Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 629

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 629
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 Company recorded a debt discount of $203,782, which represented
the fair value of the derivative liabilities at the commitment dates. In addition, the Company incurred $25,000 of professional fees directly
related to the issuances of the convertible notes which was recorded as debt issuance costs. The convertible notes had original maturities
at various times during 2022 and 2023, which all were extended into 2023. In December 2022, the Company repaid one convertible note with
a principal amount of $10,000 plus accrued interest.

During 2023, the Company exchanged, in a private
placement under Sections 3(a)(9) and 4(a)(2) of the Securities Act, 18 of the above convertible promissory notes, representing an
aggregate amount of principal and accrued interest of $598,836, for 591 shares of the Company’s series A preferred stock at an exchange
rate of $1,000 per share.

On the closing of the Company’s IPO on October
12, 2023, the Company repaid the principal and accrued interest of three of the remaining convertible notes totaling $94,433, and the
remaining convertible note with a principal balance plus accrued interest of $26,265 was converted into 6,566 shares of the Company’s
unregistered, restricted Common Stock based on the IPO price of $5.00.

F-25

Note 7 — Warrants

Warrants
are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s
Common Stock at a fixed price. The strike price of warrants granted in 2022 were set when the Company completed the IPO pricing agreement
with the Company’s underwriters on October 9, 2023, which was $5.00.

Warrants issued to two investors who loaned money
to the Company, Emmis Capital II, LLC and the Company’s CEO, Joseph La Rosa, on November 14, 2022 and December 2, 2022, respectively,
included full ratchet antidilutive protections. The original warrants each covered 50,000 shares at a strike price of $5.00. The February
20, 2024 debt raise transaction required the Company to issue a warrant to Alexander Capital with a strike price of $1.50 (the fair market
value of the Company’s common stock at the time of issuance). In accordance with the full r