La Rosa Holdings (LRHC) Q2 2025 10-Q: $78.5M Quarterly Income, Major Financing Moves

Q: What were La Rosa Holdings Corp.'s (LRHC) largest revenue segments in Q2 2025?

The largest segments were AG真人官方 estate brokerage (residential) with $18,028,142 for the quarter and Property management with $3,083,763 for the quarter.

Q: Did LRHC report a profit or loss for the quarter and six months in 2025?

LRHC reported a net income of $78,463,104 for the three-months ended June 30, 2025, and a net loss of $17,235,781 for the six-months ended June 30, 2025.

Q: What significant financing transactions did LRHC disclose in this 10-Q?

Key financings include a $5,500,000 Senior Secured Convertible Note , issuance and settlement of Incremental Warrants (issuance fair value $100.8M; recorded gain $82.299M), and issuance of Series B Preferred Stock recorded as permanent equity.

Q: How did LRHC change its capital structure during the period?

LRHC effected an 80-for-1 reverse stock split reducing common shares outstanding to 729,113 , issued Series B Preferred Stock, and completed convertible note/warrant exchanges impacting equity and potential dilution.

Q: What is LRHC's goodwill balance and what does it reflect?

Goodwill is reported at $8,012,331 , reflecting purchase price allocations from acquisitions disclosed in the filing.

Q: Does LRHC report any working capital or liquidity measures?

The filing states the company has positive working capital of $4.4 million and referenced gross proceeds of $4,963,750 from a financing transaction.

[10-Q] La Rosa Holding Corp. Quarterly Earnings Report

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

La Rosa Holdings Corp. (LRHC) filed a Form 10-Q covering the six months ended June 30, 2025. The company reports segmented revenue led by residential real estate brokerage of $18,028,142 for the three-months and $30,924,027 for the six-months in 2025, and property management revenue of $3,083,763 and $6,060,296 for the three- and six-months, respectively. Net results show a substantial three-month net income of $78,463,104 for the quarter ended June 30, 2025, while corporate other income (expenses), net produced a net loss of $17,235,781 for the six months ended June 30, 2025. Significant financing and capital events include a $5.5 million Senior Secured Convertible Note, issuance and settlement of Incremental Warrants (fair value issuance noted at $100.8 million with a recorded gain of $82,299,000), issuance of Series B Preferred Stock recorded as permanent equity, and an 80-for-1 reverse stock split reducing outstanding common shares to 729,113. Goodwill is $8,012,331 and the company reports positive working capital of $4.4 million.

Positive

Revenue growth in core segments: residential brokerage of $18.03M (quarter) and $30.92M (six months) and property management of $3.08M (quarter)
Reported quarterly net income of $78,463,104 for the three-months ended June 30, 2025
Positive working capital of $4.4 million and reported liquidity from financings (gross proceeds noted at $4,963,750 in one financing)
Acquisitions completed with purchase price allocations adding identifiable intangibles and goodwill of $8,012,331

Negative

Net loss for six months of $17,235,781, indicating mid-year operating/other volatility
Extensive complex financing including a $5.5M Senior Secured Convertible Note, Incremental Warrants initially valued at $100.8M and settled with an $82.3M gain, and issuance of Series B Preferred Stock that materially changed equity structure
Material equity dilution and control changes from an 80-for-1 reverse stock split (common outstanding reduced to 729,113 shares) and Series B convertible terms with significant conversion mechanics
Significant non-cash and derivative items (fair value option election on the note, recorded derivative liabilities and gains) that increase reported income volatility

Insights

TL;DR: Strong quarterly operating revenue with complex financing activity drove a large quarter profit but led to significant six-month losses and capital structure changes.

The filing shows robust segment revenue growth, notably in residential brokerage and property management, and a reported quarterly net income of $78.5 million. Offsetting this are substantial financing transactions: a $5.5M Senior Secured Convertible Note, Incremental Warrants issued at large fair value and later settled yielding an $82.3M recognized gain, and issuance of Series B Preferred Stock accounted as permanent equity. These financing items materially affect reported income volatility and shareholders' equity, and the 80-for-1 reverse split and shareholder approval events materially altered the share base and control profile.

TL;DR: Multiple acquisitions and purchase-price allocations expanded intangible assets; significant debt and equity exchanges materially changed capital structure.

The company completed a series of acquisitions during 2024 and through mid-2025 with aggregate purchase price allocations creating identifiable intangibles (agent relationships, listings) and goodwill of $8,012,331. Financing related to the SPA (notes and warrants), the fair value election on the Convertible Note, the Exchange resulting in Series B Preferred Stock, and the reverse stock split are material corporate finance actions that alter dilution dynamics, preferred conversion mechanics, and potential future M&A flexibility.

08/18/2025 - 05:23 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number: 001-41588

LA ROSA HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Nevada		87-1641189
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1420 Celebration Blvd., 2nd Floor

Celebration, Florida

34747

(Address of principal executive offices)

(Zip Code)

(321) 250-1799

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and formal fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
Common Stock		LRHC		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 15, 2025, the registrant had 1,223,918 shares of common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS	1

	CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024	1

	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE-MONTHS AND SIX-MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)	2

	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE-MONTHS AND SIX-MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)	3

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)	5

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43

ITEM 4.	CONTROLS AND PROCEDURES	43

PART II.	OTHER INFORMATION	44

ITEM 1.	LEGAL PROCEEDINGS	44

ITEM 1A.	RISK FACTORS	44

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES	45

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	45

ITEM 4.	MINE SAFETY DISCLOSURES	45

ITEM 5.	OTHER INFORMATION	45

ITEM 6.	EXHIBITS	46

	SIGNATURES	49

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

La Rosa Holdings Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30, 2025			December 31, 2024
	(unaudited)			(audited)
Assets
Current assets:
Cash	$	5,095,257		$	1,442,901
Restricted cash		1,965,804			2,137,707
Accounts receivable, net of allowance for credit losses of $325,627 and $166,504, respectively		1,208,048			931,662
Other current assets		73,792			1,788
Total current assets		8,342,901			4,514,058

Noncurrent assets:
Property and equipment, net		7,663			9,411
Right-of-use asset, net		1,082,948			997,715
Intangible assets, net		5,423,815			5,840,080
Goodwill		8,012,331			8,012,331
Other long-term assets		37,959			33,831
Total noncurrent assets		14,564,716			14,893,368
Total assets	$	22,907,617		$	19,407,426
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,451,504		$	2,376,704
Accrued expenses		649,421			738,065
Contract liabilities		134,121			7,747
Line of credit		2,332			148,976
Derivative liability		—			1,607,544
Advances on future receipts		—			618,681
Accrued acquisition cash consideration		140,000			381,404
Notes payable, current		148,757			2,187,673
Lease liability, current		407,905			473,733
Total current liabilities		3,934,040			8,540,527

Noncurrent liabilities:
Note payable, net of current		8,697,337			1,475,064
Security deposits and escrow payable		1,965,804			2,137,707
Lease liability, noncurrent		711,687			545,759
Other liabilities		2,950			32,950
Total non-current liabilities		11,377,778			4,191,480
Total liabilities		15,311,818			12,732,007

Commitments and contingencies (Note 6)

Stockholders’ equity:
Preferred stock - $0.0001 par value; 50,000,000 shares authorized; 2,000 Series X shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		—			—
Preferred stock - $0.0001 par value; 6,000 shares authorized; 6,000 Series B shares issued and outstanding at June 30, 2025.		1			—
Common stock - $0.0001 par value; 2,050,000,000 shares authorized; 729,113 and 273,122 issued and outstanding at June 30, 2025 and December 31, 2024, respectively		73			27

Additional paid-in capital		47,279,861			29,123,747
Accumulated deficit		(43,852,040	)		(26,555,319	)
Total stockholders’ equity– La Rosa Holdings Corp. shareholders		3,427,895			2,568,455
Noncontrolling interest in subsidiaries		4,167,904			4,106,964
Total stockholders’ equity		7,595,799			6,675,419
Total liabilities and stockholders’ equity	$	22,907,617		$	19,407,426

See notes to the consolidated financial statements.

La Rosa Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue	$	23,214,218		$	19,051,420		$	40,728,612		$	32,140,319

Cost of revenue		21,361,990			17,465,109			37,338,716			29,392,011

Gross profit		1,852,228			1,586,311			3,389,896			2,748,308

Operating expenses:
Sales and marketing		606,298			212,608			1,169,447			445,335
General and administrative		3,201,053			2,740,156			6,928,578			5,062,011
Stock-based compensation — general and administrative		507,457			473,972			2,422,308			3,665,110
Total operating expenses		4,314,808			3,426,736			10,520,333			9,172,456

Loss from operations		(2,462,580	)		(1,840,425	)		(7,130,437	)		(6,424,148	)
Other income (expense):
Interest expense, net		(182,807	)		(78,607	)		(207,148	)		(98,859	)
Gain on extinguishment of debt		4,113,000			—			3,961,075			—
Amortization of debt discount		—			(264,101	)		(63,160	)		(320,104	)
Change in fair value of derivative liability		—			(83,100	)		899,874			(88,100	)
Loss on issuance of senior secured convertible note and warrants		—			—			(128,836,250	)		—
Change on fair value of convertible note and warrants		(5,315,000	)		—			31,830,000			—
Gain on settlement of incremental warrants		82,299,000			—			82,299,000			—
Other income, net		11,491			—			11,265			—
Income (loss) before provision for income taxes		78,463,104			(2,266,233	)		(17,235,781	)		(6,931,211	)
Benefit from income taxes		—			—			—			—
Net Income (loss)		78,463,104			(2,266,233	)		(17,235,781	)		(6,931,211	)
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries		43,246			53,839			60,940			(12,343	)
Net income (loss) after noncontrolling interest in subsidiaries		78,419,858			(2,320,072	)		(17,296,721	)		(6,918,868	)
Less: Deemed dividend		89,031			—			275,264			230,667
Net income (loss) attributable to common stockholders	$	78,330,827		$	(2,320,072	)	$	(17,571,985	)	$	(7,149,535	)

Income (loss) per share of common stock attributable to common stockholders
Basic	$	115.11		$	(12.49	)	$	(32.00	)	$	(40.08	)
Diluted	$	15.25		$	(12.49	)	$	(32.00	)	$	(40.08	)

Weighted average shares used in computing net income (loss) per share of common stock attributable to common stockholders
Basic		680,504			185,813			549,104			178,366
Diluted		5,135,893			185,813			549,104			178,366

See notes to the consolidated financial statements.

La Rosa Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

Three Months Ended	Preferred Stock Series X				Preferred Stock Series B				Common Stock				Additional Paid-In			Accumulated			Total Stockholders’			Noncontrolling Interest In		Total
June 30, 2025	Shares		Par Value		Shares		Par Value		Shares		Par Value		Capital			Deficit			Equity			Subsidiaries		Equity
Balance as of March 31, 2025		2,000	$	—		—	$	—		467,743		47	$	34,766,454		$	(122,271,898	)	$	(87,505,397	)	$	4,124,658	$	(83,380,739	)
Net income																	78,419,858			78,419,858			43,246		78,463,104
Stock-based compensation										41,217		4		507,583						507,587					507,587
Proceeds from new investors										218,933		22		3,744,955						3,744,977					3,744,977
Issuance of Series B Preferred Stock						6,000		1		—				8,260,999						8,261,000					8,261,000
Issuance of common stock for stock-based compensation equity awards, net of shares withheld for taxes										1,220		—		(130	)					(130	)				(130	)
Balance as of June 30, 2025		2,000	$	—		6,000	$	1		729,113	$	73	$	47,279,861		$	(43,852,040	)	$	3,427,895		$	4,167,904	$	7,595,799

Six Months Ended	Preferred Stock Series X				Preferred Stock Series B				Common Stock				Additional Paid-In		Accumulated			Total Stockholders’			Noncontrolling Interest In		Total
June 30, 2025	Shares		Par Value		Shares		Par Value		Shares		Par Value		Capital		Deficit			Equity			Subsidiaries		Equity
Balance as of December 31, 2024		2,000	$	—		—	$	—		273,122	$	27	$	29,123,746	$	(26,555,319	)	$	2,568,454		$	4,106,964	$	6,675,419
Net loss																(17,296,721	)		(17,296,721	)		60,940		(17,235,781	)
Issuance of common stock for consulting work										35,914		4		580,595					580,597					580,597
Equity awards issued with debt issuance										28,238		3		812,153					812,156					812,156
Stock-based compensation										77,882		8		1,833,803					1,833,811					1,833,811
Proceeds from new investors										312,031		31		6,660,667					6,660,698					6,660,698
Issuance of Series B Preferred Stock						6,000		1		—				8,260,999					8,261,000					8,261,000
Issuance of common stock for stock-based compensation equity awards, net of shares withheld for taxes										1,926	$	-		7,900					7,900					7,900
Balance as of June 30, 2025		2,000	$	—		6,000	$	1		729,113	$	73	$	47,279,861	$	(43,852,040	)	$	3,427,895		$	4,167,904	$	7,595,799

See notes to the consolidated financial statements.

La Rosa Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

	Preferred Stock Series X				Common Stock				Additional					Total			Noncontrolling
Three Months Ended June 30, 2024	Shares		Par Value		Shares		Amount		Paid-In Capital		Accumulated Deficit			Stockholders’ Equity			Interest In Subsidiaries		Total Equity
Balance as of March 31, 2024		2,000	$	—		178,172	$	18	$	22,285,291	$	(16,706,552	)	$	5,578,757		$	4,405,379	$	9,984,136
Net loss												(2,320,072	)		(2,320,072	)		53,839		(2,266,233	)
Issuance of common stock for acquisitions						7,142		1		892,680					892,681			915,321		1,808,002
Equity awards issued with debt issuance						625		—		64,618					64,618					64,618
Stock-based compensation						3,250		—		473,972					473,972					473,972
Issuance of common stock for equity awards, net of shares withheld for taxes						9		—		—					—					—
Balance as of June 30, 2024		2,000	$	—		189,198	$	19	$	23,716,561	$	(19,026,624	)	$	4,689,956		$	5,374,539	$	10,064,495

	Preferred Stock Series X				Common Stock				Additional						Total			Noncontrolling
Six Months Ended June 30, 2024	Shares		Par Value		Shares		Amount		Paid-In Capital			Accumulated Deficit			Stockholders’ Equity			Interest In Subsidiaries			Total Equity
Balance as of December 31, 2023		2,000	$	—		167,590	$	17	$	18,017,724		$	(12,107,756	)	$	5,909,985		$	3,857,076		$	9,767,061
Net loss													(6,918,868	)		(6,918,868	)		(12,343	)		(6,931,211	)
Issuance of common stock for acquisitions						13,974		1		1,884,450						1,884,451			1,529,806			3,414,257
Equity awards issued with debt issuance						1,463		—		151,236						151,236						151,236
Stock-based compensation						6,127		1		3,665,109						3,665,110						3,665,110
Issuance of common stock for equity awards, net of shares withheld for taxes						44		—		(1,958	)					(1,958	)					(1,958	)
Balance as of June 30, 2024		2,000	$	—		189,198	$	19	$	23,716,561		$	(19,026,624	)	$	4,689,956		$	5,374,539		$	10,064,495

See notes to the consolidated financial statements.

