Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 158

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 158
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 Condensed Consolidated Financial Statements

Note
4 — Fair Value Measurements and Other Liabilities

Fair
Value Measurements

Fair
value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The Company classified certain liabilities based on the following fair value hierarchy:

    ●
    Level
    1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted
    assets or liabilities;

    ●
    Level
    2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and
    liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
    and

    ●
    Level
    3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A
financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the
fair value measurement. The Company has evaluated the estimated fair value of financial instruments using available market information
and valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant
effect on the estimated fair value amounts.

The
carrying amounts of financial instruments, including cash, restricted cash, accounts receivable, accounts payable, and accrued expenses
reflected in the condensed consolidated financial statements approximate fair value due to their short-term maturities.

The
Company determined that on December 31, 2024, certain instruments qualified as derivative liabilities and were recorded at fair value
on the date of issuance and re-measured at fair value for each subsequent reporting period with the change reported in earnings. There
were no derivative liabilities recorded as of September 30, 2025. See Note 7 – Equity Shares and Warrants for more information.

Securities
Purchase Agreement

On February
4, 2025, the Company entered into an SPA with an investor (“Investor”) for a Senior Secured Convertible Note (“Convertible
Note”) with a face value of $5,500,000 and 16 Incremental Warrants exercisable for a face amount of $2,500,000 each. See
Note 5 – Borrowings for further discussion.

15

La
Rosa Holdings Corp. and Subsidiaries

Notes
to the Unaudited Cond