Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 2158

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 2158
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 will be cancelled and extinguished if the note is fully paid on or before the note maturity date.

On July 15, 2024, the Company entered into a securities
purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company
issued two warrants, the first gives the investor the option to purchase 53,700 shares of the Company’s common stock with an exercise
price of $3.00, exercisable until the five-year anniversary of the closing date. The second warrant gives the investor the option to purchase
54,200 shares of the Company’s common stock with an exercise price of $2.25. The second warrant will only become exercisable if
the note is not fully paid on or before the maturity date, at which point the warrant is exercisable until the five-year anniversary of
the vesting date. The second warrant will be cancelled and extinguished if the note is fully paid on or before the note maturity date.

Under an agreement between the Company and the
Company’s underwriter, Alexander Capital, the Company issued a warrant to Alexander Capital as a result of the issuance of the promissory
note on February 20, 2024. The holder of the warrant has the right to purchase 21,053 shares of the Company’s common stock with
an exercise price of $1.50, exercisable until the five-year anniversary of the grant date.

During
the fiscal years ended December 31, 2024 and 2023, there was no unrecognized expense related to warrants. Unrecognized amortization of
financing fees related to warrants granted in 2022 totaled $149,995, all of which was recognized in 2023. There was no unrecognized amortization
of financing fees related to warrants in 2024.

The valuation methodology used to determine the
fair value of the warrants was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions
including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the warrant.

Estimated volatility is a measure of the amount
by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s
estimated volatility is an average of the historical volatility of peer entities over the shorter of i) the period equal to the expected
life of the award or ii) the period over which the peer