La Rosa Holdings Corp. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(unaudited)

	For the Six Months Ended June 30,
	2025			2024
Cash Flows from Operating Activities:
Net loss	$	(17,235,781	)	$	(6,931,211	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		2,422,308			3,665,110
Loss on issuance of senior secured convertible note and warrants		128,836,250			—
Change on fair value of convertible note and warrants		(31,830,000	)		—
Gain on settlement of incremental warrants		(82,299,000	)		—
Amortization and depreciation		418,013			440,343
Amortization of right-of-use assets		306,975			211,566
Change in fair value of derivatives		(899,874	)		88,100
Amortization of debt discount and financing fees		63,160			320,104
Gain on extinguishment of debt		(3,961,075	)		—
Non-cash interest expense		(3,848	)		90,922
Allowance for credit losses		159,123			43,139
Changes in Operating Assets and Liabilities:
Accounts receivable		(435,509	)		(103,358	)
Other assets		(76,132	)		5,354
Accounts payable		74,800			626,100
Accrued expenses		(84,797	)		13,691
Contract liabilities		126,374			120,766
Security deposits and escrow payable		(171,903	)		282,884
Operating lease liabilities		(292,108	)		(214,879	)
Net Cash Used in Operating Activities		(4,883,024	)		(1,341,369	)
Cash Flows from Investing Activities:
Cash acquired through acquisition of businesses		—			71,718
Net Cash Provided by Investing Activities		—			71,718
Cash Flows from Financing Activities:
Borrowings on bank line of credit		6,873			147,881
Payments on bank line of credit		(153,517	)		(147,881	)
Proceeds from notes payable		3,408,585			2,250,200
Payments deferred debt issuance costs		(138,895	)		(326,879	)
Payments on notes payable		(74,909	)		(2,834	)
Proceeds from advances on future receipts		—			500,000
Payments on advances on future receipts		(694,871	)		(199,463	)
Payments on post-acquisition consideration		(271,404	)		(75,000	)
Repurchase of derivative instruments issued		(379,083	)		—
Proceeds from issuance of common stock		6,660,698			—
Withholding tax paid on behalf of employees on stock-based awards		—			(1,958	)
Net Cash Provided by Financing Activities		8,363,477			2,144,066

Net Increase in Cash and Restricted Cash		3,480,453			874,415
Cash and Restricted Cash at Beginning of Period		3,580,608			2,443,827
Cash and Restricted Cash at End of Period	$	7,061,061		$	3,318,242

Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period for:
Interest	$	237,488		$	20,772

Non-Cash Activities:
Issuance of Series B in exchange of incremental warrants	$	8,261,000		$	—
Issuance of new convertible note	$	8,364,000		$	—
Issuance of 28,238 shares of common stock as part of the settlement of notes payable and warrants	$	812,156		$	—
Issuance of 115,722 shares of common stock for services rendered	$	2,422,308		$	—
Office leases acquired under operating lease obligations	$	392,208
Issuance of 13,972 shares of common stock as consideration of acquisitions of businesses	$	—		$	1,884,451
Issuance of 1,463 shares of common stock as part of the issuance of notes payable	$	—		$	151,236
Issuance of 6,152 shares of common stock for services rendered	$	—		$	3,665,110
Office leases acquired under operating lease obligations	$	—		$	609,049
Derivative liability embedded in debt instruments	$	—		$	229,300

Reconciliation of Cash and Restricted Cash
Cash	$	5,095,257		$	1,551,135
Restricted Cash		1,965,804			1,767,107
Cash and Restricted Cash	$	7,061,061		$	3,318,242

See notes to the consolidated financial statements.

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 — Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements of La Rosa Holdings Corp. (the “Company”) have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The Company has made estimates and judgements affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited and reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented, which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to the Company’s going concern assessment. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values.

The unaudited condensed consolidated financial statements include the financial statements of the Company, all entities that are wholly-owned by the Company, and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances have been eliminated. Business combinations consummated during the reporting period are reflected in the Company’s results effective from the date of acquisition through the end of the reporting period.

Results of the three-month and six-month periods ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year ending December 31, 2025. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the Company as of and for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K. The condensed consolidated balance sheet as of December 31, 2024 was derived from the Company’s audited financial statements referred to above.

Stock Split

On July 7, 2025, the Company effected a 1-for-80 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Reverse Stock Split”). The Reverse Stock Split reduced the number of shares of common stock of the Company outstanding from 58,323,795 shares to 729,113 shares, when considering the rounding up to the nearest whole share adjustments. The number of authorized shares of common stock of the Company under its Articles of Incorporation remained unchanged at 2,050,000,000 shares and the par value of the common stock remained $0.0001 per share. See Note 11 – Subsequent Events for more information.

As a result of the Reverse Stock Split, all historical share and per share amounts disclosed in the unaudited condensed consolidated financial statements have been converted to the post-split share amounts.

Accounts Receivable and Allowance for Credit Losses

The Company’s trade accounts receivable consist of balances due from agents, tenants, franchisees, and commissions for closings and are presented on the consolidated balance sheets net of the allowance for credit losses. Management determines the allowance for expected credit losses based upon historical experiences as well as current conditions that affect the collectability of the reported amount and regularly evaluates individual customer receivables and considering financial condition, credit history, current economic conditions and other relevant factors, in setting specific reserves for certain accounts. Receivables are written off once they are deemed uncollectible, which may arise when the debtor is deemed unable to pay the amounts owed to the Company. The allowance for credit losses was $325,627 and $166,504 as of June 30, 2025 and December 31, 2024, respectively. Estimates of uncollectible accounts receivable are recorded to general and administrative expense.

The activity for the allowance for credit losses during the six-months ended June 30, 2025 and 2024 is set forth in the table below:

	Balance at				Deductions			Balance at
	Beginning of		Charged to		from the			End of
	Period		Expenses		Allowance			Period
Six Months ended June 30, 2025 Allowance for Credit Losses	$	166,504	$	233,837	$	(74,714	)	$	325,627
Six Months ended June 30, 2024 Allowance for Credit Losses	$	83,456	$	49,758	$	(6,619	)	$	126,595

Liquidity – Going Concern and Management’s Plans

On June 30, 2025, the Company had a cash balance of $5.1 million and positive working capital of $4.4 million.

On February 4, 2025 (the “Closing Date”), the Company entered into a Securities Purchase Agreement (the “SPA”), with an institutional investor (the “Investor”) in which the Company obtained gross proceeds of $4,963,750. The Company used $2.7 million of the proceeds to pay-off certain indebtedness, pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), and general corporate purposes. See Note 5 – Borrowings for further discussion.

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated from operations, will not be 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 and other disclosures. ASU No. 2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments. The Company adopted ASU No. 2023-07 effective December 31, 2024.

Recently Issued Accounting Standards Not Yet Adopted

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements. A Variable Interest Entity (VIE) is a legal entity in which an investor holds a controlling interest that is not based on majority voting rights.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)- Clarifying the Effective Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in 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 half of 2024 and plans to acquire additional businesses in the future. 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.

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 half of 2024, the Company acquired majority ownership of the following franchisees of the Company: La Rosa AG真人官方ty Georgia LLC (“Georgia”) and La Rosa AG真人官方ty California (“California”), La Rosa AG真人官方ty Lakeland LLC (“Lakeland”), La Rosa AG真人官方ty Success LLC (“Success”) and 100% ownership of La Rosa AG真人官方ty Winter Garden LLC (“Winter Garden”). All five franchises engage mostly in the residential real estate brokerage services to the public primarily through sales agents and also provide coaching and support services to agents on a fee basis.

The following table summarizes the purchase consideration and the purchase price allocation to the estimated fair values of the identifiable assets acquired and liabilities assumed for the five acquisitions.

	Winter Garden			Georgia			California			Lakeland			Success			Total
Acquired ownership		100	%		51	%		51	%		51	%		51	%
Acquisition date		2/21/2024			3/7/2024			3/15/2024			4/18/2024			5/24/2024
Common stock issued		268,858			276,178			1,387			514,939			56,375			1,117,737

Cash consideration	$	—		$	—		$	—		$	50,000		$	10,000		$	60,000
Equity consideration		352,204			516,453			123,113			823,903			68,778			1,884,451
Total purchase price	$	352,204		$	516,453		$	123,113		$	873,903		$	78,778		$	1,944,451
Noncontrolling interest		—			496,200			118,285			839,632			75,689			1,529,806
Acquisition date fair value	$	352,204		$	1,012,653		$	241,398		$	1,713,535		$	154,467		$	3,474,257

Purchase price allocation	$	352,204		$	1,012,653		$	241,398		$	1,713,535		$	154,467		$	3,474,257
Less fair value of net assets acquired:
Cash		17,623			79,553			1,436			32,935			171			131,718
Working capital (less cash)		(17,148	)		(54,991	)		(45,027	)		(59,325	)		(21,323	)		(197,814	)
Intangible assets		171,767			446,657			111,202			815,411			104,798			1,649,835
Long-term assets		—			91,118			106,542			129,521			22,697			349,878
Long-term liabilities		—			(98,641	)		(69,449	)		(94,591	)		(8,236	)		(270,917	)
Net assets acquired		172,242			463,696			104,704			823,951			98,107			1,662,700
Goodwill	$	179,962		$	548,957		$	136,694		$	889,584		$	56,360		$	1,811,557

Goodwill generated from the acquisition was primarily attributable to expected synergies from future growth and strategic advantages provided through expansion and was not expected to be deductible for income tax purposes.

During the year ended December 31, 2024, after an impairment evaluation, the Company recognized an impairment charge of $787 thousand related to the acquisitions of Lake Nona, Premier, Orlando, Georgia, California, Lakeland, CW Properties and Winter Garden.

The classes of intangible identifiable assets acquired and the estimated useful life of each class is presented in the table below for the five acquisitions:

	Winter Garden		Georgia		California		Lakeland		Success		Total
Franchise agreement (10 to 11 years)	$	146,990	$	356,200	$	92,367	$	511,453	$	48,302	$	1,155,312
Agent relationships (8 to 11 years)		—		43,447		7,657		147,455		—		198,559
AG真人官方 estate listings (1 year)		22,239		37,310		10,417		129,847		55,228		255,041
Non-compete agreements (4 years)		2,538		9,700		761		26,656		1,268		40,923
Total identifiable intangible assets acquired	$	171,767	$	446,657	$	111,202	$	815,411	$	104,798	$	1,649,835

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

The amounts of revenue, cost of revenue, gross profit, and loss from operations before income taxes of the five acquisitions included in the Company’s condensed consolidated statement of operations from the date of the acquisition for the three- and six-month periods ended June 30, 2024 is as follows:

	Three Months		Six Months
	Ended		Ended
	June 30,		June 30,
	2024		2024
Revenue	$	3,007,645	$	3,253,081
Cost of revenue	$	2,752,472	$	2,982,184
Gross profit	$	255,173	$	270,898
Loss before provision for income taxes	$	94,571	$	90,142

The following unaudited pro forma financial information presents the combined operating results of the Company, Winter Garden, Georgia, California, Lakeland and Success as if each acquisition had occurred as of January 1, 2024. The unaudited pro forma financial information includes the accounting effects of the business combinations, including adjustments to the amortization of intangible assets. The unaudited pro forma information does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of the Company’s future consolidated results.

The unaudited pro forma financial information is presented in the table below for the six-month period ended June 30, 2024:

	Six Months Ended
	June 30,
	2024
Revenue	$	34,766,626
Cost of revenue		31,703,710
Gross profit	$	3,265,900

Loss before provision for income taxes	$	(6,066,202	)
Loss per share of common stock attributable to common stockholders, basic and diluted	$	(29.35	)
Weighted average shares used in computing net loss per share of common stock attributable to common stockholders	$	214,520

Note 3 — Goodwill and Intangible Assets

Goodwill

The gross carrying amount of goodwill as of both June 30, 2025 and December 31, 2024 was $8,012,331.

Intangible Assets

Intangible assets consist of franchise agreements, agent relationships, real estate listings, and non-compete agreements, and are initially recorded at fair value. Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or amortized on a straight-line basis if such pattern cannot be reliably determined. The Company continues to assess potential triggering events related to the value of its intangible assets and concluded that there was no impairment during the six months ended June 30, 2025.

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

The components of purchased intangible assets were as follows:

	Weighted Average
	Remaining
	Amortization	June 30, 2025
	Period	Gross Carrying		Accumulated		Net
	(in years)	Amount		Amortization		Amount
Franchise agreement	9	$	5,249,482	$	718,295	$	4,531,187
Agent relationships	7		916,282		147,121		769,161
AG真人官方 estate listings	1		564,756		559,935		4,821
Non-compete agreements	2		188,748		70,101		118,647
Total	9	$	6,919,268	$	1,495,453	$	5,423,815

	Weighted Average
	Remaining
	Amortization	December 31, 2024
	Period	Gross Carrying		Accumulated		Net
	(in years)	Amount		Amortization		Amount
Franchise agreement	9	$	5,249,482	$	467,138	$	4,782,344
Agent relationships	8		916,282		93,431		822,851
AG真人官方 estate listings	0		564,756		472,543		92,213
Non-compete agreements	3		188,748		46,076		142,672
Total	9	$	6,919,268	$	1,079,188	$	5,840,080

For the three-months and six-months ended June 30, 2025, amortization expense was $187 thousand and $416 thousand respectively. For the three-months and six-months ended June 30, 2024, amortization expense was $254 thousand and $438 thousand, respectively. The remaining estimated amortization expense is expected to be as follows:

	30-Jun-25
2025 - remainder of the year	$	333,678
2026		657,711
2027		654,098
2028		611,917
2029		609,696
Thereafter		2,556,715
Total	$	5,423,815

Note 4 — Fair Value Measurements and Other Liabilities

Fair Value Measurements

Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company classified certain liabilities based on the following fair value hierarchy:

●

Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

●

Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

●

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company has evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant effect on the estimated fair value amounts.

The carrying amounts of financial instruments, including cash, restricted cash, accounts receivable, accounts payable, and accrued expenses reflected in the condensed consolidated financial statements approximate fair value due to their short-term maturities.

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

The Company determined that on June 30, 2025 and December 31, 2024, certain instruments qualified as derivative liabilities and were recorded at fair value on the date of issuance and re-measured at fair value each reporting period with the change reported in earnings. See Note 7 – Equity Shares and Warrants for more information.

Securities Purchase Agreement

On February 4, 2025, the Company entered into an SPA with an investor (“Investor”) for a Senior Secured Convertible Note (“Convertible Note”) with a face value of $5,500,000 and 16 Incremental Warrants exercisable for a face amount of $2,500,000 each. See Note 5 – Borrowings for further discussion.

The purchase price paid by the Investor under the SPA for the Convertible Note and Incremental Warrants was $4,963,750 in gross proceeds of which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of $3,408,585. It was determined that the note and warrants within this transaction met the requirements for the Fair Value Option under ASC 825, which the Company elected. Using the fair value option, the Convertible Note is required to be recorded at initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the notes are recognized as gain/loss on fair value adjustment within other income (expenses) in the Company’s unaudited condensed consolidated statements of operations.

As a result of applying the fair value option, direct costs and fees related to the Convertible Note were expensed as incurred and were not deferred.

On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the Investor entered into, and closed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”) 6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). The Convertible Note remained outstanding post-Exchange.

Pursuant to the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) in excess of 19.99% of the Company’s outstanding shares of Common Stock is conditional upon obtaining the approval of the Company’s shareholders in accordance with the rules and regulations of the Nasdaq Capital Market (“Shareholder Approval”). The Company agreed to convene a meeting of stockholders to obtain Shareholder Approval within 120 days after the date of the Exchange Agreement. The Company obtained the Shareholder Approval effective as of August 11, 2025.

The Company determined the Exchange met the criteria for liability derecognition of the Incremental Warrants as the Exchange represented settlement of the liability through delivery of other financial assets. As the warrant was an equity contract classified as a liability at issuance, upon settlement, the equity contract was required to be marked to market. The Company recognized a change in fair value of $9,200,000 measured as the difference between the fair value of the Incremental Warrants at March 31, 2025, and their fair value of $90,560,000 immediately prior to the Exchange. The Series B Preferred Stock issued to the Investor in satisfaction of the Incremental Warrants in the Exchange had an issuance date fair value of $8,261,000 based on the following assumptions:

	June 18,
	2025
Stated Value	$	6,000,000
Dividend Rate		0.0	%
Conversion Price	$	20.00
Alternate Conversion Amount	$	9.60
Required Premium		125.0	%
Stock Price	$	10.40
VWAP	$	10.40

At the closing of the Exchange, the Company recognized a gain on settlement of the Incremental Warrants of $82,299,000, measured as the difference between the adjusted fair value of the Incremental Warrants immediately prior to the Exchange and the fair value of the Series B Preferred Stock at issuance, net of par value. The Company evaluated the classification of its Series B Preferred Stock and concluded that it is more akin to equity than debt and accounted for as permanent equity. Accordingly, the Series B Preferred Stock is presented within permanent equity in the accompanying condensed consolidated financial statements. The shares were issued at their par value (rounded to $1) with the remaining fair value of the Series B Preferred Stock in excess of par value, $8,260,999 being recorded to additional paid-in capital.

