Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 2319

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7A
Chunk 2319
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 services throughout the year to agents.

Property Management

The Company provides property management
services on a contractual basis for owners who lease their residential properties. These services include managing daily operations of
the property, tenant background screening, overseeing the tenant application process, and accounting services. The Company is compensated
for its services through a flat monthly management fee. At the option of the owner, the Company can also facilitate and account for repair
and remodeling costs for properties under management. These costs are not included in the transaction price as the customer is the party
paying and receiving these services. Property management services represent a series of distinct daily services rendered over time. Consistent
with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees
associated with the services performed.

The amount of revenue recognized is
presented gross for any services provided by the Company, as it is under the Company’s control. This is evidenced by the Company’s
obligations for its performance and its ability to direct and redirect the work, as well as negotiate the value of such services.

Title Settlement and Insurance

The Company provides title services
Revenue from title insurance premiums is recognized at the closing of 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