Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 27

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 27
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,607,544  
    $1,607,544 

12

La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements

At December 31, 2024, the estimated fair value
of the derivative liability tied to the three vested warrants held by an institutional investor and remeasured on a recurring basis amounted
to $1,607,544.

At June 30, 2025, warrants held by an institutional
investor were eliminated through exercising and a redemption and cancellation agreement for $379,083. The Company recorded a derivative
liability related to the Incremental Warrants issued in connection with the SPA dated February 4, 2025. The Incremental Warrants’
fair value at date of issuance was $100,800,000 and were settled by June 30, 2025, with a gain recorded of $82,299,000. The initial analysis
assumes immediate conversion upon issuance and does not incorporate ownership limitations or conversion blockers that could otherwise
restrict full exercise or conversion. On June 26, 2025, the Company determined that modifications of the existing Senior Secured
Convertible Note during the quarter qualified as an extinguishment. 

The following tables provide a summary of changes
in fair value associated with the Level 3 liabilities for the six-month periods ended June 30, 2025 and 2024:

Derivative liabilities

     2025   2024   Balance – January 1,  $1,607,544   $-   Issuance of derivative liability   100,800,000    117,300   Cash paid to settle derivative liability   (379,083)   -    Issuance of cashless shares for exercising  warrants   (328,587)   -   Extinguishment of derivative liability   (366,308)   -    Change in fair market value - extinguished warrants   (533,566)   5,000   Change in fair market value - new warrants   (19,440,000)   -   Balance – March 31,  $81,360,000   $122,300   Issuance of derivative liability   -    112,000   Extinguishment of derivative