The following tables provide the fair value and contractual principal balance outstanding on the Convertible Note and the Incremental Warrants accounted for under the fair value option as of June 30 and June 18, 2025 or June 26, 2025, respectively:

	As of		As of
	June 30,		June 26,
	2025		2025
Convertible Note fair value		7,297,000		12,477,000
Convertible Note, contractual principal outstanding		5,500,000		5,500,000

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

	As of		As of
	June 30,		June 18,
	2025		2025
Incremental Warrants		-		90,560,000

The fair value of the Convertible Note was calculated using a fair value analysis considering the following factors and assumptions:

				June 26,			June 26,
	June 30, 2025			2025 Post Amendment⁽²⁾			2025 Pre-Amendment⁽²⁾			March 31, 2025⁽¹⁾
Stock Price	$	10.48		$	11.60		$	11.60		$	14.40
Conversion Price	$	36.39		$	36.39		$	36.39		$	36.39
Alternate Conversion Price	$	9.73		$	9.44		$	6.33		$	6.33
Alternate Conversion Premium		120.00	%		120.00	%		120.00	%		120.00	%
Redemption Premium		120.00	%		120.00	%		120.00	%		120.00	%
Interest Rate		12.00	%		12.00	%		12.00	%		12.00	%

	⁽¹⁾	The fair value analysis of the Convertible Note was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction.
	⁽²⁾	The amendment to the Note on June 26, 2025, corrected the term of the Note from 1 year to 2 years and adjusted the alternate conversion price from the “lesser” of 95% VWAP and the floor price to the “greater” of.

The fair value of the Incremental Warrants were calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies for the prior quarter ended March 31, 2025 and right before the exchange on June 18, 2025:

	June 18,			March 31,
	2025⁽¹⁾			2025⁽¹⁾
Face Value	$	2,500,000		$	2,500,000
Exercise Price	$	2,256,250		$	2,256,250
Stock Price	$	10.40		$	14.40
Exercise Threshold		20% of Min price			20% of Min price
Valuation per Incremental Warrant upon exercise	$	11,320,000		$	10,170,000
Discount Rate		36.97	%		30.69	%
Risk Free Rate		4.20	%		4.03	%
Annualized Volatility		92.00	%		100.00	%
Forecast horizon (years)		0.08			0.08

⁽¹⁾

The fair value analysis of the Incremental Warrants was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction.

A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows:

		As of June 30, 2025
		Level 1		Level 2		Level 3		Total
Liabilities
Derivative liabilities	$	-	$	-	$	-	$	-
Convertible Note	$	-	$	-	$	7,297,000	$	7,297,000

	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities
Derivative liabilities	$	-	$	-	$	1,607,544	$	1,607,544

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 liability		(90,560,000	)		-
Change in fair market value - extinguished warrants		9,200,000			83,100
Balance – June 30,	$	-		$	317,400

Convertible Note

Balance – January 1, 2025	$	-
Issuance of Convertible Note⁽¹⁾		33,000,000
Change in fair value of Convertible Note		(17,705,000	)
Balance – March 31, 2025		15,295,000
Change in fair value of Convertible Note		(2,818,000	)
Convertible Note Extinguished⁽²⁾		12,477,000
Issuance of Convertible Note⁽²⁾		8,364,000
Change in fair value of Convertible Note		(1,067,000	)
Balance – June 30, 2025		7,297,000

The fair value of the derivative liability related to the three eliminated Warrants, was computed using the Black-Scholes model both when issued and on the balance sheet date. To determine the fair value, the Company incorporated transaction details such as the price of the Company’s common stock, contractual terms, maturity, and risk-free rates, as well as assumptions about future financings, volatility, probability of contingencies, and holder behavior. The fair value of the derivative liability on the issuance date and the balance sheet date and the assumptions used in the Black-Scholes model are set forth in the table below.

	December 31,
	2024
Weighted average fair value	$	0.87
Dividend yield		—
Expected volatility factor		72.7	%
Risk-free interest rate		4.3	%
Expected life (in years)		5.5

Contract Liabilities and Performance Obligations

Contract liabilities consist of unsatisfied performance obligations related to annual dues received at the start of the calendar year. As of June 30, 2025, the Company has approximately $134 thousand of remaining performance obligations, all of which will be recognized into revenue by the end of the calendar year. The Company has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or less.

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

Note 5 — Borrowings

Line of Credit

The Company has a line of credit with Regions Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On June 30, 2025, the outstanding balance on the line of credit was $2,332 at a prime rate of 7.50% plus 4.75%, or 12.25%. On December 31, 2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75% plus 4.75%, or 12.50%. The line of credit is collateralized by Company assets. The interest expense incurred for the line of credit was $2,380 and $6,873 for the three-months and six-months ended June 30, 2025, respectively. No amount was drawn on the facility during the first six months of 2024.

Security Purchase Agreement

On February 4, 2025, the Company and an Investor entered into the SPA, pursuant to which the Company issued to the Investor on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (the “Incremental Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for the Initial Note and Incremental Warrants was $4,963,750.

The Initial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in arrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. The interest expense incurred for the Initial Note was $219,388 and $322,055, for the three-months and six-months ended June 30, 2025, respectively.

In connection with the closing of the Initial Note, the Company entered into a Registration Rights Agreement dated February 4, 2025, obligating the Company to file and maintain the effectiveness of one or more registration statements with the SEC covering the resale of the shares of common stock issuable upon conversion of the Notes and related instruments. The Company was required to file an initial registration statement with the SEC within 30 calendar days of the closing date and have it declared effective within 90 calendar days (or 120 days if subject to full SEC review). The Company successfully filed the registration statement on time per the agreed terms for the Initial Note. The Company is also subject to certain limitations on entering into conflicting registration rights agreements through the applicable date and must allocate available registration capacity pro rata among holders.

The Notes may be prepaid by the Company, in whole or in part, at its option with at least 30 calendar days’ notice to the holder, provided no Event of Default has occurred and is continuing. Voluntary prepayments are subject to a redemption premium equal to 120% of the outstanding principal, accrued interest, and any applicable charges being redeemed. The Company may not issue more than one redemption notice within any 20-trading-day period, and such notices are irrevocable once issued.

Certain mandatory redemptions, including those triggered by Events of Default, Bankruptcy Events, or Change of Control transactions, are contractually deemed voluntary prepayments and are also subject to the 120% redemption premium. The redemption price in such scenarios is the greater of (i) 120% of the outstanding amount or (ii) a formula based on the conversion rate and the highest closing price of the Company’s common stock during a specified period.

Other redemptions, such as those triggered by subsequent placements or asset sales, are payable at 100% of the applicable amount and are not subject to a premium.

On May 23, 2025, the Company and the Investor holding the Initial Note and Incremental Warrants entered into a waiver agreement pursuant to which, effective as of May 20, 2025, through May 30, 2025, the holder waived all rights to default-related penalties, default interest, and acceleration of any amounts due under the Initial Note, as well as any other rights arising from an event of default under the SPA, the Initial Note, the Incremental Warrants, and the related transaction documents, specifically with respect to the Company’s untimely filing of its Quarterly Report on Form 10-Q. In addition, the Investor waived the requirement under the related Registration Rights Agreement to register for resale the shares of common stock issuable upon conversion of the Notes (other than the Initial Note) in the initial registration statement filed by the Company with the SEC on February 14, 2025, and all related rights to receive any Registration Delay Payments (as defined in the Registration Agreement). The Company agreed to file subsequent registration statements within thirty (30) calendar days following the issuance of any Incremental Notes pursuant to the exercise or call of an Incremental Warrant, registering for resale by the Investor all shares issuable upon the conversion of such notes.

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

On June 18, 2025, the Company and the Investor entered into an Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”) 6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada. The Initial Note remains outstanding post-Exchange. See Note 8 – Stockholder’s Equity for further discussion.

On June 26, 2025, the Company and the Investor entered into an Amendment No. 1 to the Initial Note to correct the maturity date to February 4, 2027 and amend the Alternate Conversion Price to be the greater of (i) 95% of the lowest VWAP of the common stock of the Company during the seven (7) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (as defined in the Initial Note) and (ii) the Floor Price (as defined in the Initial Note).

Upon the modification on June 26, 2025, the Company evaluated the debt modification guidance, including the troubled debt restructuring guidance, determining that the modification of this instrument for which the Company made a fair value option election pursuant to Subtopic 825-10 at inception, is not a troubled debt restructuring and rather, an extinguishment of the existing Initial Note. The Company recorded a gain on debt extinguishment of $4,113,000, which pursuant to ASC 470-50-40-2 for all extinguishments of debt, represents the difference between the reacquisition price (which includes any premium) and the net carrying amount of the debt being extinguished (which includes any deferred debt issuance costs) should be recognized as a gain or loss when the debt is extinguished. There were no deferred debt issuance costs as the Initial Note was accounted for under the fair value option at issuance, and regarding the amendment, the Company incurred approximately $2,000 in costs, which were expensed in the period incurred.

Cash Advance Agreements

On February 5, 2025, the Company paid off their Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance LLC (“Cedar”) in the amount of $354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid off their other Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) in the amount of $340,421, resulting in a loss on extinguishment of debt of $68,615. The final amortization of financing fees incurred for these MCA loans occurred in Q1 2025, so for the six-months ended June of 2025, total fees were $63,160. Amortization of financing fees for Cedar for the three-and six-months ended June 30, 2024 was $62,801. There was no amortization expense for Arin during the three or six-months ended June 30, 2024.

Notes Payable-Senior Secured Promissory Notes

During the first quarter of 2025, the Company repaid in full all outstanding senior secured promissory notes issued in 2024 to an accredited investor. On February 5, 2025, in connection with the execution of the SPA, the Company paid the remaining principal and accrued interest on the third and final outstanding note, thereby fully extinguishing the Company’s debt obligations to the investor under the 2024 note issuances.

In addition, the accredited investor elected to convert an aggregate principal and interest amount of $483,751 of the notes into 17,265 shares of the Company’s common stock in accordance with the terms of the applicable note agreements. The Company also settled all vested and outstanding warrants previously held by the investor. Two of the three warrants were exercised for a total of 10,974 shares of common stock. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of all vested warrants held by the investor.

On January 8, 2025, the Company and the accredited investor entered into that certain Waiver, waiving the Event of Default (as defined) under these senior secured promissory notes. The waiver included, among other provisions, waiving the rights to all default penalties, default interest, the acceleration of any amounts and waiving the restriction for the Company to enter into a variable rate transaction, of which the consummation could be considered an event of default, provided the proceeds from such financing are used to repay, in full, the notes described above.

On January 22, 2025, the Company and the Holder signed an amendment No. 1 to the Waiver. Pursuant to the Amendment, the Company shall pay 100% of any cash proceeds raised by the Company from the sale of securities pursuant to its Registration Statement on Form S-3 to the Holder first towards the repayment of the Redemption Price until it is paid in full, and after that towards the repayment of the Notes. The Amendment also provides that, if the Redemption Agreement becomes null and void pursuant to the terms of the Redemption Agreement, then all Proceeds previously paid by the Company to the Holder pursuant to the Redemption Agreement shall instead be applied towards the repayment of the Notes.

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

The interest expense incurred for these senior secured promissory notes was $0 and $23,798 for the three-months and six-months ended June 30, 2025, respectively. The interest expense incurred for the senior secured promissory notes was $76,301 and $90,922 for the three-months and six-months ended June 30, 2024, respectively.

Notes Payable-Promissory Note

On September 27, 2024, the Company entered into a promissory note payable whereby the Company borrowed $200,000 bearing interest at 12.5% per annum. The note was payable in three-monthly installments of $75,000. The proceeds of the note were used to pay down the senior secured promissory note entered into in February 2024. The remaining balance on the note as of December 31, 2024 was $148,725. This note was fully repaid in February 2025. The interest expense incurred for the promissory note was $1,276 during the first quarter of 2025.

Acquisition Settlement Agreement

In October 2024, the Company entered into an acquisition settlement agreement with the former owner of an acquired business. Under the terms of the agreement, the Company agreed to pay $1.0 million in equal installments of $11,905 per month over seven years, beginning November 1, 2024.

Economic Injury Disaster Loans

During 2024, the Company acquired franchises that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $147,100. The Company acquired the EIDL Loans which have terms similar to the Company’s existing EIDL loans. The EIDL Loans mature in 2050 and bear interest at a rate of 3.75% per annum. The interest expense incurred for the EIDL loans were $6,228 and $13,170 for the three-months and six-months ended June 30, 2025 and 2024, respectively.

Future maturities of EIDL term debt as of June 30, 2025, were as follows:

	June 30,
Economic Injury Disaster Loans-Future Maturities	2025
2025 - remainder of the year	$	2,950
2026		5,900
2027		5,900
2028		5,900
2029		5,900
2030		5,900
Thereafter		611,882
Total	$	644,332

Total Notes Payable as of June 30, 2025 and December 31, 2024 were as follows:

	June 30,			December 31,
Notes Payable	2025			2024
Senior secured promissory note (“SSPN”) #1	$	-		$	106,192
SSPN #2		-			1,316,000
SSPN#3		-			468,000
SSPN #4		7,297,000			-
Promissory note payable		-			148,725
Economic injury disaster loans (EIDL)		644,332			647,630
Acquisition Settlement Agreement		904,762			976,190
Total	$	8,846,094		$	3,662,737

Current portion:
Less: current portion-SSPNs		-			(1,890,192	)
Less: current portion-Promissory note payable		-			(148,724	)
Less: current portion-EIDL		(5,900	)		(5,900	)
Acquisition Settlement Agreement		(142,857	)		(142,857	)
Notes payable, net of current	$	8,697,337		$	1,475,064

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

Note 6 — Commitments and Contingencies

Leases

The Company has operating leases for office space in several states. Lease terms are negotiated on an individual basis. Generally, the leases have initial terms ranging from one to five years. Renewal options are typically not recognized as part of the right-of-use assets and lease liabilities as it is not reasonably certain at the lease commencement date that the Company will exercise these options to extend the leases. Leases with an initial term of twelve-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term.

The Company leases its corporate office from an entity controlled by the Company’s CEO. In addition, some of the entities acquired lease their offices from their former owners, who now hold a minority interest in those entities.

During January 2025, the Company entered into a new lease for office space in Orlando, FL. The Orlando lease requires monthly payments of $5,170. The Orlando lease is initially for a five-year term, with no written option for renewal.

Lease costs for the three-month periods ended June 30, 2025 and 2024 were $269,910 and $212,955, respectively, and lease costs for the six-month periods ended June 30, 2025 and 2024 were $480,018 and $420,870, respectively. Lease costs are included in general and administrative expenses in the condensed consolidated statements of operations.

Supplemental cash flow information related to leases is as follows:

	Six Months Ended
	June 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities		356,355		249,176
Right-of-use assets obtained in exchange for lease liabilities		392,208		609,049

Supplemental balance sheet information related to leases is as follows:

	June 30,		December 31,
	2025		2024
Assets:
Right-of-use assets	$	1,082,948	$	997,715

Liabilities:
Lease liability, current	$	407,905	$	473,733
Lease liability, noncurrent		711,687		545,759
	$	1,119,592	$	1,019,492

The Company’s leases do not provide a readily determinable implicit discount rate. The Company estimates its incremental borrowing rate as the discount rate based on the information available at lease commencement. The weighted average discount rate is 10.77%.

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

Future maturities on lease liabilities as of June 30, 2025, are as follows:

	June 30,
	2025
2025 – remainder of year	$	268,614
2026		483,888
2027		301,678
2028		130,929
2029 and thereafter		152,316
Total minimum lease payments		1,337,425
Less: imputed interest		(217,833	)
Present value of lease obligations		1,119,592
Less: current portion		(407,905	)
Long-term portion of lease obligations	$	711,687

There were no leases with residual value guarantees.

Legal Proceedings

From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, brokerage or real estate disputes, or other consumer protection statutes, ordinary-course brokerage disputes like the failure to disclose property defects, commission disputes, and vicarious liability based upon conduct of individuals or entities outside of the Company’s control, including agents and third-party contractor agents. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.

