Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 24

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 24
---
 to market. The Company recognized a change in fair value of $9,200,000 measured as the difference between the fair value
of the Incremental Warrants at March 31, 2025, and their fair value of $90,560,000 immediately prior to the Exchange. The Series B Preferred
Stock issued to the Investor in satisfaction of the Incremental Warrants in the Exchange had an issuance date fair value of $8,261,000
based on the following assumptions:

    June 18, 

    2025 
  
    Stated Value 
    $6,000,000 
  
    Dividend Rate 
     0.0%
  
    Conversion Price 
    $20.00 
  
    Alternate Conversion Amount 
    $9.60 
  
    Required Premium 
     125.0%
  
    Stock Price 
    $10.40 
  
    VWAP 
    $10.40 

At the closing of the Exchange, the Company
recognized a gain on settlement of the Incremental Warrants of $82,299,000, measured as the difference between the adjusted fair
value of the Incremental Warrants immediately prior to the Exchange and the fair value of the Series B Preferred Stock at issuance,
net of par value. The Company evaluated the classification of its Series B Preferred Stock and concluded that it is more akin to
equity than debt and accounted for as permanent equity. Accordingly, the Series B Preferred Stock is presented within permanent equity in the accompanying condensed
consolidated financial statements. The shares were issued at their par value (rounded to $1) with the remaining fair value of the
Series B Preferred Stock in excess of par value, $8,260,999 being recorded to additional paid-in capital.

The following tables provide the fair value and
contractual principal balance outstanding on the Convertible Note and the Incremental Warrants accounted for under the fair value
option as of June 30 and June 18, 2025 or June 26, 2025, respectively:

    As of  
    As of 

    June 30,  
    June 26, 

    2025  
    2025 
  
    Convertible Note fair value 
     7,297,000  
     12,477,000 
  
    Convertible Note, contractual principal outstanding 
     5,500,000  
     5,500,000 

11