Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 90

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 8
Chunk 90
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The Company is subject to the risks and challenges associated with
companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its
offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period
required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not
be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its
growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs
of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated
from operations, will not be sufficient to meet projected operating expenses through at least the next twelve months from the issuance
of these condensed consolidated financial statements. The Company will be required to raise additional capital to service its debt and
to fund ongoing operations.
 The Company has incurred recurring net losses, and the Company’s
operations have not provided net positive cash flows. In view of these matters, there is substantial doubt about the Company’s ability
to continue as a going concern. The Company plans on continuing to expand via acquisitions, which will help achieve future profitability.
Additionally, the Company has plans to raise capital from outside investors, as it has done in the past, to fund operating losses and
to provide capital for further business acquisitions. There can be no assurance the Company can successfully raise the capital needed.

Fair Value Option of Accounting

The Company has elected the option under Accounting Standards Codification 825-10, Financial
Instruments (“ASC 825”), to measure its short-term convertible note payable issued during the quarter at fair
value. The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date
occurs. When the fair value option is elected for an instrument, unrealized gains and losses for such instrument are reported
in earnings at each subsequent reporting date. Upfront costs and fees related to items for which the fair value option is elected
shall be recognized in earnings as incurred and not deferred. The Company also elected to measure the incremental warrants included in
the transaction under ASC 825.

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU, No