Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 163

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 163
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2  
    Level 3  
    Total 
  
    Liabilities 

    Derivative liabilities 
    $-  
    $-  
    $-  
    $- 
  
    Convertible note 
    $-  
    $-  
    $7,958,504  
    $7,958,504 

    As of December 31, 2024 

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Liabilities 

    Derivative liabilities 
    $-  
    $-  
    $1,607,544  
    $1,607,544 

17

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

At
December 31, 2024, the estimated fair value of the derivative liability tied to the three vested warrants held by an institutional investor
and remeasured on a recurring basis amounted to $1,607,544.

As of September 30, 2025, warrants held by an
institutional investor were eliminated through exercising and a redemption and cancellation agreement for $379,083. The Company recorded
a derivative liability related to the Incremental Warrants issued in connection with the SPA dated February 4, 2025. The Incremental Warrants’
fair value at date of issuance was $100,800,000 and were settled by June 30, 2025, with a gain recorded of $82,299,000. The initial analysis
assumes immediate conversion upon issuance and does not incorporate ownership limitations or conversion blockers that could otherwise
restrict full exercise or conversion. On June 26, 2025, the Company determined that modifications of the existing Senior Secured
Convertible Note during the quarter qualified as an extinguishment. 

The following tables provide a summary of changes
in fair value associated with the Level 3 liabilities for the nine months periods ended September 30, 2025 and 2024:

Derivative
liabilities

    2025  
    2024 
  
    Balance – January 1, 
    $1,607,544  
    $- 
  
    Issuance of derivative liability 
     100,800,000  
     117,300 
  
    Cash paid to settle derivative liability 
     (379,083)