Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 28

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 28
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 liability   (90,560,000)   -    Change in fair market value - extinguished warrants   9,200,000    83,100   Balance – June 30,  $-   $317,400  

Convertible Note

    Balance – January 1, 2025 
    $- 
  
    Issuance of Convertible Note(1) 
     33,000,000 
  
    Change in fair value of Convertible Note 
     (17,705,000)
  
    Balance – March 31, 2025 
     15,295,000 
  
    Change in fair value of Convertible Note 
     (2,818,000)
  
    Convertible Note Extinguished(2) 
     12,477,000 
  
    Issuance of Convertible Note(2) 
     8,364,000 
  
    Change in fair value of Convertible Note 
     (1,067,000)
  
    Balance – June 30, 2025 
     7,297,000 

The fair value of the derivative liability related
to the three eliminated Warrants, was computed using the Black-Scholes model both when issued and on the balance sheet date. To determine
the fair value, the Company incorporated transaction details such as the price of the Company’s common stock, contractual terms,
maturity, and risk-free rates, as well as assumptions about future financings, volatility, probability of contingencies, and holder behavior.
The fair value of the derivative liability on the issuance date and the balance sheet date and the assumptions used in the Black-Scholes
model are set forth in the table below.

    December 31, 

    2024 
  
    Weighted average fair value 
    $0.87 
  
    Dividend yield 
     — 
  
    Expected volatility factor 
     72.7%
  
    Risk-free interest rate 
     4.3%
  
    Expected life (in years) 
     5.5 

Contract Liabilities and Performance Obligations

Contract liabilities consist of unsatisfied performance
obligations related to annual dues received at the start of the calendar year. As of June 30, 2025, the Company has approximately $134
thousand of remaining performance obligations, all of which will be recognized into revenue by the end of the