La Rosa Holdings Corp 10-Q for FY2026 Q2
La Rosa Holdings Corp. (SRTM)
About this 10-Q
La Rosa Holdings Corp filed this 10-Q on August 21, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $15.05M
- down 25.6% from $20.23M a year earlier
- Net loss
- $2.18M
- compared with net income of $78.42M a year earlier
- Diluted EPS
- -$1.66
- compared with $1,525.16 a year earlier
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from _____to_____
Commission File Number:
LA ROSA HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
| ||
(State or other jurisdiction of |
| (I.R.S. Employer |
| ||
(Address of principal executive offices) |
| (Zip Code) |
(
(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: |
|
| The |
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 ☐
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 ☐
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 ☐ |
|
| 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
As of August 20, 2026, the registrant had
PART I. |
||
|
|
|
ITEM 1. |
||
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2026 (UNAUDITED) AND DECEMBER 31, 2025 |
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
|
|
|
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
|
|
|
ITEM 3. |
||
|
|
|
ITEM 4. |
||
|
|
|
PART II. |
||
|
|
|
ITEM 1. |
||
|
|
|
ITEM 1A. |
||
|
|
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
|
|
|
|
ITEM 3. |
||
|
|
|
ITEM 4. |
||
|
|
|
ITEM 5. |
||
|
|
|
ITEM 6. |
||
|
|
|
|
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
La Rosa Holdings Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
| | June 30, 2026 | | | December 31, 2025 | | ||
| | (unaudited) | | | | | | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | | | $ | | ||
Restricted cash | | | | | | | ||
Digital assets, restricted | | | | | | | ||
Accounts receivable, net of allowance for credit losses of $ and $, respectively | | | | | | | ||
Notes receivable | | | | | | | ||
Other current assets | | | | | | | ||
Total current assets | | | | | | | ||
| | | | | | | | |
Noncurrent assets: | | | | | | | | |
Restricted cash, net of current | | | | | | | ||
Property and equipment, net | | | | | | | ||
Right-of-use asset, net | | | | | | | ||
Intangible assets, net | | | | | | | ||
Goodwill | | | | | | | ||
Other long-term assets | | | | | | | ||
Total noncurrent assets | | | | | | | ||
Total assets | | $ | | | $ | | ||
Liabilities, Series X Preferred Stock Subject to Redemption and Stockholders’ Deficit | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | | | $ | | ||
Accrued expenses | | | | | | | ||
Contract liabilities | | | | | | | ||
Security deposits and escrow payable | | | | | | | ||
Line of credit | | | | | | | ||
Accrued acquisition cash consideration | | | | | | | ||
Notes payable, current | | | | | | | ||
Lease liability, current | | | | | | | ||
Total current liabilities | | | | | | | ||
| | | | | | | | |
Noncurrent liabilities: | | | | | | | | |
Note payable, net of current | | | | | | | ||
Security deposits and escrow payable | | | | | | | ||
Lease liability, noncurrent | | | | | | | ||
Total noncurrent liabilities | | | | | | | ||
Total liabilities | | | | | | | ||
| | | | | | | | |
Commitments and contingencies (Note 6) | | | | | | | | |
| | | | | | | | |
Series X Preferred Stock Subject to Redemption: | | | | | | | | |
Preferred stock - $ par value; shares authorized; and Series X shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | | | | | | | ||
Stockholders’ Deficit: | | | | | | | | |
