Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 44

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 44
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 the Company’s Common
Stock issued as consideration to be approximately $1.1 million. Just prior to their settlement and cancellation, the Company estimated
the fair value of the Warrants to be approximately $28.0 million. The fair value of the Warrants prior to cancellation was estimated
using the Black-Scholes valuation model with the following inputs: Company stock prices of $7.40 to $7.99; exercise prices of $0.135,
remaining term to maturity of 2.3 to 2.4 years, risk-free rates of 3.9% and stock price volatility of 65.0%.

As the difference between the
fair value of the Warrants settled ($28.0 million) and the fair value of the shares of Common Stock issued ($1.1 million) was favorable
to the Company, no recognition of this change is required in the Company’s condensed consolidated financial statements. 

Warrants
are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s
common stock at a fixed price. As of September 30, 2025, the Company’s stock price was $7.18.

During the first half of 2025, the Company settled
all vested and outstanding warrants previously held by the accredited investor holding the three senior secured notes payable from 2024.
Two of the three warrants were exercised on a cashless basis for a total of 10,974 shares of common stock which represented 1,392,198
warrants. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination
of all vested warrants (1,202,244 warrants) held by the investor as of March 31, 2025.

Warrants
issued to two investors who loaned money to the Company, Emmis Capital II, LLC and the Company’s CEO, Joseph La Rosa, on November
14, 2022 and December 2, 2022, respectively, included full ratchet antidilutive protections. The original warrants each covered 50,000
shares at a strike price of $5.00. By the end of 2024, due to various debt and equity transactions the new strike price on these warrants
became $0.37, resulting in the number of shares covered by each warrant to increase to 667,913, and a 2024 deemed dividend of $1