Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 99

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 99
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 which the Company issued to the Investor:
(i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial
Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original
principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (“Incremental
Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for
the Initial Note and Incremental Warrants was $4,963,750.

The
$4,963,750 in gross proceeds of which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of
$3,408,585. Remaining funds from the offering was used by the Company to pay-off certain indebtedness of the Company, pay certain outstanding
fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), acquisitions and general
corporate purposes. Of the proceeds from the offering, $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant
cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant
cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured
promissory notes with an accredited investor. See Note 5 – Borrowings for further discussion to the accompanying condensed
consolidated financial statements for further disclosure.

In addition to the debt pay downs during the
nine months ended September 30, 2025, the Company eliminated all warrants tied to the investor senior secured promissory notes outstanding
as of December 31,2024. Two of the three warrants were exercised on a cashless basis, with the third warrant being bought back by the
Company in the amount of $379,083, fully eliminating these unfavorable ratchet warrants.

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