Company: LRHC
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112656
Chunk: 148

Company: La Rosa Holdings Corp.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 148
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 sufficient to meet projected operating
expenses through at least the next twelve months from the issuance of these condensed consolidated financial statements. The Company
will be required to raise additional capital to service its debt and to fund ongoing operations.

The
Company has incurred recurring net losses, and the Company’s operations have not provided net-positive cash flows. In view of these
matters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company plans on continuing
to expand via acquisitions, which will help achieve future profitability. Additionally, the Company has plans to raise capital from outside
investors, as it has done in the past, to fund operating losses and to provide capital for further business acquisitions. There can be
no assurance the Company can successfully raise the capital needed.

Fair
Value Option of Accounting

The
Company has elected the fair value option under Accounting Standards Codification 825-10, Financial Instruments (“ASC 825”),
to measure its Senior Secured Convertible Note and Incremental Warrants (until the Incremental Warrants conversion to Series B Preferred
Stock, See Note 5 – Borrowings for further discussion) issued during the first quarter. The fair value option may
be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. When the fair value option is
elected for an instrument, unrealized gains and losses for such instrument are reported in earnings at each subsequent reporting date.
Upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred
and not deferred.

Recently
Adopted Accounting Standards

In
November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU, No. 2023-07, Segment Reporting (Topic 280):
Improvements to Reportable Segment Disclosures, which requires public entities, including those with a single reportable segment, to:
(i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the chief operating
decision maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about
a reportable segment’s profit or loss and assets currently required by Accounting Standards Codification 280, Segment Reporting,
in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported
measures