Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 378

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 378
---
 the real estate transaction, when the title insurance policy is
issued and the performance obligation is satisfied. Fees for title searches, escrow services, and other related services are recognized
as the services are performed. Any advance payments received are recorded as deferred revenue until the related services are completed.

See Note 12 — Segments for additional information
on revenue from contracts with customers.

Cost of Revenue

Cost of revenue consists primarily of agent commissions
less fees paid by the agents owed to the Company, disbursements to property owners under property management, and the cost of interchange
and other fees for credit card processing services.

Advertising

Advertising costs are expensed as incurred. Advertising
expenses for the years ended December 31, 2024 and 2023 was $272,059 and $89,501, respectively, and included in sales and marketing expenses
in the consolidated statements of operations.

Debt Discounts and Debt Issuance Costs

Debt discounts and costs incurred in connection
with obtaining new debt financing are deferred and amortized over the life of the related financing. Debt discounts and deferred costs
are recognized as a direct reduction in the carrying amount of the debt instrument on the consolidated balance sheets and are recognized
on the consolidated statements of operations to amortization of financing fees over the term of the related debt using the effective interest
method. For the years ended December 31, 2024 and 2023, the Company recorded amortization of debt discounts and debt issuance costs of
$649,138 and $1,016,644, respectively. Upon abandonment of a pending financing transaction, the related deferred financing costs are charged
to expense.

Deferred Offering Costs

The Company capitalized certain legal, accounting,
and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings
are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of
additional paid-in capital. Should the planned equity financing be abandoned, the deferred offering costs would be expensed immediately
as a charge to operating expenses in the consolidated statement of operations. On October 12, 2023 the Company completed its IPO and incurred offering expenses of $2,544,459, which were recorded against
the proceeds received from the IPO. There were no deferred offering costs for the year ended December 31, 2024 or 2023.

F-13

Income Taxes

The Company accounts for income taxes under the
li