On February 13, 2023, Mr. Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000. Discovery is proceeding, mediation is scheduled for August 25, 2025. The Company denies the merits of the claims and intends on vigorously defending the litigation.

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

On January 3, 2024, Ms. Sarah Palmer filed a putative national class action complaint against La Rosa AG真人官方ty, LLC in the United States District Court, Middle District of Florida, Orlando Division. Ms. Palmer alleges that she received two (2) brief pre-recorded calls one week apart to her cell phone from La Rosa AG真人官方ty, LLC presenting her an employment opportunity as a real estate agent. Ms. Palmer seeks an undisclosed amount of monetary damages from La Rosa AG真人官方ty, LLC for the alleged would-be injurious, isolated and opportunistic employment gestures to her through a purported nationwide class action. Ms. Palmer claims that the defendant violated her privacy, annoyed and harassed her, constituted a nuisance, and occupied her telephone line. On March 12, 2024, La Rosa AG真人官方ty, LLC filed a motion to dismiss the case with prejudice. The action settled at mediation and was recently dismissed without prejudice pending completion of the settlement terms.

On March 5, 2025, Joshua Epstein filed an action in Osceola County, Florida Circuit Court alleging claims for Breach of Contract, Promissory Estoppel, Conversion, Unjust Enrichment, Breach of Good Faith and Fair Dealings, Fraud in the Inducement, and to recover alleged unpaid compensation from the defendant, La Rosa Holdings Corp. The Company strongly opposes and denies these claims. Mediation is scheduled for September 5, 2025. The Company denies the merits of the claims and intends on vigorously defending the litigation.

On June 5, 2025, an employee, who served as our Senior Human Resources and Payroll Specialist from July 10, 2024 to August 19, 2024, filed a civil lawsuit against the Company in the Circuit Court of Osceola County, Florida. The employee is seeking a jury trial claiming $50,000 in damages and that the Company terminated her employment in violation of SS 448.102(3). On July 9, 2025, the Company responded to the complaint with its Answer and Affirmative Defenses, effectively denying all of the plaintiff’s claims. The case remains pending.

The Company believes that the above claims are without merit, and it will vigorously defend against such claims. Moreover, these claims, in the aggregate, would not have a material adverse effect on the Company’s financial condition, business, or results of operations, should the Company’s defense not be successful in whole or in part. Except as stated herein, there is no other action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our Company or our officers or directors in their capacities as such.

Note 7 — Equity Shares and Warrants

Warrants are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s common stock at a fixed price. As of June 30, 2025, the Company’s stock price was $10.44.

During the six months ended June 30, 2025, the Company settled all vested and outstanding warrants previously held by the accredited investor holding the three senior secured notes payable from 2024. Two of the three warrants were exercised on a cashless basis for a total of 10,974 shares of common stock which represented 1,392,198 warrants. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of all vested warrants (1,202,244 warrants) held by the investor as of March 31, 2025.

Warrants issued to two investors who loaned money to the Company, Emmis Capital II, LLC and the Company’s CEO, Joseph La Rosa, on November 14, 2022 and December 2, 2022, respectively, included full ratchet antidilutive protections. The original warrants each covered 50,000 shares at a strike price of $5.00. By the end of 2024, due to various debt and equity transactions the new strike price on these warrants became $0.37, resulting in the number of shares covered by each warrant to increase to 667,913, and a 2024 deemed dividend of $1,476,044. In the first half of 2025, the warrants were revalued due to equity transactions triggering the ratchet antidilutive protections bringing the strike price of these warrants down to $0.14 resulting in the number of shares covered by each warrant to increase to 1,851,852, and a 2025 deemed dividend of $89,031.

At June 30, 2025, warrants outstanding that have vested and are expected to vest are as follows:

					Weighted
					Average
			Weighted		Remaining
	Number		Average		Contractual		Aggregate
	of		Exercise		Life		Intrinsic
	Shares		Price⁽¹⁾		(in years)		Value⁽¹⁾
	(audited)
Vested		3,705,093	$	0.43		2.40		—
Expected to vest		—		—		—		—
Total		3,705,093	$	0.43		2.40		—

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

Additional information with respect to warrant activity:

				Weighted
	Number			Average
	of			Exercise
	Shares			Price
Balance — December 31, 2024		3,931,657		$	0.66
Granted/Increase to existing warrants		1,328,000			0.19
Exercised		(1,392,198	)		0.37
Expired or forfeited		(1,202,244	)		0.37
Balance — March 31, 2025		2,665,215		$	0.60
Granted		1,039,878			0.14
Grants pursuant to a ratchet provision		—			—
Balance — June 30, 2025		3,705,093		$	0.43

As of June 30, 2025 and December 31, 2024, there was no unrecognized expense related to warrants.

The valuation methodology used to determine the fair value of the warrants was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the warrant.

Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s estimated volatility is an average of the historical volatility of peer entities over the shorter of i) the period equal to the expected life of the award or ii) the period over which the peer company was publicly traded. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the award at the grant date.

The weighted average fair value of warrants granted for the period ended June 30, 2025 and December 31, 2024 and the assumptions used in the Black-Scholes model are set forth in the table below.

	June 30,			December 31,
	2025			2024
	(unaudited)			(audited)
Weighted average fair value	$	0.06		$	0.87
Dividend yield		—			—
Expected volatility factor		65.8	%		72.7	%
Risk-free interest rate		3.7	%		4.3	%
Expected life (in years)		2.4			5.5

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

Note 8 — Stockholders’ Equity

Series B Preferred Stock

On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the Investor entered into, and closed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”) 6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada.

In connection with the issuance of the Series B Preferred Stock, the Company incurred direct and incremental expenses of $43,000 comprised of legal fees, which reduced the carrying value of the Preferred Stock.

Convertible preferred stock consisted of the following as of June 30, 2025:

June 30, 2025
Shares Authorized	Shares Issued and Outstanding		Carrying Value		Original Issue Price		Conversion Price		Common Shares Upon Conversion
6,000		6,000	$	8,261,000	$	0.0001	$	9.60		794,361

Convertible preferred stock is classified within permanent equity and recorded on the accompanying consolidated balance sheet at its issuance date fair value. The holders of the Preferred Stock have the following rights and preferences:

Voting

Holders of shares of Series B Preferred Stock have no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of share of capital stock of the Company, and are not entitled to call a meeting of such holders for any purpose, nor are they entitled to participate in any meeting of the holders of common stock of the Company, except as provided in the Section 16 of the Certificate of Designation or as otherwise required by the Nevada Revised Statutes.

Conversion Rights

Subject to the Maximum Percentage, holders of outstanding shares of Series B Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount (as hereinafter defined) thereof into shares of Common Stock at the Conversion Rate (as hereinafter defined). For such purpose: (i) “Conversion Amount” means the stated value thereof (or $1,000 per share) and any other unpaid amounts owed to such holder(s) under the Exchange Documents (as defined in the Exchange Agreement); (ii) “Conversion Rate” means the amount determined by dividing (x) such Conversion Amount by (y) the Conversion Price; (iii) “Conversion Price”, as of any date of determination and subject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $20.00 per share (subject to adjustment), or (B) the “Alternate Conversion Price”; and (iv) “Alternate Conversion Price” means the greater of (x) the “Floor Price” of $6.56 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 95% of the lowest VWAP (as defined in the Certificate of Designation) of the Common Stock during the seven (7) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. In the event the holder elects to convert the Series B Preferred Stock at the Alternate Conversion Price, the Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Certificate of Designation, 105% or (ii) otherwise, 125%,

A holder of Series B Preferred Stock does not have the right to convert any portion of their shares thereof to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of the 4.99% ( the “Maximum Percentage”), which may be raised or lowered to any other percentage not in excess of 9.99%, at the option of the holder upon 61 days’ prior written notice to the Company.

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

Subject to certain exceptions outlined in the Certificate of Designation, including, but not limited to, equity issuances in connection with its equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, Common Stock, at an effective price per share less than the Conversion Price of the Series B Preferred Stock then in effect, the Conversion Price of the Series B Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.

Redemption

Under the Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series B Preferred Stock at a price equal to the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the Common Stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice to the holder(s) of Series B Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company makes the entire redemption payment required to be made under the Certificate of Designation.

Dividends

The Series B Preferred Stock bears no dividends.

Liquidation

In the event of a Liquidation Event (as defined in the Certificate of Designation), the holders of the Series B Preferred Stock shall be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders, before any amount shall be paid to the holders of any shares of Common Stock, but pari passu with any parity stock then outstanding, an amount per share of Series B Preferred stock equal to the greater of (A) 125% of the conversion amount and (B) the amount per share that such Series B Preferred Stock holder would receive if converted into Common Stock immediately prior to the date of such payment.

Share Repurchase Program

On April 23, 2025, the Company’s Board of Directors approved a new Share Repurchase Program, which authorizes the Company to purchase up to an aggregate of $500,000 of the Company’s outstanding shares of common stock in the open market in accordance with all applicable securities laws and regulations. Repurchases under this program may be made at management’s discretion at the time and in the amounts determined by the Chief Executive Officer and Chief Operating Officer of the Company. The Share Repurchase Program has an expiration date of December 31, 2025.

Common Stock Issuances

On January 17, 2025, the Company issued 4,995 shares of common stock as an exercise of a prefunded warrant which was part of the securities purchase agreement with an institutional accredited investor, Abri Advisors, Ltd., a corporation organized under the laws of Bermuda, agreed to on November 1, 2024.

On February 5, 2025, the Company issued the CEO an aggregate of 36,665 unregistered shares of common stock of the Company, par value $0.0001 per share (the “Shares”) as a compensation for the services rendered pursuant to his employment agreement with the Company. The Company issued the Shares to the CEO in reliance on exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), available to the Company under Section 4(a)(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities. The stock compensation expense for the three and six-months ended June 30, 2025, was $0 and $1,160,381, respectively.

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

On February 20, 2025, the Company issued shares pursuant a consulting agreement entered into on January 1, 2025 in which the Company agreed to issue 21,545 shares of the Company’s common stock for services rendered. The stock compensation expense for the three-months and six-months ended June 30, 2025, related to this transaction amounted to $0 and $411,062, respectively.

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 3,750 and 2,500 shares of the Company’s common stock, respectively, for services rendered. The stock compensation expense for the six-months ended June 30, 2025, related to this transaction amounted to $122,570. There is no related compensation for the three months ended June 30, 2025.

On March 10, 2025, the Company issued 500 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation expense for the six-months ended June 30, 2025, related to this transaction amounted to $8,036. There is no related compensation for the three months ended June 30, 2025.

On March 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 3,125 shares of the Company’s common stock for services rendered. The stock compensation expense for the three-months and six-months ended June 30, 2025, related to this transaction amounted to $0 and $46,925, respectively.

On April 21, 2025, the Company issued the CEO an aggregate of 41,217 unregistered shares of common stock of the Company, par value $0.0001 per share as compensation for the services rendered pursuant to his employment agreement with the Company. The stock compensation expense for the three-months and six-months ended June 30, 2025, related to this transaction amounted to $444,319.

For the six-months ended June 30, 2025, the holder of our Senior Secured promissory notes converted 28,238 of the Company’s common stock as part of their First warrants and principal and interest conversions.

For the three-months and six-months ended June 30, 2025, the Company utilized their ATM and sold a total of 218,918 and 311,999, respectively, shares of the Company’s common stock for gross proceeds of $3,893,229 and $6,916,792, respectively and net proceeds of $3,741,282 and $6,658,876, respectively. In addition, due to the impacts of the reverse split of 80 shares to 1 included in proceeds from investors on the statement of changes in stockholders’ equity are 15 and 32 shares and additional capital of $3,673 and $1,791, for the three and six-months ended June 30. 2025, respectively.

For the three-months and six-months ended June 30, 2025, the Company issued 1,220 and 1,926, respectively, shares of the Company’s common stock pursuant to the Restricted Stock Unit (RSU) vesting with a value of $50,027 and $69,481, respectively.

Stock Option Awards

For the three-month and six-month periods ended June 30, 2025, the Company recorded stock-based compensation for employees and directors awards of $14,159 and $158,062, respectively. The Company did not realize any tax benefits associated with share-based compensation for these periods as the Company recorded a valuation allowance on all deferred tax assets.

At June 30, 2025, options outstanding that have vested and are expected to vest are as follows:

					Weighted
					Average
			Weighted		Remaining
	Number		Average		Contractual		Aggregate
	of		Exercise		Life		Intrinsic
	Shares		Price		(in years)		Value
Vested		49,961	$	122.88		8.7	$	-
Expected to vest		4,194		45.99		9.5		-
Total		54,155	$	116.92		8.8	$	-

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

Additional information with respect to stock option activity:

			Weighted
	Number		Average
	of		Exercise
	Shares		Price
Balance — December 31, 2024		48,836	$	124.66
Granted		4,069		55.94
Expired or forfeited		—		—
Balance — March 31, 2025		52,905	$	119.38
Granted		1,250		13.00
Expired or forfeited		—		—
Balance — June 30, 2025		54,155	$	116.92

During the six-months ended June 30, 2025, the Company issued an aggregate of 5,319 stock options. Of this amount, 2,500 options were granted to the Chief Executive Officer in connection with the closing of an acquisition on December 31, 2024, according to his employment agreement. The remaining 2,819 options were granted to contractors as part of their compensation packages.

The weighted average fair value of stock options granted in the quarters ended June 30, 2025 and 2024 and the assumptions used in the Black-Scholes model are set forth in the table below.

	June 30,			June 30,
	2025			2024
Weighted average fair value	$	0.57		$	1.22
Dividend yield		—			—
Expected volatility factor		68.5	%		67.9	%
Risk-free interest rate		4.5	%		4.0	%
Expected life (in years)		9.0			10.0

As of June 30, 2025, unrecognized compensation expense related to stock option awards totaled $119,712, to be expensed over the next 9.5 years. As of December 31, 2024, unrecognized compensation expense related to stock option awards totaled $92,892.

Restricted Stock Units

				Weighted
	Number			Average
	of			Exercise
	Shares			Price
Balance — December 31, 2024		1,191		$	78.66
Granted		8,096			33.68
Expired or forfeited		(352	)		60.42
Balance — March 31, 2025		8,935		$	37.74
Granted		187			12.32
Expired or forfeited		(1,264	)		41.28
Balance — June 30, 2025		7,858		$	37.17

On February 1, 2025, a Restricted Stock Unit (“RSU”) covering 50 shares granted to the Company’s Chief Technology Officer (“CTO”) vested. The Company withheld 15 shares to cover payroll tax withholding and issued 35 shares to the executive. The Company also granted a new RSU to the CTO on February 1, 2025, which will vest on the first anniversary of the grant.

During the six-month period ending June 30, 2025, the Company issued 8,258 RSU’s to agents as part of our agent incentive plan and 25 RSU’s to our CTO as part of his employment agreement.

For the three-month periods ending June 30, 2025 and 2024, the Company recorded $48,980 and $2,871, respectively, of share-based compensation expense related to the RSUs. For the six-month periods ending June 30, 2025 and 2024, the Company recorded $70,953 and $5,514, respectively, of share-based compensation expense related to the RSUs. As of June 30, 2025, unrecognized compensation expense related to the awards was $268,617, to be expensed over the next 1.6 years. The Company did not realize any tax benefits associated with share-based compensation for the three-month periods ended June 30, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.

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

Note 9 — Earnings Per Share

Basic income (loss) per share of common stock attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share of common stock attributable to common stockholders is computed by giving effect to all potential shares of common stock, including those related to the Company’s outstanding warrants, options and RSUs, to the extent dilutive. For certain periods presented, these potential shares were excluded from the calculation of diluted loss per share because their inclusion would be anti-dilutive. As a result, diluted loss per common share is the same as basic loss per common share for certain periods presented.

For the three-month period ended June 30, 2025, as measured in common stock there were 3,660,906 warrants outstanding, 794,361 of convertible Series B Convertible Preferred Stock, 30 outstanding Stock options and 92 unvested restricted stock awards included in the calculation of diluted weighted average shares outstanding, as such securities were dilutive, resulting in 4,455,389 potential common shares included in the calculation of diluted EPS. Diluted EPS includes the dilutive effect of securities when the average market price exceeds the exercise price of the securities, if any, and is calculated using the treasury stock method.

