Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1476

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 1476
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 good or service to the customer. The transaction price of a contract
is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance
obligation. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects
the consideration the Company expects to receive in exchange for those goods or services.

Real Estate Brokerage Services (Residential
and Commercial)

The Company serves as a licensed broker
in the areas in which it operates for the purpose of processing residential real estate transactions. Revenue from real estate brokerage
services (residential) mainly consists of commissions generated from real estate brokerage services. The Company is contractually obligated
to provide for the fulfillment of transfers of real estate between buyers and sellers. The Company provides these services itself and
controls the services of its agents necessary to legally transfer the real estate. Consequently, the Company is defined as the principal
in the transaction. The Company, as principal, satisfies its obligation upon the closing of a real estate transaction. The Company has
concluded that agents are not employees of the Company, rather deemed to be independent contractors. Upon satisfaction of its obligation,
the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The transaction price is calculated by
applying the Company’s portion of the agreed-upon commission rate to the property’s selling price. The Company may provide
services to the buyer, seller, or both parties to a transaction. In instances in which the Company represents both the buyer and the seller
in a transaction, it recognizes the full commission on the transaction. Commissions revenue contains a single performance obligation that
is satisfied upon the closing of a real estate transaction, at which point the entire transaction price is earned. The Company’s
customers remit payment for the Company’s services to the title company or attorney closing the sale of property at the time of
closing. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for
unsuccessful transactions, even if services have been provided. In addition to commission, revenue from real estate brokerage services
(residential) consists of annual and monthly dues charged to the agents for providing systems, accounting, marketing tools and compliance
services. The annual and monthly dues are recognized each month as services are provided.

Franchising Services

The Company’s franchise agreements
offer the following benefits to the franchisee: common use and promotion of La Rosa Realty trademark; distinctive sales and