Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 29

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 29
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 calendar year. The Company
has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or
less.

13

La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements

Note 5 — Borrowings

Line of Credit 

The Company has a line of credit with Regions
Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On
June 30, 2025, the outstanding balance on the line of credit was $2,332 at a prime rate of 7.50% plus 4.75%, or 12.25%. On December 31,
2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75% plus 4.75%, or 12.50%. The line of credit is
collateralized by Company assets. The interest expense incurred for the line of credit was $2,380 and $6,873 for the three-months and
six-months ended June 30, 2025, respectively. No amount was drawn on the facility during the first six months of 2024.

Security Purchase Agreement

On February 4, 2025, the Company and an Investor
entered into the SPA, pursuant to which the Company issued to the Investor on such date: (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 (the “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
Initial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in
arrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. The interest expense