Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 92

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 8
Chunk 92
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 annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods
beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on
its consolidated financial statements.

Note 2 — Business Combinations

The Company completed a number of acquisitions
in the first quarter of 2024. The results of businesses acquired in a business combination are included in the Company’s condensed
consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration
provided and may consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business
at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities,
if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant
judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates,
and selection of comparable companies.

7

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated
Financial Statements

To date, the assets acquired and liabilities assumed
in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily
of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated fair
values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating
performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics of the identified
intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could
change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection
with the determination of fair values, the Company engages independent appraisal firms to assist with the valuation of intangible assets
acquired and certain assumed obligations.

Transaction costs associated with business combinations
are expensed as incurred.

During the first quarter of 2024, the Company
acquired majority ownership of the following franchisees of the Company: La Rosa Realty Georgia LLC (“Georgia”) and La Rosa
Realty California (“California”), and 100% ownership of La Rosa Realty Winter Garden LLC (“Winter Garden”). All
three franchises engage