Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 13

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 13
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 condensed consolidated financial statements have been converted to the post-split
share amounts.

Accounts Receivable and Allowance for Credit
Losses

The Company’s trade accounts receivable
consist of balances due from agents, tenants, franchisees, and commissions for closings and are presented on the consolidated balance
sheets net of the allowance for credit losses. Management determines the allowance for expected credit losses based upon historical experiences
as well as current conditions that affect the collectability of the reported amount and regularly evaluates individual customer receivables
and considering financial condition, credit history, current economic conditions and other relevant factors, in setting specific reserves
for certain accounts. Receivables are written off once they are deemed uncollectible, which may arise when the debtor is deemed unable
to pay the amounts owed to the Company. The allowance for credit losses was $325,627 and $166,504 as of June 30, 2025 and December 31,
2024, respectively. Estimates of uncollectible accounts receivable are recorded to general and administrative expense.

The activity for the allowance for credit losses
during the six-months ended June 30, 2025 and 2024 is set forth in the table below:

    Balance at  
       
    Deductions  
    Balance at 

    Beginning of  
    Charged to  
    from the  
    End of 

    Period  
    Expenses  
    Allowance  
    Period 
  
    Six Months ended June 30, 2025 Allowance for Credit Losses 
    $166,504  
    $233,837  
    $(74,714) 
    $325,627 
  
    Six Months ended June 30, 2024 Allowance for Credit Losses 
    $83,456  
    $49,758  
    $(6,619) 
    $126,595 

Liquidity – Going Concern and Management’s
Plans

On June 30, 2025, the Company had a cash balance
of $5.1 million and positive working capital of $4.4 million.

On February 4, 2025 (the “Closing Date”),
the Company entered into a Securities Purchase Agreement (the “SPA”), with an institutional investor (the “Investor”)
in which the Company obtained gross proceeds of $4,963,750. The Company used $2.7 million of the proceeds to pay-off certain indebted