortization of financing fees incurred for these MCA loans occurred in Q1 2025,
so for the nine months ended September of 2025, total fees were $63,160. Amortization of financing fees for Cedar for the three-and nine
months ended September 30, 2024 was $62,801. There was