Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1501

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 1501
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50 or 85% of the lowest VWAP of the shares
prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes. During
the year ended December 31, 2024, the investor converted $71,713 of accrued interest to 53,100 shares of common stock.

F-22

On July 16, 2024, the Company entered into a securities
purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount
of $444,600 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of
13% per annum. In addition, the Company issued 29,800 shares of the Company’s common stock as a commitment fee, a warrant to purchase
53,700 shares of the Company’s common stock with an exercise price of $3.00, exercisable until the five-year anniversary of the
closing date, and a second warrant to purchase 54,200 shares of the Company’s common stock with an exercise price of $2.25. The
second warrant only became exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was
exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note was
fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance,
and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were
convertible into shares of the Company’s common stock at a conversion price of $2.50 per share unless the Company failed to make
an amortization payment when due, in which case the conversion price would be the lower of $2.50 or 85% of the lowest VWAP of the shares
prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes.

The Company evaluated the terms of the securities
purchase agreements and determined that the commitment shares and the first warrants were freestanding instruments. The Company determined
the commitment shares were to be classified as equity, which are initially recorded at fair value with no subsequent remeasurement. The
Company determined that the first warrants were classified as a derivative liability,