The following tables set forth common stock equivalents that have been excluded from the computation of dilutive weighted average shares outstanding as their inclusion would have been antidilutive:

	Six Months Ended
	June 30,
	2025		2024
Warrants		3,705,093		604,723
Options		54,155		48,444
Restricted stock units		7,858		343
Preferred stock Series B		794,361		—
Total		4,561,467		653,510

	Three Months Ended
	June 30,
	2025		2024
Warrants		44,187		604,723
Options		54,125		48,444
Restricted stock units		7,766		343
Preferred stock Series B		—		—
Total		106,078		653,510

Note 10 — Segments

The Company’s business is organized into six material reportable segments which aggregate 100% of revenue:

AG真人官方 Estate Brokerage Services (Residential)

Franchising Services

Coaching Services

Property Management

AG真人官方 Estate Brokerage Services (Commercial)

Title Settlement and Insurance

The reporting segments follow the same accounting policies used in the preparation of the Company’s condensed consolidated financial statements. The following represents the information for the Company’s reportable segments for the three-months and six-months ended June 30, 2025 and 2024, respectively.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Revenue by segment
AG真人官方 estate brokerage services (residential)	$	19,709,947		$	15,858,414		$	33,980,226		$	26,096,163
Franchising services		31,222			68,808			70,000			213,189
Coaching services		122,692			211,024			217,226			344,017
Property management		3,083,763			2,757,680			6,060,296			5,302,267
AG真人官方 estate brokerage services (commercial)		188,020			155,494			245,086			184,683
Title Settlement and Insurance		78,574			—			155,778
	$	23,214,218		$	19,051,420		$	40,728,612		$	32,140,319
Cost of goods sold by segment
AG真人官方 estate brokerage services (residential)	$	18,028,142		$	14,470,016		$	30,924,027		$	23,674,037
Franchising services		113,368			123,453			225,159			253,542
Coaching services		83,003			111,659			138,883			184,664
Property management		2,982,851			2,630,472			5,861,991			5,145,440
AG真人官方 estate brokerage services (commercial)		154,626			129,509			188,656			134,328
Title Settlement and Insurance		—			—			—			—
	$	21,361,990		$	17,465,109		$	37,338,716		$	29,392,011
Gross profit by segment
AG真人官方 estate brokerage services (residential)	$	1,681,805		$	1,388,398		$	3,056,199		$	2,422,126
Franchising services		(82,146	)		(54,645	)		(155,159	)		(40,353	)
Coaching services		39,689			99,365			78,343			159,353
Property management		100,912			127,208			198,305			156,827
AG真人官方 estate brokerage services (commercial)		33,394			25,985			56,430			50,355
Title Settlement and Insurance		78,574			—			155,778			—
	$	1,852,228		$	1,586,311		$	3,389,896		$	2,748,308

G&A by segment
AG真人官方 Estate Brokerage Services (Residential)	$	2,937,005		$	2,719,067		$	6,448,169		$	5,018,065
Franchising Services		30,619			10,211			110,277			11,916
Coaching Services		33,595			478			73,153			921
Property Management		90,859			10,714			104,898			21,567
AG真人官方 Estate Brokerage Services (Commercial)		36,576			(314	)		61,318			9,542
Title Settlement and Insurance		72,399			—			130,763			—
	$	3,201,053		$	2,740,156		$	6,928,578		$	5,062,011

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

In addition to the expenses from these segments, corporate other income (expenses), net were $79,811,929 and $(1,112,388), which resulted in the net income (loss) of $78,463,104 and $(2,266,233) for the three-months ended June 30, 2025 and 2024, respectively. Corporate other income (expenses), net were $13,697,099 and $4,617,508, which resulted in the net loss of $17,235,781 and $6,931,211 for the six-months ended June 30, 2025 and 2024, respectively.

The following table disaggregates the Company’s revenue based on the type of sale or service and the timing of satisfaction of performance obligations for the three-months and six-months ended June 30, 2025 and 2024, respectively.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Performance obligations satisfied at a point in time	$	19,684,804	$	15,783,451	$	33,706,356	$	25,775,770
Performance obligations satisfied over time		3,529,414		3,267,969		7,022,256		6,364,549
Revenue	$	23,214,218	$	19,051,420	$	40,728,612	$	32,140,319

Note 11 — Subsequent Events

Equity Issuances

On July 7, 2025, the Company issued 313 shares of common stock pursuant to a consulting agreement for services rendered.

On July 8, 2025, the Company issued the remaining amount of common stock of 331 shares, pursuant to the consulting agreement entered into on February 20, 2025.

On July 14, 2025, the Company entered into an exchange agreement with certain holder (the “Holder”) of a common stock purchase warrant to purchase 1,851,852 shares of common stock, at $0.135 per share, issued by the Company to the Holder on November 14, 2022. Pursuant to such exchange agreement, the Holder’s warrant was cancelled and in exchange, the Company issued an aggregate of 75,000 shares of common stock to the Holder.

On July 14, 2025, the Company entered into a consulting agreement pursuant to which the Company agreed to issue 50,000 shares of the Company’s common stock for services rendered.

On July 17, 2025, the Company entered into an exchange agreement with Joseph La Rosa, its Chief Executive Officer and holder of a common stock purchase warrant to purchase 1,851,852 shares of common stock, at $0.135 per share, issued by the Company to Mr. La Rosa on December 2, 2022. Pursuant to such exchange agreement, Mr. La Rosa’s warrant was cancelled and in exchange, the Company issued Mr. La Rosa an aggregate of 75,000 shares of common stock.

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

In July 2025, the Company utilized their ATM and sold a total of 75,000 shares of the Company’s common stock.

On August 11, 2025, the Company issued its directors, officers, certain employees and consultants an aggregate 143,711 unregistered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”).

On August 11, 2025, the Company issued 75,000 unregistered shares of common stock to Ross Carmel, as the designee of its legal counsel, Sichenzia Ross Ference Carmel LLP, in exchange for amounts payable for services rendered to the Company. The shares were issued to Mr. Carmel pursuant to Second Amended 2022 Plan.

Subsequent to June 30, 2025, the Company issued an additional 450 shares from the vesting of RSU grants as part of the Company’s agent incentive plan.

Reverse Split

On July 2, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation, as amended (the “Certificate of Amendment”), with the Secretary of State of Nevada to effect an 1-for-80 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), issued and outstanding, effective as of 12:01 a.m. EST on July 7, 2025, (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, every eighty shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock. No fractional shares were issued as a result of the Reverse Stock Split, fractional entitlements were rounded up to the next whole number. The Reverse Stock Split reduced the number of shares of Common Stock outstanding from 58,323,795 shares to 729,113 shares. The number of authorized shares of Common Stock under the Articles of Incorporation remained unchanged at 2,050,000,000 shares and the par value of the Common Stock remained $0.0001 per share. The split also brought the Company back into a “Controlled Company” Status with the CEO owning more than 50% of the voting power.

Other Subsequent Events

On July 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders approved the Second Amended 2022 Plan. Pursuant to the Second Amended 2022 Plan (i) the total number of shares of common stock subject to the plan was revised from 156,250 shares (as adjusted for the 80-for-1 reverse stock split effected by the Company on July 7, 2025) to 374,961 shares to ensure sufficient shares are available for future grants, and (ii) the term “Consultant” was clarified to include not only a person, including an advisor, engaged by the Company, its subsidiary or affiliate to render services to the Company or its subsidiary, but also a legal entity wholly-owned by such person. The Second Amended 2022 Plan replaced the Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan adopted on November 19, 2024 by the stockholders of the Company, in its entirety. On July 11, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On July 21, 2025, the Company filed a definitive preliminary statement on Schedule 14C with the SEC and commenced mailing the definitive information statement to stockholders of record as of the close of business on July 9, 2025. Such stockholders’ approval and the Second Amended 2022 Plan became effective on August 11, 2025.

On August 4, 2025, the Company and an institutional investor (“Investor”) entered into an Equity Purchase Facility Agreement (the “EPFA”), pursuant to which, the Company has the right to issue and sell to the Investor up to $150 million in newly issued shares of the Company’s common stock. The term of the facility provided under the EPFA expires on the earlier to occur of (i) the first day of the next month following the 36-month anniversary of the first trading date after the Agreement Date and (ii) the date on which the Investor shall have made payment of Advances pursuant to the EPFA for Common Shares equal to the Commitment Amount; provided that the Company may terminate the EPFA effective upon five trading days’ prior written notice to the Investor (provided that there are no outstanding advance notices the Common Shares under which have yet to be issued).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis are intended to help investors understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion together with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Cautionary Statement Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include information relating to future events, future financial performance, financial projections, strategies, expectations, competitive environment and regulation. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

●

our expectations regarding consumer trends in residential real estate transactions;

●

our expectations regarding overall economic and demographic trends, including the continued growth of the U.S. residential real estate market;

●

our ability to grow our business organically in the various local markets that we serve;

●

our ability to attract and retain additional qualified agents and other personnel;

●

our ability to expand our franchises in both new and existing markets;

●

our ability to increase the number of closed transactions sides and sides per agent;

●

our ability to cross-sell our services among our subsidiaries;

●

our ability to maintain compliance with the law and regulations of federal, state, foreign, county and local governmental authorities, or private associations and governing boards;

●

our ability to expand, maintain and improve the information technologies and systems that we rely upon to operate;

●

our ability to prevent security breaches, cybersecurity incidents and interruptions, delays and failures of our technology infrastructure;

●

our ability to retain our founder and current executive officers and other key employees;

●

our ability to identify quality potential acquisition candidates in order to accelerate our growth;

●

our ability to manage our future growth and dependence on our agents;

●

our ability to maintain the strength of our brands;

●

our ability to maintain and increase our financial performance;

●

the market price for our common stock may be particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and minimal profits, which could lead to wide fluctuations in our share price;

●

there have recently been recent instances of extreme stock price run-ups followed by rapid price declines and stock price volatility seemingly unrelated to company performance following a number of recent initial public offerings, particularly among companies, like ours, that have had relatively smaller public floats;

●

sales of our common stock by us or our stockholders, which may result in increased volatility in our stock price; and

●

other factors, including the risks contained in the section entitled “Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S. Securities Exchange Commission (“SEC” or “Commission”) on April 15, 2025, relating to our industry, our operations, and results of operations.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements.

Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us on the date of this Quarterly Report on Form 10-Q. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Quarterly Report on Form 10-Q.

Business Overview

We are the holding company for six agent-centric, technology-integrated, cloud-based, multi-service real estate segments.

Our business was founded by Mr. Joseph La Rosa, a successful real estate developer, business and life coach, author, podcaster, and public speaker. Mr. La Rosa’s self-help book “Do It Now” is a roadmap to personal success and well-being based on his transformative theories of family, passion and growth. His philosophy, seminars and educational forums have attracted numerous successful realtors that have spurred the growth of our business.

In addition to providing person-to-person residential and commercial real estate brokerage services to the public, we cross-sell ancillary technology-based products and services primarily to our sales agents and the sales agents associated with our franchisees. Our business is organized based on the services we provide internally to our agents and to the public, which are residential and commercial real estate brokerage, franchising, real estate brokerage education and coaching, property management, and title services. Our real estate brokerage business operates primarily under the trade name La Rosa AG真人官方ty. We have 26 La Rosa AG真人官方ty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, North Carolina and Puerto Rico. The Company also has 6 La Rosa AG真人官方ty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage offices, that pay us fees in 7 states in the United States and Puerto Rico. We also have recently opened LR AG真人官方ty Spain, which is a full-service brokerage office located primarily in Malaga, Spain. Additionally, the Company has a full-service escrow settlement and title company in Florida.

Our real estate brokerage offices, both corporate and franchised, are staffed with 3,001 licensed real estate brokers and sales associates as of June 30, 2025.

Our franchised offices are currently:

Name		Location
La Rosa AG真人官方ty Bayamón LLC		Bayamón, Puerto Rico
La Rosa AG真人官方ty Internacional, LLC		Celebration, Florida
La Rosa AG真人官方ty Central Florida, LLC		Davenport, Florida
La Rosa AG真人官方ty Jacksonville, LLC		Jacksonville, Florida
La Rosa AG真人官方ty Kendall, LLC		Miami, Florida
The AG真人官方ty Experience Powered By LRR LLC		St. Cloud, Florida

We have built our business by providing the home-buying public with well-trained, knowledgeable realtors who have access to our proprietary and third-party in-house technology tools and quality education and training, and valuable marketing that attracts some of the best local realtors who provide value-added services to our home buyers and sellers that are attracted to our brands. We give our real estate brokers and sales agents who are seeking financial independence a turnkey solution and support them in growing their brokerages while they fund their own businesses.

Our agent-centric commission model enables our sales agents to obtain higher net commissions than they would otherwise receive from many of our competitors in our local markets. They can then use these additional commissions to reinvest in their businesses or as take-home profit. We believe that this is a strong incentive for them to compete against the discount, flat fee and internet brokerages that have sprung up in the past several years. Instead of us taking a greater share of their income, our agents pay what we believe to be reduced rates for training and mentorship and our proprietary technology. Our franchise model has a similar pricing methodology, permitting the franchise owner the freedom to operate their business with minimal control and lower expense than other franchise offerings.

Moreover, we believe that our proprietary technology, training, and the support that we provide to our agents at a minimal cost to them is one of the best offered in the industry.

Our business stands on three pillars: Family, Passion, and Growth. We believe that our support and philosophy have attracted and will continue to attract and retain the highest producing realtors in our local markets. We believe that our focus on the interaction between our human agents and their clients is a strong weapon against internet-only commodity websites and the low touch discount brokerages. Our agent count continues to grow organically and through acquisition, we attribute our organic growth to the positive culture created in our Company and the competitive plans that we offer our agents. By creating a custom solution and a unique experience, we believe that our agents are able to guide their clients seamlessly through what may be their most expensive lifetime purchase.

On October 12, 2023, we consummated our IPO. Following our IPO, during the fiscal year ended December 31, 2023, we acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa AG真人官方ty, Inc. (formerly, La Rosa AG真人官方ty Lake Nona Inc.), Horeb Kissimmee AG真人官方ty, LLC, La Rosa AG真人官方ty Premier, LLC, La Rosa AG真人官方ty Orlando, LLC, and 100% ownership of the following franchisees of the Company: La Rosa CW Properties, LLC and La Rosa AG真人官方ty North Florida LLC. In December 2023, we also formed our majority owned subsidiary La Rosa AG真人官方ty Texas LLC. During the fiscal year ended December 31, 2024, we acquired majority ownership of the following franchisees and affiliates of the Company: La Rosa AG真人官方ty Georgia LLC, La Rosa AG真人官方ty California, La Rosa AG真人官方ty Lakeland LLC DBA La Rosa AG真人官方ty Prestige, and La Rosa AG真人官方ty Success LLC, and 100% ownership of La Rosa AG真人官方ty Winter Garden LLC, BF Prime LLC, Nona Title Agency LLC, La Rosa AG真人官方ty Beaches LLC, and Baxpi Holdings. Additionally, we acquired the remaining non-controlling interest portions of Nona Legacy Powered By La Rosa AG真人官方ty, Inc. (formerly, La Rosa AG真人官方ty Lake Nona Inc.) and La Rosa AG真人官方ty Premier, LLC, making them both 100% owned entities.

In December 2024, the Company opened its first office and wholly owned subsidiary in North Carolina, La Rosa AG真人官方ty NC LLC. In January 2025, the Company formed LR Luxury, LLC, engaged mostly in the residential real estate brokerage business. In April 2025, the Company formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents. In 2025, we also formed LR AG真人官方ty Spain, S.L., our wholly owned subsidiary in Spain.

We continuously search for potential acquisition targets. Management is in discussions with several franchisees and other entities; however, any future agreements may have terms that are materially different than the terms of completed acquisitions. We cannot guarantee that the Company will actually enter into any binding acquisition agreements with any of those companies. If we do, we cannot assure you that the terms of such acquisitions will be substantially the same or better for the Company than those of completed acquisitions.

