Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 2103

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 2103
---
 of the intangible
assets are amortized over the revised remaining useful life.

Business Combinations

The allocation of the purchase
price for acquisitions requires use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible
and intangible assets acquired, including franchise agreements, agent relationships, existing real estate listings, and non-compete agreements
and liabilities assumed based on their respective fair values. The estimates we make include expected cash flows, expected cost savings,
and the appropriate weighted average cost of capital. We complete these assessments as soon as practical after the acquisition closing
dates. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

Stock-Based Compensation

We use the fair value method
of accounting for our stock options and restricted stock units (“RSUs”) granted to employees, contractors and consultants
to measure the cost of services received in exchange for the stock-based awards. The fair value of stock option awards with only service
conditions is estimated on the grant date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires
inputs such as the risk-free interest rate, expected term and expected volatility. These inputs are subjective and generally require significant
judgment. The fair value of RSUs is measured on the grant date based on the prior day closing fair market value of our Common Stock. The
resulting cost is recognized over the period during which an employee is required to provide service in exchange for the awards, usually
the vesting period. Stock-based compensation expense is recognized on a straight-line basis, net of actual forfeitures in the period.

As we accumulate additional
employee stock-based awards data over time and as we incorporate market data related to our Common Stock, we may calculate significantly
different volatilities and expected lives, which could materially impact the valuation of our stock-based awards and the stock-based compensation
expense that we will recognize in future periods.

Income Taxes

We are subject to taxes in
the United States. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities
and any valuation allowance recorded against our net deferred tax assets. We make these estimates and judgments about our future taxable
income that are based on assumptions that are consistent with our future plans. Tax laws, regulations and administrative practices may
be subject to change due to economic or political conditions including fundamental changes to the tax laws. As of December 31, 2024, we
had recorded a full valuation allowance on