Preferred stock - $ par value; shares authorized; and Series B Convertible Preferred Stock issued and outstanding at June 30, 2026 and December 31, 2025 | | | | | | | ||
Preferred stock - $ par value; shares authorized; and Series C Convertible Preferred Stock issued and outstanding at June 30, 2026 and December 31, 2025, respectively | | | | | | | ||
Preferred stock - $ par value; shares authorized; and Series D Convertible Preferred Stock issued and outstanding at June 30, 2026 and December 31, 2025, respectively | | | | | | | ||
Common stock - $ par value; shares authorized; and issued and outstanding at June 30, 2026 and December 31, 2025, respectively | | | | | | | ||
Additional paid-in capital | | | | | | | ||
Accumulated deficit | | | ( | ) | | | ( | ) |
Total stockholders' deficit – La Rosa Holdings Corp. stockholders | | | ( | ) | | | ( | ) |
Noncontrolling interest in subsidiaries | | | | | | | ||
Total stockholders' deficit | | | ( | ) | | | ( | ) |
Total liabilities, Series X Subject to Redemption and stockholders deficit | | $ | | | $ | | ||
See notes to the condensed 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, |
| ||||||||
| 2026 |
| 2025 |
| 2026 |
| 2025 |
| ||||
Revenue | $ |
| $ |
| $ |
| $ |
| ||||
|
|
| |
|
| |
|
| |
|
| |
Cost of revenue |
|
|
|
|
|
|
|
| ||||
|
|
| |
|
| |
|
| |
|
| |
Gross profit |
|
|
|
|
|
|
|
| ||||
|
|
| |
|
| |
|
| |
|
| |
Operating expenses: |
|
| |
|
| |
|
| |
|
| |
Sales and marketing |
|
|
|
|
|
|
|
| ||||
General and administrative |
|
|
|
|
|
|
|
| ||||
Stock-based compensation — general and administrative |
|
|
|
|
|
|
|
| ||||
Total operating expenses |
|
|
|
|
|
|
|
| ||||
|
|
| |
|
| |
|
| |
|
| |
Loss from operations |
| ( | ) |
| ( | ) |
| ( | ) |
| ( | ) |
Other income (expense) |
|
| |
|
| |
|
| |
|
| |
Interest expense, net |
| ( | ) |
| ( | ) |
| ( | ) |
| ( | ) |
Gain on extinguishment of debt |
|
|
|
|
|
|
|
| ||||
Amortization of debt discount |
|
|
|
|
|
|
| ( | ) | |||
Change in fair value of derivative liability |
|
|
|
|
|
|
|
| ||||
Gain (Loss) on issuance of senior secured convertible note |
|
|
|
|
| ( | ) |
| ( | ) | ||
Change in fair value of convertible note and warrants |
| ( | ) |
| ( | ) |
| ( | ) |
|
| |
Gain on settlement of incremental warrants |
|
|
|
|
|
|
|
| ||||
Fair value of settlement of contract based equity issuances |
| ( | ) |
|
|
| ( | ) |
|
| ||
Loss on disposition of non-controlling interest in subsidiary |
|
|
|
|
| ( | ) |
|
| |||
Other income (expense), net |
|
|
|
|
|
|
|
| ||||
Loss (income) from operations before provision for income taxes |
| ( | ) |
|
|
| ( | ) |
| ( | ) | |
Provision for income taxes |
|
|
|
|
|
|
|
| ||||
Net (loss) income |
| ( | ) |
|
|
| ( | ) |
| ( | ) | |
Less: Net income attributable to noncontrolling interests in subsidiaries |
|
|
|
|
|
|
|
| ||||
Net (loss) income after noncontrolling interest in subsidiaries |
| ( | ) |
|
|
| ( | ) |
| ( | ) | |
Less: Deemed dividend |
|
|
|
|
|
|
|
| ||||
Net (loss) income attributable to common stockholders | $ | ( | ) | $ |
| $ | ( | ) | $ | ( | ) | |
|
|
| |
|
| |
|
| |
|
| |
(Loss) Income per share of common stock attributable to common stockholders |
|
| |
|
| |
|
| |
|
| |
Basic | $ | ( | ) | $ |
| $ | ( | ) | $ | ( | ) | |
Diluted | $ | ( | ) | $ |
| $ | ( | ) | $ | ( | ) | |
|
|
| |
|
| |
|
| |
|
| |
Weighted average shares used in computing net loss per share of common stock attributable to common stockholders |
|
| |
|
| |
|
| |
|
| |
Basic |
|
|
|
|
|
|
|
| ||||
Diluted |
|
|
|
|
|
|
|
| ||||
See notes to the condensed consolidated financial statements.
