Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 14

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 14
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ness,
pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors),
and general corporate purposes. See Note 5 – Borrowings for further discussion.

6

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated
Financial Statements

The Company is subject to the risks and challenges
associated with companies at a similar stage of development. These include dependence on key individuals, successful development and
marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore,
during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional
funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company
fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate
overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand,
and cash generated from operations, will not be sufficient to meet projected operating expenses through at least the next twelve months
from the issuance of these condensed consolidated financial statements. The Company will be required to raise additional capital to service
its debt and to fund ongoing operations.

The Company has incurred recurring net losses,
and the Company’s operations have not provided net-positive cash flows. In view of these matters, there is substantial doubt about
the Company’s ability to continue as a going concern. The Company plans on continuing to expand via acquisitions, which will help
achieve future profitability. Additionally, the Company has plans to raise capital from outside investors, as it has done in the past,
to fund operating losses and to provide capital for further business acquisitions. There can be no assurance the Company can successfully
raise the capital needed.

Fair Value Option of Accounting

The Company has elected the fair value option
under Accounting Standards Codification 825-10, Financial Instruments (“ASC 825”), to measure
its Senior Secured Convertible Note and Incremental Warrants (until the Incremental Warrants conversion to Series B Preferred Stock,
See Note 5 – Borrowings for further discussion) issued during the first quarter. The fair value option may be
elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. When the fair value option is
elected for