Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 176

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 176
---
5, the Company entered into two warrant exchange agreements (the “Exchange Agreements”) with two holders of previously
issued equity-classified warrants to purchase shares of the Company’s Common Stock (one Exchange Agreement was entered into with
the Company’s Chief Executive Officer. The terms of the Exchange Agreement provided each holder with 75,000 newly issued shares
of the Company’s Common Stock, in exchange for the settlement and cancellation of their outstanding warrants. As of the dates of
the Exchange Agreements, the outstanding warrants provided the holders with the right to purchase an aggregate of 3,703,704 shares of
the Company’s Common Stock at a per share exercise price of $0.135.

Upon
the respective settlement dates in July 2025, the Company measured the fair value of the newly issued shares of 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