Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 218

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 3
Chunk 218
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 at the reasonable
assurance level. A material weakness is a deficiency, or combination of deficiencies, in our internal controls over financial reporting
such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented
or detected on a timely basis.

Our size has prevented us from being able to employ sufficient resources
to enable us to have an adequate level of supervision and segregation of duties. Therefore, it is difficult to effectively segregate accounting
duties which comprises a material weakness in internal controls. To the extent reasonably possible given our limited resources, we intend
to take measures to cure the weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to
ensure that accounting policies and procedures are consistent across the organization and that we have adequate controls over our Exchange
Act reporting disclosures. As such, we consider these material weaknesses to not be remediated as of March 31, 2025.

There were no changes in our internal control
over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended
March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

33

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company is involved in litigation,
claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not
limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, brokerage
or real estate disputes, or other consumer protection statutes, ordinary-course brokerage disputes like the failure to disclose property
defects, commission disputes, and vicarious liability based upon conduct of individuals or entities outside of the Company’s control,
including agents and third-party contractor agents. Litigation and other disputes are inherently unpredictable and subject to substantial
uncertainties and unfavorable resolutions could occur.

As previously disclosed, on February 13, 2023,
Mr. Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit
Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his
salary and failing to pay him his full severance payments and is looking for payment of