Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 32

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 32
---
26, 2025, the Company
evaluated the debt modification guidance, including the troubled debt restructuring guidance, determining that the modification of this
instrument for which the Company made a fair value option election pursuant to Subtopic 825-10 at inception, is not a troubled debt restructuring
and rather, an extinguishment of the existing Initial Note. The Company recorded a gain on debt extinguishment of $4,113,000, which pursuant
to ASC 470-50-40-2 for all extinguishments of debt, represents the difference between the reacquisition price (which includes any premium)
and the net carrying amount of the debt being extinguished (which includes any deferred debt issuance costs) should be recognized as
a gain or loss when the debt is extinguished. There were no deferred debt issuance costs as the Initial Note was accounted for under
the fair value option at issuance, and regarding the amendment, the Company incurred approximately $2,000 in costs, which were expensed
in the period incurred.

Cash Advance Agreements

On February 5, 2025, the Company paid off their
Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance LLC (“Cedar”) in the amount
of $354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid off their other Standard Merchant Cash Advance
Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) in the amount of $340,421, resulting
in a loss on extinguishment of debt of $68,615. The final amortization of financing fees incurred for these MCA loans occurred in Q1
2025, so for the six-months ended June of 2025, total fees were $63,160. Amortization of financing fees for Cedar for the three-and six-months
ended June 30, 2024 was $62,801. There was no amortization expense for Arin during the three or six-months ended June 30, 2024.  

Notes Payable-Senior Secured Promissory Notes

During the first quarter of 2025, the Company
repaid in full all outstanding senior secured promissory notes issued in 2024 to an accredited investor. On February 5, 2025, in connection
with the execution of the SPA, the Company paid the remaining principal and accrued interest on the third and final outstanding note,
there