Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 165

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 165
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. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements

The
fair value of the derivative liability related to the three eliminated Warrants, was computed using the Black-Scholes model both when
issued and on the balance sheet date. To determine the fair value, the Company incorporated transaction details such as the price of
the Company’s common stock, contractual terms, maturity, and risk-free rates, as well as assumptions about future financings, volatility,
probability of contingencies, and holder behavior. The fair value of the derivative liability on the issuance date and the balance sheet
date and the assumptions used in the Black-Scholes model are set forth in the table below.

    December 31, 

    2024 
  
    Weighted average fair value 
    $0.87 
  
    Dividend yield 
     — 
  
    Expected volatility factor 
     72.7%
  
    Risk-free interest rate 
     4.3%
  
    Expected life (in years) 
     5.5 

Contract
Liabilities and Performance Obligations

Contract
liabilities consist of unsatisfied performance obligations related to annual dues received at the start of the calendar year. As of September
30, 2025, the Company has approximately $72 thousand of remaining performance obligations, all of which will be recognized into revenue
by the end of the calendar year. The Company has elected to exclude disclosures regarding remaining performance obligations that have
an original expected duration of one year or less.

Note
5 — Borrowings

Line
of Credit 

The Company has a line of credit with Regions
Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On
September 30, 2025, the outstanding balance on the line of credit was $0 at a prime rate of 7.5% plus 4.75%, or 12.25%. On December 31,
2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75% plus 4.75%, or 12.50%. The line of credit is
collateralized by Company assets. The interest expense incurred for the line of credit was $25 and $6,898 for the three months and nine
months ended September 30, 2025, respectively and