Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 181

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 2
Chunk 181
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inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023, while these and other
plaintiffs have filed similar lawsuits against a number of other large real estate brokerage companies. We have not, as of the date hereof,
been named as a defendant in any antitrust litigation. On or about March 15, 2024, NAR agreed to settle these lawsuits, by agreeing to
pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. This settlement resolves
claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations; all association-owned MLSs;
and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below and is subject
to court approval. Due to this litigation, there will be rule changes for the NAR. In the settlement, effective mid-July 2024, NAR has
agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements
between buyers and buyers’ agents. However, the direct and indirect effects, if any, of the judgment upon the real estate industry
are not yet entirely clear.

There could also be further
changes in real estate industry practices. All of this has prompted discussion of changes to rules established by local or state real
estate boards or multiple listing services. All of this may require changes to many brokers’ business models, including changes
in agent and broker compensation. For example, we will likely have to develop mechanisms and a plan that enable buyers and sellers to
negotiate commissions. The Company will continue to monitor ongoing and similar antitrust litigation against our competitors. However,
the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect
on us as an industry participant.

Cybersecurity

Our business faces cybersecurity risks that could
have a material adverse effect on our business operations, financial condition, and reputation. Key factors contributing to cybersecurity
risks include, but are not limited to:

●Constantly
Evolving Threat Landscape: The landscape of cybersecurity threats is constantly evolving, with new attack vectors, malware, and vulnerabilities
emerging regularly. We may not be able to anticipate or mitigate all potential threats effectively.

●Data
Vulnerability: We collect, store, and process sensitive customer and corporate data, making