Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 614

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 614
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 Ended 

    December 31, 

    2024  
    2023 
  
    Revenue 
    $71,938,934  
    $69,988,585 
  
    Cost of revenue 
    $65,484,111  
    $63,914,041 
  
    Gross profit 
    $6,454,823  
    $6,074,544 

    Loss before provision for income taxes 
    $(14,499,740) 
    $(9,355,251)
  
    Loss per share of common stock attributable to common stockholders, basic and diluted 
    $(0.79) 
    $(0.74)
  
    Weighted average shares used in computing net loss per share of common stock attributable to common stockholders 
     19,976,390  
     12,660,886 

Note 4 — Goodwill and Intangible Assets

Goodwill represents the future economic benefits
arising from assets acquired in a business combination that are not individually identified and separately recognized. The Company recognized
goodwill for the first time in the fourth quarter of 2023; as such, the Company first tested for impairment in the fourth quarter of 2024
the results of which follow.

Impairment test

During the fiscal fourth quarter of 2024, we determined
that a triggering event occurred as a result of additional decline in operational estimates for franchises acquired, along with uncertainty
for projected cash flows, and also further decreases in our stock price. Therefore, we performed a quantitative impairment test as of
the first day of fiscal fourth quarter of 2024 for our reporting units with remaining goodwill.

The fair value of each reporting unit was estimated
using a weighing of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting
unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is
dependent on internally developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business,
estimation of the useful life over which cash flows will occur, and determination of our carrying value of equity for the reporting unit
being tested.

The combined fair values for all reporting
units were then reconciled to the aggregate market value of our shares of, common stock on the date of testing. Based on our most
recent impairment test, eight of our reporting units’ fair values were below their respective carrying values. An impairment