Recent Developments

Reverse Stock Split

On July 2, 2025, the Company effected a 1-for-80 reverse stock split of the common stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on July 7, 2025. On February 4, 2025, the Company’s stockholders holding a majority of the voting power of the Company by a written consent approved the amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, to effect a reverse stock split of the Company’s common stock at a ratio in the range of 1-for-20 to 1-for-100, with such ratio to be determined by the Company’s Board of Directors. Such resolution became effective on March 28, 2025, or twenty (20) days after the Company filed with the SEC and mailed to its stockholders respective Information Statement on Schedule 14C on or approximately March 7, 2025. Following such stockholders’ approval, the Board of Directors determined to effect the reverse stock split at a ratio of 1-for-80 (“Reverse Stock Split”). As a result of the Reverse Stock Split, every eighty (80) shares of issued and outstanding common stock were automatically combined into one (1) issued and outstanding share of common stock. Unless noted otherwise, all share and the price per share information for all periods presented in this report have been retroactively adjusted for the Reverse Stock Split.

Increase of the Authorized Stock

On February 4, 2025, our Board of Directors, and the stockholders holding a majority of the voting power of the Company approved the Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of the Company’s authorized shares of common stock to two billion (2,000,000,000) shares of common stock, and to restate Sections 3.01 and 3.02 thereof to reflect such increase. Such an increase became effective on June 2, 2025.

Nasdaq Notice Regarding Minimum Bid Price Requirement

On October 10, 2024, the Company received a letter from the Nasdaq Listing Qualifications Department notifying us that, for the 30 consecutive business day period between August 28, 2024 through October 9, 2024, our common stock had not maintained a minimum closing bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). On July 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications Department has determined that for the last 10 consecutive business days, from July 7 through July 18, 2025, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with the Bid Price Rule, and this matter is now closed.

Nasdaq Notice Regarding Stockholders’ Equity Requirement

On May 30, 2025, the Company received a letter from Nasdaq indicating that, because the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the period ended March 31, 2025 was $(83,377,044), the Company is no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing.

Nasdaq’s letter provided the Company with 45 calendar days, or until July 14, 2025, to submit a plan to regain compliance. On July 14, 2025, the Company submitted to Nasdaq its plan to regain compliance. If the plan is accepted, the Company can be granted up to 180 calendar days from May 30, 2025 (or until November 26, 2025), to evidence compliance.

Nasdaq Notice Regarding Filing Deficiency

On May 21, 2025, the Company also received a notice (the “Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 (the “Filing”) with the SEC.

The Notice informed the Company that, under Nasdaq rules, the Company has 60 calendar days to submit a plan to regain compliance, and if the Staff accepts such plan, they can grant an exception of up to 180 calendar days from the Filing’s due date (or until November 17, 2025) to regain compliance. The Company regained compliance with Nasdaq Listing Rule 5250(c)(1) as a result of filing of its Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2025 on May 29, 2025.

ATM Offering

On November 22, 2024, the Company entered into a sales agreement (“ATM Agreement”) with A.G.P./Alliance Global Partners, as sales agent, relating to the sale of common stock. During the three month ended June 30, 2025, the Company issued an aggregate of 218,918 shares of common stock pursuant to such ATM Agreement for net proceeds of $3,741,282. The Company paid the sales agent compensation with respect to sale of such shares in the amount of $151,947.

Change in Controlled Company Status

As of December 31, 2024, the Company qualified as a “controlled company” because more than 50% of the voting power for the election of directors was held by Joseph La Rosa, our Chief Executive Officer and Chairman. As a result of certain sales under the Company’s previously announced at-the-market offering, as of April 16, 2025 Mr. La Rosa no longer held more than 50% of the voting power for the election of directors. As a result, the Company was no longer considered a “controlled company” for the purposes of the listing requirements of the Nasdaq Capital Market. Since the Company did not avail itself of certain of the controlled company exemptions afforded by Nasdaq to controlled companies, such change in the Company’s status did not result in any corporate governance changes for the Company. The Company regained a “controlled company” status on July 7, 2025 because as a result of Reverse Stock Split, Mr. Joseph La Rosa became a holder of more than 50% of the voting power of the Company.

The Facility

On August 4, 2025 (the “Agreement Date”), the Company entered into the Equity Purchase Facility Agreement (“Facility Agreement”) with an institutional investor (the “Facility Investor”), pursuant to which the Facility Investor committed to purchase, subject to certain conditions and limitations, up to $150,000,000 (the “Commitment Amount”) in newly issued shares of the common stock of the Company (the “Facility”). In connection with the Facility, on the Agreement Date the Company also entered into a Registration Rights Agreement (the “RRA”) with the Facility Investor.

Pursuant to the terms of the Facility Agreement, the issuance of shares of common stock in excess of 19.99% of the Company’s outstanding shares of common stock is conditional upon obtaining the approval of the Company’s stockholders in accordance with the rules and regulations of the Nasdaq Capital Market. On August 6, 2025, the stockholders, holding approximately 96.3% of the votes of our outstanding voting stock approved the Facility Agreement and RRA, including, but not limited to the issuance of the shares of common stock in excess of 19.99% of the Company’s issued and outstanding common stock at a price less than the minimum price required by the Nasdaq Capital Market, in compliance with the rules and regulations of the Nasdaq Capital Market. On August 8, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such approval. The Company filed a definitive information statement on Schedule 14C with the SEC and commenced mailing of the definitive information statement to stockholders of record on August 18, 2025. Such stockholders’ approval will become effective 20 calendar days after commencement of mailing, or September 7, 2025.

February 2025 Financing and June 2025 Exchange Agreement

On February 4, 2025 (“Closing Date”), we entered into the SPA with an institutional investor (“2025 Investor”) pursuant to which we agreed to issued and sell to the 2025 Investor upon the terms and conditions set forth in the SPA on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”). The Incremental Warrants and Initial Note were issued to 2025 Investor on the Closing Date. The purchase price paid by 2025 Investor under the SPA for the Initial Note and Incremental Warrants was $4,963,750, which was used by the Company to pay-off certain indebtedness, pay certain outstanding fees and expenses, acquisitions and general corporate purposes. The Company also granted 2025 Investor registration rights in the shares of common stock issuable pursuant to the SPA and conversion of the Notes. The Company and its subsidiaries also entered into a security agreement with or in favor of the 2025 Investor pursuant to which the Company and its subsidiaries granted the 2025 Investor a security interest in certain property of the Company and its subsidiaries to secure the Company’s obligations under the Notes. The Company also agreed to obtain stockholder approval for the issuance of more than 19.99% of the issued and outstanding common stock in this financing.

On the Closing Date, as required by the SPA, stockholders holding a majority of the voting power of the Company, approved (i) the issuance of the Initial Note, the Incremental Warrants and Incremental Notes, all Interest Shares and all of the Conversion Shares and Incremental Conversion Shares (each as defined in the SPA) in excess of 19.99% (without regard to any limitation on conversion or exercise thereof) of the Company’s issued and outstanding common stock at a price less than the minimum price required by the Nasdaq in accordance with Nasdaq Listing Rules 5635(b) and 5635(d); (ii) authorization to complete a reverse split of our common stock; and (iii) authorization to increase the number of authorized shares of our common stock to ensure that the Company has a sufficient number of authorized shares reserved for issuance to equal at least 200% of the maximum number of shares issuable upon conversion of the Notes, as determined under the Securities Purchase Agreement. Such approval was effective on March 27, 2025, or 20 days after commencement of mailing of the definitive information statement regarding this approval to the stockholders of the Company.

On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the 2025 Investor entered into, and closed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the 2025 Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”) 6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada. The Initial Note remains outstanding post-Exchange.

On June 26, 2025, the Company and 2025 Investor signed Amendment No. 1 to the Initial Note to correct an administrative error in the definition of maturity date and alternate conversion price in the Initial Note.

Pursuant to the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company in excess of 19.99% of the Company’s outstanding shares of common stock is conditional upon obtaining the approval of the Company’s stockholders in accordance with the rules and regulations of the Nasdaq Capital Market. On July 9, 2025, Joseph La Rosa and JLR-JCCLT1 Land Trust, controlled by Mr. La Rosa, approved such conversion and the terms of the Exchange Agreement in their capacity as stockholders of the Company holding a majority of the voting power of the Company by written consent in lieu of having a stockholders meeting. On July 11, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On July 21, 2025, the Company filed a definitive information statement on Schedule 14C with the SEC and commenced mailing the definitive information statement to stockholders of record as of the close of business on July 9, 2025. Such stockholders’ approval became effective on August 11, 2025.

Second Amended and Restated 2022 La Rosa Holdings Corp. Equity Incentive Plan

On July 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders holding a majority of the voting power of the Company (by written consent in lieu of a stockholders’ meeting) approved the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). Pursuant to the Second Amended 2022 Plan (i) the total number of shares of common stock subject to the plan was revised from 156,250 shares (as adjusted for the 80-for-1 reverse stock split effected by the Company on July 7, 2025) to 374,961 shares to ensure sufficient shares are available for future grants, and (ii) the term “Consultant” was clarified to include not only a person, including an advisor, engaged by the Company, its subsidiary or affiliate to render services to the Company or its subsidiary, but also a legal entity wholly-owned by such person. The Second Amended 2022 Plan will replace the Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan adopted on November 19, 2024 by the stockholders of the Company, in its entirety. On July 11, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On July 21, 2025, the Company filed a definitive information statement on Schedule 14C with the SEC and commenced mailing the definitive information statement to stockholders of record as of the close of business on July 9, 2025. Such stockholders’ approval and the Second Amended 2022 Plan became effective on August 11, 2025.

European Expansion

On February 25, 2025, the Company announced the launch of its European expansion initiative with the engagement of Joaquín Nuevo Alarcón as Area Developer for Spain, effective as of March 1, 2025. This move marks the Company’s first step in international expansion beyond the United States and Puerto Rico and in a broader European strategy designed to bring its disruptive, agent-first business model to the global real estate market. As part of its long-term growth strategy, the Company is focused on establishing a strong presence in Spain while laying the groundwork for further expansion into additional high-growth real estate markets across Europe. The Company plans to introduce franchise opportunities, brokerage offices, and technology-driven services to scale its operations internationally.

Stock Repurchase Program

On April 23, 2025, the Company’s Board of Directors approved a new Share Repurchase Program, which authorized the Company to purchase up to an aggregate of $500,000 of the Company’s outstanding shares of common stock in the open market in accordance with all applicable securities laws and regulations. Repurchases under this program may be made at management’s discretion at the time and in the amounts determined by the Chief Executive Officer and Chief Operating Officer of the Company. The Share Repurchase Program has an expiration date of December 31, 2025.

Change of Auditor

On April 29, 2025, Marcum LLP (“Marcum”), the Company’s independent registered accounting firm, resigned effective immediately. On April 29, 2025, the Company, with the approval of the Audit Committee (the “Committee”) of the Board of Directors, accepted their resignation. On November 1, 2024, CBIZ CPAs P.C. (“CBIZ CPAs”) acquired the attest business of Marcum. On April 29, 2025, the Company, with the approval of the Committee, engaged CBIZ CPAs to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025 to be effective immediately.

Letter of Intent with MiiX Financial

On June 12, 2025, the Company announced that it has entered into a non-binding Letter of Intent with MiiX Financial Holdings Trust (“MiiX’) to jointly implement and distribute MiiX’s proprietary residential financing solutions for all credit levels across La Rosa’s network of agents and all of its listings. The cooperation is intended to establish a long-term strategic alliance between the two companies, centered on MiiX’s groundbreaking platform that eliminates traditional credit requirements and provides accessible homeownership solutions for buyers of all income and credit levels. The platform also introduces advanced real estate monetization tools capable of enabling same-day property purchasing, trading, settlement, and recordings similar to the speed and efficiency of financial markets.

My Agent Account Version 4.0

On July 7, 2025, the Company announced the launch of My Agent Account (MAA) Version 4.0, a major enhancement to the Company’s proprietary agent platform. The new version, which went live on July 1, 2025, features a fully integrated Transaction Management module that is intended to deliver significant cost savings to the Company by improving efficiency, reducing manual processes, and eliminating reliance on expensive third-party systems. MAA, the Company’s proprietary platform, was designed to empower agents with a comprehensive suite of tools and resources. Serving as a centralized hub, it enables agents by streamlining daily operations, consolidating essential business tools, and reducing administrative workload. With the introduction of the new transaction module, the Company has significantly improved the platform’s ability to manage workflows. All La Rosa agents have access to MAA and are required to pay an annual subscription fee per agent for it.

Description of Our Revenues

Our financial results are primarily driven by the total number of sales agents in our Company, the number of sales agents closing residential real estate transactions, the number of sales agents utilizing our coaching services, the number of agents who work with our franchisees, and the number of properties under management. We increased our agent count by 18.4%, from 2,535 at June 30, 2024 to 3,001 at June 30, 2025.

The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue derived from commissions paid by consumers who transact business with our and our franchisees’ agents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees, and our franchisees’ agents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (vii) fees generated from title services revenue and insurance and (viii) fees from our events and forums.

The majority of our revenue is derived from fees and dues based on the number of agents working under the La Rosa AG真人官方ty brand. Due to the low fixed cost structure of both our Company and franchise models, the addition of new sales agents generally requires little incremental investment in capital or infrastructure. Accordingly, the number of commission producing sales agents in our Company and our franchisees is the most important factor affecting our results of operations and the addition of new agents can favorably impact our revenue and our earnings before interest, taxes, depreciation and amortization (“EBITDA”). Historically, the number of agents in the residential real estate industry has been highly correlated with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from fees tied to the number and size of real estate transactions closed by our agents. While the Company was not named as a defendant in any of the recent class action lawsuits alleging antitrust violations, it is possible that it could be a litigant at some point in the future. Several of these lawsuits have been settled (see our Annual Report on Form 10-K for 2024 fiscal year “Risk Factors – Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results). These settlements will result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.

Key factors affecting our performance

As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting our results of operations.

Seasonality

Our business is affected by the seasons and weather. The spring and summer seasons, when school is out, have typically resulted in higher sales volumes compared to fall and winter seasons. With the slowdown in the later months, we have experienced slower listing activity, fewer transaction closings and lower revenues and have seen more agent turnover as well. Bad weather or natural disasters also negatively impact listings and sales which reduces our operating income, net income, operating margins and cash flow. While this pattern is fairly predictable, there can be no assurance that it will continue. Moreover, with the impact of climate change, we expect more business disruptions in the coming years, many of which could be unpredictable and extreme.

Our revenues and operating margins will fluctuate in successive quarters due to a wide variety of factors, including seasonality, weather, health exigencies, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, and changes in mortgage interest rates. This fluctuation may make it difficult to compare or analyze our financial performance effectively across successive quarters.

Inflation and Market Interest Rates

The U.S. Federal Reserve continues to take action intended to address inflation. The Federal Reserve Board maintained the federal funds rate at 533 basis points from August of 2023 through mid-September 2024, when it was reduced to 483 basis points. In June 2025, the federal funds rate was 433 basis points. The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments. During the second half of 2022, the benchmark 30 year fixed conforming mortgage rate rose above 6% for the first time since 2008, according to Freddie Mac data, and reached a peak of about 8% during the second half of 2023. That interest rate sat in between 6.62% and 6.85% during 2024 and was 6.77% by the end of June 2025. Consequently, housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. In June 2025, existing-home sales fell 2.7% month-over-month to a seasonally adjusted rate of 3.93 million. Year-over-year, sales remained constant. According to National Association of AG真人官方tors Chief Economist Lawrence Yun, “Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market. More supply is needed to increase the share of first-time homebuyers in the coming years even though some markets appear to have a temporary oversupply at the moment.”