La Rosa Holdings Corp. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(unaudited)
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | Additional |
|
|
| | Total |
| Noncontrolling | Total |
| ||||
|
Preferred Stock Series X
|
|
Preferred Stock Series B
|
| Common Stock |
| Paid-In |
| Accumulated |
| Stockholders' |
| Interest In | Equity |
| |||||||||||||||||
Three Months Ended June 30, 2025 | Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Capital |
| Deficit |
| Equity (Deficit) |
| Subsidiaries | (Deficit) |
| |||||||||||
Balance as of March 31, 2025 |
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
$
|
|
$
| ( | ) |
$
| ( | ) |
$
|
$
| ( | ) | ||||||||
Net loss |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Proceeds from new investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Issuance of Series B Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Issuance of common stock for stock-based compensation equity awards, net of shares withheld for taxes |
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ( | ) |
|
| ( | ) | ||||||||
Balance as of June 30, 2025 |
|
|
$
|
|
|
|
|
|
|
|
$
|
|
$
|
|
$
| ( | ) |
$
|
|
$
|
$
|
| ||||||||||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | Additional |
|
| | Total |
| Noncontrolling | Total |
| ||||
| Preferred Stock Series X |
| Preferred Stock Series B |
| Common Stock |
| Paid-In | Accumulated |
| Stockholders' |
| Interest In | Equity |
| |||||||||||||||||
Six Months Ended June 30, 2025 | Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Capital | Deficit |
| Equity (Deficit) |
| Subsidiaries | (Deficit) |
| |||||||||||
Balance as of December 31, 2024 |
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
$
|
$
| ( | ) |
$
|
|
$
|
$
|
| ||||||||||
Net loss |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
| ( | ) |
| ( | ) |
|
| ( | ) | |||||
Issuance of common stock for consulting work |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Equity awards issued with debt issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Proceeds from new investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Issuance of Series B Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Issuance of common stock for stock-based compensation equity awards, net of shares withheld for taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Balance as of June 30, 2025 |
|
|
$
|
|
|
|
|
|
|
|
$
|
|
$
|
$
| ( | ) |
$
|
|
$
|
$
|
| ||||||||||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | Additional |
|
| | Total |
| Noncontrolling |
| Total |
| ||||
| Preferred Stock Series B |
| Preferred Stock Series C |
| Preferred Stock Series D |
| Common Stock |
| Paid-In | Accumulated |
| Stockholders' |
| Interest In |
| Deficit |
| |||||||||||||||||||||
Three Months Ended June 30, 2026 | Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Capital | Deficit |
| Deficit |
| Subsidiaries |
|
|
| | ||||||||||||
Balance as of March 31, 2026 |
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
| ( | ) |
$
| ( | ) |
$
|
|
$
| ( | ) | ||||||||||
Net loss |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
| ( | ) |
| ( | ) |
|
|
| ( | ) | ||||||
Stock-based compensation |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Proceeds from new investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Issuance of Series D Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Conversion of Series B Preferred Stock |
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Purchase of non-controlling interest |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
| ( | ) | |||||||
Balance as of June 30, 2026 |
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
| ( | ) |
$
| ( | ) |
$
|
|
$
| ( | ) | ||||||||||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| | Additional |
|
| | Total |
| Noncontrolling |
| Total |
| ||||
| Preferred Stock Series B |
| Preferred Stock Series C |
| Preferred Stock Series D |
| Common Stock |
| Paid-In | Accumulated |
| Stockholders' |
| Interest In |
| Deficit |
| |||||||||||||||||||||
Six Months Ended June 30, 2026 | Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Shares |
| Par Value |
| Capital | Deficit |
| Deficit |
| Subsidiaries |
|
|
| | ||||||||||||
Balance as of December 31, 2025 |
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
$
|
$
| ( | ) |
$
| ( | ) |
$
|
|
$
| ( | ) | ||||||||||
Net loss |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
| ( | ) |
| ( | ) |
|
|
| ( | ) | ||||||
Issuance of common stock for consulting work |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Conversion of liabilities into common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Stock-based compensation |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Proceeds from new investors and S-3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Issuance of Series C Preferred Stock |
| - |
|
| - |
|
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
| |||||||
Issuance of Series D Preferred Stock |
| - |
|
| - |
|
| - |
|
| - |
|
|
|
|
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
| |||||||
Conversion of Series B Preferred Stock |
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Disposition of non-controlling interest in subsidiary |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
| ( | ) | |||||||
Purchase of non-controlling interest |
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
| ( | ) | |||||||
Balance as of June 30, 2026 |
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
$
|
$
| ( | ) |
$
| ( | ) |
$
|
|
$
| ( | ) | ||||||||||
See notes to the condensed consolidated financial statements.
