Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 2537

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 2537
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 when due, in which case the conversion price would be the lower of $2.50 or 85% of the lowest VWAP of the shares
prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes.

The Company evaluated the terms of the securities
purchase agreements and determined that the commitment shares and the first warrants were freestanding instruments. The Company determined
the commitment shares were to be classified as equity, which are initially recorded at fair value with no subsequent remeasurement. The
Company determined that the first warrants were classified as a derivative liability, which were initially recorded at fair value with
changes in fair value recorded in earnings. The second warrants and certain terms within the debt notes were contingent upon certain possible
events that were within the Company’s control. The Company determined that the contingencies were not probable and, as such, were
not recorded as contingent liabilities.

The Company incurred issuance costs that were
directly attributable to issuing the debt instruments in the amount of $346,248, which included placement fees of $202,518 paid to Alexander
Capital. Of the debt issuance costs, $326,879 was paid in cash and the remainder was the value of a warrant issued to Alexander Capital.
The Company determined that the warrant issued to Alexander Capital was classified as equity. The issuance costs were not specifically
related to any instrument within the transactions and, as such, were allocated in the same proportion as the proceeds were allocated to
each of the debt transactions, the committed shares, and the warrants.

On September 25, 2024, the Company entered into
an agreement to amend the three Senior Secured Promissory Notes entered into in February, April, and July of 2024. The amendment extended
the maturity date for all three notes to August 1, 2025, and delayed payments until February 1, 2025. In lieu of all payments required
under the original notes, $250,000 per month will be paid beginning February 1 and each month after, until all three notes were paid in
full. In addition, $200,000 was paid on September 30, 2024 and applied to the February note. This amendment was accounted for as an extinguishment
of debt, and the Company recorded a loss of $722,729. The Company had accrued interest on the notes totaling $264,490 as of December 31,
2024.

Notes Payable-Promissory Note