Recent Legal Challenges to Sales Agents’ Commission Structure

Recent developments in the real estate industry have seen increased scrutiny and legal challenges related to the structure of real estate agent commissions. Legal actions and regulatory inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive practices associated with the traditional commission model. Courts and regulatory bodies may be increasingly focused on ensuring transparency in commission structures, potentially leading to reforms that impact the earnings and business models of real estate professionals. Changes in legislation or legal precedents could impact the standard practices of commission-sharing between listing agents and buyer’s agents and may adversely affect our business model and revenues. On October 31, 2023, a federal jury in Missouri found that NAR and certain companies conspired to artificially inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023, while these and other plaintiffs have filed similar lawsuits against a number of other large real estate brokerage companies. We have not, as of the date hereof, been named as a defendant in any antitrust litigation. On or about March 15, 2024, NAR agreed to settle these lawsuits, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. This settlement resolves claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below and is subject to court approval. Due to this litigation, there will be rule changes for the NAR. In the settlement, effective mid-July 2024, NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers’ agents. However, the direct and indirect effects, if any, of the judgment upon the real estate industry are not yet entirely clear.

There could also be further changes in real estate industry practices. All of this has prompted discussion of changes to rules established by local or state real estate boards or multiple listing services. All of this may require changes to many brokers’ business models, including changes in agent and broker compensation. For example, we will likely have to develop mechanisms and a plan that enable buyers and sellers to negotiate commissions. The Company will continue to monitor ongoing and similar antitrust litigation against our competitors. However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant.

Cybersecurity

Our business faces cybersecurity risks that could have a material adverse effect on our business operations, financial condition, and reputation. Key factors contributing to cybersecurity risks include, but are not limited to:

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Constantly Evolving Threat Landscape: The landscape of cybersecurity threats is constantly evolving, with new attack vectors, malware, and vulnerabilities emerging regularly. We may not be able to anticipate or mitigate all potential threats effectively.

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Data Vulnerability: We collect, store, and process sensitive customer and corporate data, making us a target for cybercriminals seeking to steal or exploit this information. A data breach could lead to financial and legal liabilities, including regulatory fines and customer trust erosion.

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Third-Party Risks: Our reliance on third-party service providers exposes us to risks associated with their cybersecurity practices. A breach or security failure in a third-party system could impact our operations and data.

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Phishing and Social Engineering: Employees and individuals connected to our organization may be susceptible to phishing attacks or social engineering tactics that compromise security. Human error or manipulation can lead to breaches.

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Regulatory Compliance: We are subject to various data protection and privacy regulations, and non-compliance could result in legal and financial penalties. Adhering to these regulations requires ongoing efforts and resources.

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Business Interruption: A cyberattack or system breach may disrupt our operations, affecting our ability to serve customers, fulfill orders, and maintain revenue, resulting in financial losses.

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Reputation Damage: A publicized cybersecurity incident can significantly damage our brand and reputation, leading to customer churn and reduced market confidence.

The recently adopted SEC cybersecurity disclosure rules for public companies require disclosure regarding cybersecurity risk management (including the corporate board’s role in overseeing cybersecurity risks, management’s role and expertise in assessing and managing cybersecurity risks, and processes for assessing, identifying and managing cybersecurity risks) in annual reports. These new cybersecurity disclosure rules also require the disclosure of material cybersecurity incidents in a Form 8-K, generally within four days of determining an incident is material. We have included respective disclosures in our Annual Report on Form 10-K for fiscal year ended December 31, 2024 filed with the Commission on April 15, 2025.

We may at times fail (or be perceived to have failed) in our efforts to comply with our privacy and data security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely on may fail to comply with such obligations, which could negatively impact our business operations.

Any failure or perceived failure by us or third parties upon whom we rely to comply with obligations, relating to privacy and data security may result in significant consequences including but not limited to governmental investigations and enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar), litigation, additional reporting requirements and/or oversight, bans on processing personal data, and orders to destroy or not use personal information.

Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to loss of customers; interruptions or stoppages in our business operations; inability to process personal information; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.

Critical Accounting Estimates

A critical accounting estimate is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. During the six-months ended June 30, 2025, the Company entered into a securities purchase agreement providing for the issuance of a convertible note and incremental warrants which required a fair value evaluation under ASC 825. This evaluation constituted an additional critical accounting estimate to the Company. See Note 4 Fair Value Measurements and Other Liabilities and Note 5 Borrowings to the accompanying condensed consolidated financial statements for more information. There have been no other material changes to the Company’s critical accounting estimates as compared to the estimates described in the Annual Report on Form 10-K as of December 31, 2024 which we believe are the most critical to our business and understanding of our results of operations and affect the more significant judgments and estimates that we use in preparation of our condensed consolidated financial statements. Other than the fair value evaluation mentioned above, there have been no other material changes to the Company’s critical accounting estimates since the Annual Report on Form 10-K as of December 31, 2024.

Results of Operations

Revenue

Three Months Ending June 30

	Three Months Ended June 30,				Change
	2025		2024		$			%
AG真人官方 Estate Brokerage Services (Residential)	$	19,709,947	$	15,858,414	$	3,851,533			24	%
Franchising Services		31,222		68,808		(37,586	)		-55	%
Coaching Services		122,692		211,024		(88,332	)		-42	%
Property Management		3,083,763		2,757,680		326,083			12	%
AG真人官方 Estate Brokerage Services (Commercial)		188,020		155,494		32,526			21	%
Title Settlement and Insurance		78,574		-		78,574			NM
Total Revenue	$	23,214,218	$	19,051,420	$	4,162,798			22	%

NM: Not Meaningful

AG真人官方 Estate Brokerage Services (Residential)

Residential real estate services sales revenue increased by approximately $3.9 million, or 24%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. The increase was driven primarily by approximately $3.0 million of revenue from the four acquisitions completed in the 3^rd and 4^th quarter of fiscal year 2024 along with incremental additional revenue from the five acquisitions completed in the 1^st and 2^nd quarter of fiscal year 2024.

Franchising Services

Franchising services revenue decreased by approximately $38 thousand, or 55%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. The decrease is attributable to the acquisition of franchises in fiscal year 2024, which no longer contribute to franchising royalties fees. Our remaining franchisees did not see a significant changes in transaction revenues between periods.

Coaching Services

Coaching services revenue decreased by approximately $88 thousand, or 42%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024, primarily due to a strategic shift to allow large teams to onboard without coaching in an effort to increase onboarding at the expense of Coaching.

Property Management

Property management revenue increased by approximately $326 thousand, or 11%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024, primarily due to an increase in the number of properties under management.

Six Months Ending June 30

	Six Months Ended June 30,				Change
	2025		2024		$			%
AG真人官方 Estate Brokerage Services (Residential)	$	33,980,226	$	26,096,163	$	7,884,063			30	%
Franchising Services		70,000		213,189		(143,189	)		-67	%
Coaching Services		217,226		344,017		(126,791	)		-37	%
Property Management		6,060,296		5,302,267		758,029			14	%
AG真人官方 Estate Brokerage Services (Commercial)		245,086		184,683		60,403			33	%
Title Settlement and Insurance		155,778		-		155,778			NM
Total Revenue	$	40,728,612	$	32,140,319	$	8,588,293			27	%

NM: Not Meaningful

AG真人官方 Estate Brokerage Services (Residential)

Residential real estate services sales revenue increased by approximately $7.9 million, or 30%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. The increase was driven primarily by approximately $5.3 million of revenue from the four acquisitions completed in the 3^rd and 4^th quarter of fiscal year 2024 along with incremental additional revenue from the five acquisitions in the 1^st and 2^nd quarter of fiscal year 2024.

Franchising Services

Franchising services revenue decreased by approximately $143 thousand, or 67%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. The decrease is attributable to the acquisitions completed in fiscal year 2024 that were franchisees, which no longer contribute to franchising royalties fees. Our remaining franchisees did not see a significant changes in transaction revenues between the per.

Coaching Services

Coaching services revenue decreased by approximately $126 thousand, or 37%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024, primarily due to a strategic shift to allow large teams to onboard without coaching in an effort to increase onboarding at the expense of Coaching.

Property Management

Property management revenue increased by approximately $758 thousand, or 14%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024, primarily due to an increase in the number of properties under management.

Gross Profit and Gross Margin

Three Months Ending June 30

	Three Months Ended June 30,						Change
	2025			2024			$			%
AG真人官方 Estate Brokerage Services (Residential)	$	1,681,805		$	1,388,398		$	293,407			21	%
Gross Margin		8.5	%		8.8	%		-0.2	%
Franchising Services	$	(82,146	)	$	(54,645	)	$	(27,501	)		50	%
Gross Margin		-263.1	%		-79.4	%		-183.7	%
Coaching Services	$	39,689		$	99,365		$	(59,676	)		-60	%
Gross Margin		32.3	%		47.1	%		-14.7	%
Property Management	$	100,912		$	127,208		$	(26,296	)		-21	%
Gross Margin		3.3	%		4.6	%		-1.3	%
AG真人官方 Estate Brokerage Services (Commercial)	$	33,394		$	25,985		$	7,409			29	%
Gross Margin		17.8	%		16.7	%		1.0	%
Title Settlement and Insurance	$	78,574		$	-		$	78,574			NM
Gross Margin		100.0	%		0.0	%		100.0	%
Total Gross Profit	$	1,852,228		$	1,586,311		$	265,917			17	%
Total Gross Margin		8.0	%		8.3	%		-0.3	%

NM: Not Meaningful

AG真人官方 Estate Brokerage Services (Residential)

Costs related to residential real estate brokerage services increased by approximately $3.6 million, or 25%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. The increase was driven by approximately $2.7 million of cost of revenue from the four acquisitions completed in the 3^rd and 4^th quarter of fiscal year 2024 and the five acquisitions completed in the 1^st and 2^nd quarter of fiscal year 2024. The gross profit increased by approximately $293 thousand, or 21%, for the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024 primarily attributable to the gross profit from acquisitions.

Franchising Services

Costs of revenue for franchising services decreased by approximately $10 thousand, or 8%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024, related to the acquisition of the franchises acquired in the 2024. The gross profit of franchising services has decreased by $27 thousand, or about 50%, for the three-month period ending June 30, 2025 over the comparable prior year period, which is attributable to the reduction in the cost of revenue due to the acquisitions of the franchises in 2024.

Coaching Services

Costs of revenue related to coaching services decreased by approximately $29 thousand, or 26%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. Costs related to coaching services is related to the augmentation of the coaching program to expedite agent onboarding. The gross profit of coaching services has decreased by $60 thousand, or about 60%, for the three-month period ending June 30, 2025 over the comparable prior year period due to a shift in priority to growth in onboarding without a coaching requirement.

Property Management

Costs of revenue related to property management services increased by approximately $353 thousand, or 13%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. The increase in property management costs was primarily related to an increase in properties under management. The gross profit of property management services has declined by $26 thousand, or about 21%, for the three-month period ending June 30, 2025 over the comparable prior year period related to payroll increase in properties under management.

Title Settlement and Insurance

We acquired Nona Title rebranded FPG Title near the end of the third quarter of 2024, increases are related to this acquisition generating revenues, cost of revenues and general and administrative expenses for the first time for the three-months ended June 30, 2025.

Six Months Ending June 30

	Six Months Ended June 30,						Change
	2025			2024			$			%
AG真人官方 Estate Brokerage Services (Residential)	$	3,056,199		$	2,422,126		$	634,073			26	%
Gross Margin		9.0	%		9.3	%		-0.3	%
Franchising Services	$	(155,159	)	$	(40,353	)	$	(114,806	)		285	%
Gross Margin		-221.7	%		-18.9	%		-202.7	%
Coaching Services	$	78,343		$	159,353		$	(81,010	)		-51	%
Gross Margin		36.1	%		46.3	%		-10.3	%
Property Management	$	198,305		$	156,827		$	41,478			26	%
Gross Margin		3.3	%		3.0	%		0.3	%
AG真人官方 Estate Brokerage Services (Commercial)	$	56,430		$	50,355		$	6,075			12	%
Gross Margin		23.0	%		27.3	%		-4.2	%
Title Settlement and Insurance	$	155,778		$	-		$	155,778			NM
Gross Margin		100.0	%		0.0	%		100.0	%
Total Gross Profit	$	3,389,896		$	2,748,308		$	641,588			23	%
Total Gross Margin		8.3	%		8.6	%		-0.2	%

NM: Not Meaningful

AG真人官方 Estate Brokerage Services (Residential)

Costs related to residential real estate brokerage services increased by approximately $7.3 million, or 31%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. The increase was driven by approximately $4.7 million of cost of revenue from the four acquisitions completed in the 3^rd and 4^th of fiscal year 2023 and the five acquisitions completed in the 1^st and 2^nd quarter of fiscal year 2024. The gross profit increased by approximately $634 thousand, or 26%, for the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024 primarily attributable to the gross profit from acquisitions.

Franchising Services

Costs of revenue for franchising services decreased by approximately $28 thousand, or 11%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024, related to the acquisition of franchises acquired in 2024. The gross profit of franchising services has decreased by $115 thousand, or about 285%, for the six-month period ending June 30, 2025 over the comparable prior year period, which is attributable to the reduction in the cost of revenue due to the acquisitions of the franchises in 2024.

Coaching Services

Costs of revenue related to coaching services decreased by approximately $46 thousand, or 25%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. Costs related to coaching services is related to the augmentation of the coaching program. The gross profit of coaching services has decreased by $81 thousand, or about 51%, for the six-month period ending June 30, 2025 over the comparable prior year period due to a shift in priority to growth in onboarding without a coaching requirement.

Property Management

Costs of revenue related to property management services increased by approximately $717 thousand, or 14%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. The increase in property management costs was primarily related to an increase in properties under management. The gross profit of property management services has increased by $41 thousand, or about 26%, for the six-month period ending June 30, 2025 over the comparable prior year period related to increase in properties under management.

Title Settlement and Insurance

Selling, General and Administrative Expense

Three Months Ending June 30

	Three Months Ended March 31,				Change
	2025		2024		$			%
Sales and Marketing	$	606,298	$	212,608	$	393,690			185	%
Payroll and benefits		1,486,726		978,065		508,661			52	%
Rent and other		382,934		254,416		128,518			51	%
Professional fees		647,076		398,954		248,122			62	%
Office		102,237		94,888		7,349			8	%
Technology		160,335		92,305		68,030			74	%
Insurance, training and other		130,957		172,574		(41,617	)		-24	%
Public company costs		102,822		493,410		(390,588	)		-79	%
Amortization and deprecation		187,966		255,544		(67,578	)		-26	%
Total SG&A Expenses	$	3,807,351	$	2,952,764	$	854,587			29	%

NM: Not Meaningful

Selling, general and administrative costs increased by approximately $855 thousand, or 29%, in the three-months ended June 30, 2025 as compared to the three-months ended June 30, 2024. Of this $248 thousand is related to professional service, and $508 thousand is related to payroll and benefits which were added to support the acquisitions, administrative, sales and marketing activities in addition public company cost decreased by $391 thousand related to decreases in acquisitions between years.

Six Months Ending June 30

	Six Months Ended June 30,				Change
	2025		2024		$			%
Sales and Marketing	$	1,169,447	$	445,335	$	724,112			163	%
Payroll and benefits		3,017,518		1,914,557		1,102,961			58	%
Rent and other		764,624		485,187		279,437			58	%
Professional fees		1,650,421		709,519		940,902			133	%
Office		180,683		171,857		8,826			5	%
Technology		277,779		168,264		109,515			65	%
Insurance, training and other		298,786		300,779		(1,993	)		-1	%
Public company costs		320,755		871,505		(550,750	)		-63	%
Amortization and deprecation		418,012		440,343		(22,331	)		-5	%
Total SG&A Expenses	$	8,098,025	$	5,507,346	$	2,590,679			47	%

NM: Not Meaningful

Selling, general and administrative costs increased by approximately $2.6 million, or 47%, in the six-months ended June 30, 2025 as compared to the six-months ended June 30, 2024. Of this $941 thousand is related to professional service, and $1.1 million is related to payroll and benefits which were added to support the acquisitions, administrative, sales and marketing activities.

Stock-based compensation

We incurred stock-based compensation of approximately $507,000 and $2,422,000 in the three and six months ended June 30, 2025, respectively. Year to date primarily due to option and other grants to our CEO pursuant to the terms of his employment agreement ($1.6 million) and consultant shares granted for various advisory and marketing functions ($58 thousand) and other grants to our agents and employees in the form of restricted stock units.

