Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 98

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 8
Chunk 98
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 Company’s unaudited
condensed consolidated statements of operations.

As a result of applying the fair value option, direct costs and
fees related to the Convertible Note were expensed as incurred and were not deferred.

The following table provides 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 February 4, 2025 and March 31, 2025:

    As of  
    As of 

    February 4, 2025  
    March 31, 2025 
  
    Convertible Note fair value 
    $33,000,000  
    $15,295,000 
  
    Convertible Note, contractual principal outstanding 
    $5,500,000  
    $5,500,000 
  
    Incremental Warrants 
    $100,800,000  
    $81,360,000 

The fair value of the Convertible Note was calculated
using a fair value analysis considering the following factors and assumptions:

    February 4, 2025(1)  
    March 31, 2025(1) 
  
    Stock Price 
    $0.40  
    $0.18 
  
    Conversion Price 
    $0.45  
    $0.45 
  
    Alternate Conversion Price 
    $.07912  
    $.07912 
  
    Alternate Conversion Amount 
     120.00% 
     120.00%
  
    Redemption Premium 
     120.00% 
     120.00%
  
    Interest Rate 
     12.00% 
     12.00%

(1)The fair value analysis of the convertible notes was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction.

The fair value of the Incremental Warrants were
calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies:

    February 4, 2025(1)  
    March 31, 2025(1) 
  
    Face Value 
    $2,500,000  
    $2,500,000