We incurred stock-based compensation of approximately $474 thousand and $3.7 million in the three and six months ended June 30, 2024, respectively. Yeat to date being primarily due to option grants to our CEO pursuant to the terms of his employment agreement ($2.1 million), other employees ($0.9 million), and consultants who provided various services to the company ($0.7 million).

Other Income (Expense), Net

Other income (expense), net for the three-months ended June 30, 2025, increased approximately $81 million compared to other income (expense), net, for the three-months ended June 30, 2024. The increase in expense in 2025 was primarily due to the gain on settlement of the Incremental Warrants for $82.3 million, gain on extinguishment of debt for $4.1 million, offset by a loss of $5.3 million on the change in fair value of convertible note and warrants.

Other expense, net for the six-months ended June 30, 2025, increased approximately $9.6 million compared to other expense, net, for the six-months ended June 30, 2024. The increase in expense in 2025 was primarily due to the loss on issuance of senior secured convertible note for $128.8 million, offset by gain on extinguishment of incremental warrants $82.3 million, gain of $31.8 million on the change in fair value of convertible note and warrants and a $4 million gain on extinguishment of debt.

Liquidity and Capital Resources

On June 30, 2025, the Company had a cash balance of $7.1 million and working capital of $4.4 million.

On February 4, 2025, the Company and an institutional investor entered into the SPA, pursuant to which the Company issued to the Investor: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (“Incremental Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for the Initial Note and Incremental Warrants was $4,963,750.

The $4,963,750 in gross proceeds of which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of $3,408,585. Remaining funds from the offering was used by the Company to pay-off certain indebtedness of the Company, pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), acquisitions and general corporate purposes. Of the proceeds from the offering, $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor. See Note 5 – Borrowings for further discussion to the accompanying condensed consolidated financial statements for further disclosure.

In addition to the debt pay downs during the six months ended June 30, 2025, the Company eliminated all warrants tied to the investor senior secured promissory notes outstanding as of December 31,2024. Two of the three warrants were exercised on a cashless basis, with the third warrant being bought back by the Company in the amount of $379,083, fully eliminating these unfavorable ratchet warrants.

The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements. The Company will be required to raise additional capital to service its promissory notes, to repay the principal balance of each of the notes, 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 acquisition, which will help achieve future profitability, and 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.

Summary of Cash Flows

	Six Months Ended June 30,
	2025			2024
Net Cash Used in Operating Activities	$	(4,883,024	)	$	(1,341,369	)
Net Cash Provided by Investing Activities	$	-		$	71,718
Net Cash Provided by Financing Activities	$	8,363,477		$	2,144,066

Cash Flows from Operating Activities

During the six-months ended June 30, 2025, operating activities consumed $4.8 million of our cash on hand, which was primarily attributable to the net loss of $4.0 million, excluding stock-based compensation, gains and losses on issuance of senior secured convertible notes and warrants, fair market value adjustments, amortization, depreciation and other changes, changes in operating assets and liabilities consumed a further $859 thousand, mostly due to an increase in accounts receivable and an decrease in operating lease liabilities.

During the six months ended June 30, 2024, operating activities consumed $1.3 million of our cash on hand, which was primarily attributable to the net loss of $2.0 million, excluding stock-based compensation, amortization and depreciation, non-cash interest expense and amortization of debt discounts, and provision for credit losses, partially offset by changes in working capital of $0.7 million, mostly due to an increase in accounts payable, security deposit payables, and an increase in contract liabilities, partially offset by an increase in accounts receivable and payments on lease liabilities.

Cash Flows from Investing Activities

During the six-months ended June 30, 2025 there were no activities that consumed cash for the quarter.

During the six months ended June 30, 2024, we purchased five acquisitions with capital stock and two of the five with additional cash payments totaling $60 thousand. Each of the five acquisitions had an aggregate amount of $132 thousand of cash.

Cash Flows from Financing Activities

During the six-months ended June 30, 2025, we received net cash provided by financing activities of $8.4 million, which included net proceeds from our S-3 of $6.7 million and from our debt issuance in February 2025 of $3.4 million, offset by $1.7 million in payments to notes payable, post-acquisition consideration, and advances on future receipts.

During the six months ended June 30, 2024, we received net cash provided by financing activities of $2.1 million, which included the proceeds of our debt issuance in February and April 2024 of $2.2 million and the receipt of the advances on future receipts of $0.5 million, offset by deferred debt issuance costs of $0.3 million, payments on notes payable, and payments to advances on future receipts and post-acquisition consideration totaling $0.3 million.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of June 30, 2025, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Interim Chief Financial Officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures are ineffective, as we are a newly publicly traded company with limited resources in our finance department, and we are in the process of establishing our procedures around our disclosure controls.

Changes in Internal Control over Financial Reporting

As reported in our Annual Report on Form 10-K for 2024 fiscal year, material weaknesses were identified due to lack of segregation of duties, control environment and size and nature of cybersecurity staffing. We have therefore concluded that our internal controls over financial reporting are not effective at the reasonable assurance level. A material weakness is a deficiency, or combination of deficiencies, in our internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis.

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties. Therefore, it is difficult to effectively segregate accounting duties which comprises a material weakness in internal controls. To the extent reasonably possible given our limited resources, we intend to take measures to cure the weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate controls over our Exchange Act reporting disclosures. As such, we consider these material weaknesses to not be remediated as of June 30, 2025.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As previously disclosed, on February 13, 2023, Mr. Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000. Discovery is proceeding, mediation is scheduled for August 25, 2025. The Company denies the merits of the claims and intends on vigorously defending the litigation.

As previously disclosed, on March 5, 2025, Joshua Epstein filed an action in Osceola County, Florida Circuit Court alleging claims for Breach of Contract, Promissory Estoppel, Conversion, Unjust Enrichment, Breach of Good Faith and Fair Dealings, Fraud in the Inducement, and to recover alleged unpaid compensation from the defendant, La Rosa Holdings Corp. The Company strongly opposes and denies these claims. Mediation is scheduled for September 5, 2025. The Company denies the merits of the claims and intend on vigorously defending the litigation.

On June 5, 2025, an employee, who served as our Senior Human Resources and Payroll Specialist from July 10, 2024 to August 19, 2024, filed a civil lawsuit against the Company in the Circuit Court of Osceola County, Florida. The employee is seeking a jury trial claiming $50,000 in damages and that the Company terminated her employment in violation of SS 448.102(3). On July 9, 2025, the Company responded to the complaint with their Answer and Affirmative Defenses, effectively denying all of the plaintiff’s claims. The case remains pending.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on April 15, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) In addition to the issuances of unregistered securities described in the Current Reports on Form 8-K filed by the Company with the SEC, in the second quarter of 2025 the Company issued the following securities which were not registered under the Securities Act.

In the quarter ended June 30, 2025, the Company issued 187 restricted stock units to its agents in line with the grants earned through the agent incentive plan and per their agreements with the Company.

In the quarter ended June 30, 2025, the Company issued 1,220 unregistered shares of common stock to its agents pursuant to a conversion of restricted stock units held by them into shares of unregistered shares of common stock of the Company in accordance with the terms of respective grant agreements.

In the quarter ended June 30, 2025, the Company issued two contractors stock options to purchase in aggregate 1,250 shares of common stock with an average exercise price of $13.00 per share under 2022 Plan.

Unless otherwise noted, the securities above were issued pursuant to the registration requirements of the Securities Act provided by Section 4(a)(2) and/or Rule 506 of Regulation D promulgated under the Securities Act, in light of the fact that none of the issuances involved a public offering of securities and no solicitation or advertisements for such securities were made by any party.

(b) Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

(a) Exhibits. The following documents are filed as part of this report:

Exhibit No.:		Description:
2.1		Reorganization Agreement And Plan of Share Exchange dated July 22, 2021 by and among La Rosa Holdings Corp., La Rosa Coaching, LLC, La Rosa CRE, LLC, La Rosa Franchising, LLC, La Rosa Property Management, LLC, and La Rosa AG真人官方ty, LLC. (incorporated by reference to Exhibit 10.3 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of June 14, 2022).

3.1		Amended and Restated Articles of Incorporation of La Rosa Holdings Corp. (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of June 14, 2022).

3.2		Certificate of Amendment to Articles of Incorporation for 3.5 for 1 reverse stock split (incorporated by reference to Exhibit 3.4 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of April 19, 2022).

3.3		Certificate of Correction of Certificate of Amendment to Articles of Incorporation for 10 for 1 reverse stock split (incorporated by reference to Exhibit 3.5 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of April 19, 2022).

3.4		Certificate Of Designations, Preferences And Rights Of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.6 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of April 26, 2023).

3.5		Certificate of Amendment to Articles of Incorporation for 2 for 1 forward stock split (incorporated by reference to Exhibit 3.7 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of April 26, 2023).

3.6		Certificate of Amendment to Articles of Incorporation on increase of authorized stock (incorporated by reference to Exhibit 3.8 of the Company’s Registration Statement on Form S-1 (File No. 284962) filed with the SEC as of June 27, 2025).

3.7		Certificate of Designation of Series B Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC as of June 20, 2025)

3.8		Certificate of Amendment to Amended and Restated Articles of Incorporation of La Rosa Holdings Corp., filed on July 2, 2025 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC as of July 8, 2025).

3.9		Certificate of Correction of the Company filed on July 14, 2025 to the Certificate of Designation of Series B Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 16, 2025).

3.10		Bylaws of La Rosa Holdings Corp. (incorporated by reference to Exhibit 3.3 of the Company’s Registration Statement on Form S-1 (File No. 333-264372) filed with the SEC as of June 14, 2022).

4.1		Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

4.2		Form of Incremental Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

4.3		Form of the Waiver, dated April 23, 2025, to the Senior Secured Convertible Note, issued on February 4, 2025(incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC as of April 25, 2025)

4.4		Form of Amendment No. 1, dated June 26, 2025, to the Senior Secured Convertible Note, dated February 4, 2025. (incorporated by reference to Exhibit 4.18 of the Company’s Registration Statement on Form S-1 (File No. 284962) filed with the SEC as of June 27, 2025).

4.5		Form of Amendment No. 1, dated June 26, 2025, to the Senior Secured Convertible Note, dated February 4, 2025 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC as of July 2, 2025).

10.1		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.2		Form of Security and Pledge Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.3		Form of Intellectual Property Security Agreement (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.4		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.5		Form of Voting Agreement (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.6		Form of Guaranty (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.7		Form of Lock-Up Agreement of a certain investor (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.8#		Form of Lock-Up Agreement of the Chief Executive Officer of the Company (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.9#		Amendment No. 4, dated February 3, 2025, to the Amended and Restated Employment Agreement dated April 29, 2022, as amended (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed with the SEC as of February 5, 2025)

10.10		Third Amended and Restated La Rosa Holdings Corp. 2022 Agent Incentive Plan. (incorporated by reference to Exhibit 10.158 of the Company’s Annual Report on Form 10-K filed with the SEC as of April 15, 2025)

10.11		Sales Agreement, dated November 22, 2024, by and between the Company and A.G.P./Alliance Global Partners (incorporated by reference to Exhibit 1.2 of the Company’s Registration Statement on Form S-3 filed with the SEC as of November 22, 2024

10.12		Form of LR Agent Advance Commission Purchase Agreement (incorporated by reference to Exhibit 10.15 of the Company’s Quarterly Report on Form 10-Q filed with the SEC as of May 29, 2025)

10.13		Form of the Waiver Agreement, dated May 23, 2025 (incorporated by reference to Exhibit 10.16 of the Company’s Quarterly Report on Form 10-Q filed with the SEC as of May 29, 2025)

10.14		Form of Amendment and Exchange Agreement between the Company and the Investor, dated June 18, 2025 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC as of June 20, 2025)

10.15		Form of Voting Agreement between the Company and Joseph La Rosa, dated June 18, 2025 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC as of June 20, 2025)

10.16		Second Amended and Restated La Rosa Holdings Corp. 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.194 of the Registration Statement on Form S-1 (No. 333-289503) filed with the SEC on August 11, 2025)

10.17		Form of Amendment No. 1, dated July 14, 2025, to the Amendment and Exchange Agreement, dated June 18, 2025 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 16, 2025).

10.18		Form of Exchange Agreement between the Company and the holder, signed on July 14, 2025 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2025).

10.19		Form of Exchange Agreement between the Company and Joseph La Rosa, signed on July 17, 2025 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2025).

10.20		Form of Equity Purchase Facility Agreement, dated as of August 4, 2025 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2025).

10.21		Form of Registration Rights Agreement, dated as of August 4, 2025 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2025)

31.1*		Certification of Principal Executive Officer pursuant to Securities Exchange Act Rules 13a- 14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a- 14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Schema Document

101.CAL*		Inline XBRL Calculation Linkbase Document

101.DEF*		Inline XBRL Definition Linkbase Document

101.LAB*		Inline XBRL Label Linkbase Document

101.PRE*		Inline XBRL Presentation Linkbase Document

104*		Cover Page Interactive Data File (embedded within the Inline XBRL document filed as Exhibit 101)

Filed herewith

Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

Management contracts or compensatory plans, contracts or arrangements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LA ROSA HOLDINGS CORP.

Date: August 18, 2025	By:	/s/ Joseph La Rosa
	Name:	Joseph La Rosa
	Title:	Founder, Chief Executive Officer, and Director
		(Principal Executive Officer)

Date: August 18, 2025	By:	/s/ Joseph La Rosa
	Name:	Joseph La Rosa
	Title:	Interim Chief Financial Officer
		(Principal Financial Officer) (Principal Accounting Officer)

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Source:

FAQ

What were La Rosa Holdings Corp.'s (LRHC) largest revenue segments in Q2 2025?

The largest segments were AG真人官方 estate brokerage (residential) with $18,028,142 for the quarter and Property management with $3,083,763 for the quarter.

Did LRHC report a profit or loss for the quarter and six months in 2025?

LRHC reported a net income of $78,463,104 for the three-months ended June 30, 2025, and a net loss of $17,235,781 for the six-months ended June 30, 2025.

What significant financing transactions did LRHC disclose in this 10-Q?

Key financings include a $5,500,000 Senior Secured Convertible Note, issuance and settlement of Incremental Warrants (issuance fair value $100.8M; recorded gain $82.299M), and issuance of Series B Preferred Stock recorded as permanent equity.

How did LRHC change its capital structure during the period?

LRHC effected an 80-for-1 reverse stock split reducing common shares outstanding to 729,113, issued Series B Preferred Stock, and completed convertible note/warrant exchanges impacting equity and potential dilution.

What is LRHC's goodwill balance and what does it reflect?

Goodwill is reported at $8,012,331, reflecting purchase price allocations from acquisitions disclosed in the filing.

Does LRHC report any working capital or liquidity measures?

The filing states the company has positive working capital of $4.4 million and referenced gross proceeds of $4,963,750 from a financing transaction.

AG真人官方

[10-Q] La Rosa Holding Corp. Quarterly Earnings Report

Insights

FAQ

What were La Rosa Holdings Corp.'s (LRHC) largest revenue segments in Q2 2025?

Did LRHC report a profit or loss for the quarter and six months in 2025?

What significant financing transactions did LRHC disclose in this 10-Q?

How did LRHC change its capital structure during the period?

What is LRHC's goodwill balance and what does it reflect?

Does LRHC report any working capital or liquidity measures?

NASDAQ:LRHC

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LRHC Latest News

LRHC Latest SEC Filings

LRHC Stock Data

AG真人官方

Trending News

[10-Q] La Rosa Holding Corp. Quarterly Earnings Report

Insights

Financial Analyst positive

M&A / Capital Markets Specialist positive

FAQ

What were La Rosa Holdings Corp.'s (LRHC) largest revenue segments in Q2 2025?

Did LRHC report a profit or loss for the quarter and six months in 2025?

What significant financing transactions did LRHC disclose in this 10-Q?

How did LRHC change its capital structure during the period?

What is LRHC's goodwill balance and what does it reflect?

Does LRHC report any working capital or liquidity measures?

NASDAQ:LRHC

LRHC Rankings

LRHC Latest News

LRHC Latest SEC Filings

LRHC Stock Data