La Rosa Holdings Corp. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
| For the Six Months Ended June 30, |
| ||||
| 2026 |
| 2025 |
| ||
Cash Flows from Operating Activities: |
|
| |
|
| |
Net loss | $ | ( | ) | $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
| |
|
| |
Stock-based compensation |
|
|
|
| ||
Loss on issuance of senior secured convertible note and warrants |
|
|
|
| ||
Change on fair value of convertible note and warrants |
|
|
| ( | ) | |
Gain on settlement of incremental warrants |
|
|
| ( | ) | |
Amortization and depreciation |
|
|
|
| ||
Amortization of right-of-use assets |
|
|
|
| ||
Loss on disposition of non-controlling interest in subsidiary |
|
|
|
| ||
Change in fair value of derivatives |
|
|
| ( | ) | |
Amortization of debt discount and financing fees |
|
|
|
| ||
Gain on extinguishment of debt |
|
|
| ( | ) | |
Non-cash interest expense |
|
|
| ( | ) | |
Allowance for credit losses |
|
|
|
| ||
Changes in Operating Assets and Liabilities: |
|
| |
|
| |
Accounts receivable |
| ( | ) |
| ( | ) |
Note receivable |
|
|
|
| ||
Other assets |
| ( | ) |
| ( | ) |
Accounts payable |
|
|
|
| ||
Accrued expenses |
|
|
| ( | ) | |
Contract liabilities |
|
|
|
| ||
Security deposits and escrow payable |
|
|
| ( | ) | |
Operating lease liabilities |
| ( | ) |
| ( | ) |
Net Cash Used in Operating Activities |
| ( | ) |
| ( | ) |
Cash Flows from Investing Activities: |
|
| |
|
| |
Purchase of digital assets |
| ( | ) |
|
| |
Proceeds from sell of digital assets |
|
|
|
| ||
Cash sold with disposition |
| ( | ) |
|
| |
Net Cash Used in Investing Activities |
| ( | ) |
|
| |
Cash Flows from Financing Activities: |
|
| |
|
| |
Borrowings on bank line of credit |
|
|
|
| ||
Payments on bank line of credit |
|
|
| ( | ) | |
Proceeds from notes payable |
|
|
|
| ||
Payments of deferred debt issuance costs |
|
|
| ( | ) | |
Payments on notes payable |
| ( | ) |
| ( | ) |
Payments on advances of future receipts |
|
|
| ( | ) | |
Proceeds from issuance of preferred stock series C |
|
|
|
| ||
Proceeds from issuance of preferred stock series D |
|
|
|
| ||
Payments on post-acquisition consideration |
| ( | ) |
| ( | ) |
Distributions to noncontrolling interest |
| ( | ) |
|
| |
Repurchase of derivative instruments issued |
|
|
| ( | ) | |
Proceeds from issuance of common stock |
|
|
|
| ||
Redemption of Series X Preferred Stock |
| ( | ) |
|
| |
Net Cash Provided by Financing Activities |
|
|
|
| ||
|
|
| |
|
| |
Net (Decrease) Increase in Cash, Cash equivalents and Restricted Cash |
| ( | ) |
|
| |
Cash, Cash equivalents and Restricted Cash at Beginning of Period |
|
|
|
| ||
Cash, Cash equivalents and Restricted Cash at End of Period | $ |
| $ |
| ||
|
|
| |
|
| |
Supplemental Disclosures of Cash Flow Information: |
|
| |
|
| |
Cash Paid During the Period for: |
|
| |
|
| |
Interest | $ |
| $ |
| ||
|
|
| |
|
| |
Non-Cash Activities: |
|
| |
|
| |
Issuance of shares of common stock for services rendered | $ |
| $ | — |
| |
Issuance of shares of common stock upon conversion of liabilities | $ |
| $ | — |
| |
Pro-rata expense recognition for restricted stock units | $ |
| $ | — |
| |
Purchase of remaining portion of non-controlling interest | $ |
| $ | — |
| |
Sell of controlling interest to minority interest | $ |
| $ | — |
| |
Conversion of shares of series B preferred stock into shares of common stock | $ |
| $ | — |
| |
Issuance of Series B in exchange of incremental warrants | $ | — |
| $ |
| |
Issuance of new convertible note | $ | — |
| $ |
| |
Issuance of shares of common stock as part of the settlement of notes payable and warrants | $ | — |
| $ |
| |
Issuance of shares of common stock for services rendered | $ | — |
| $ |
| |
Office leases acquired under operating lease obligations | $ |
| $ |
| ||
|
|
| |
|
| |
Reconciliation of Cash, Cash equivalents and Restricted Cash |
|
| |
|
| |
Cash and Cash equivalents | $ |
| $ |
| ||
Restricted Cash |
|
|
|
| ||
Cash, Cash equivalents and Restricted Cash | $ |
| $ |
| ||
See notes to the condensed consolidated financial statements.
5
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”) and its subsidiaries 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.
Results of the six-month period ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026. 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, 2025, included in the Company’s Annual Report on Form 10-K. The condensed consolidated balance sheet as of December 31, 2025 was derived from the Company’s audited financial statements referred to above.
Liquidity – Going Concern and Management's Plans
On June 30, 2026, the Company had a cash balance of $
On November 12, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a certain institutional investor (the “Investor”), pursuant to which the Company agreed to issue and sell, and the Investor agreed to purchase, in multiple closings, a new series of senior secured convertible notes of the Company in an aggregate original principal amount of up to $
Subject to certain conditions described in the Purchase Agreement, the Company has the option to request that the Investor purchase additional Notes (the “Company’s Option Closing”), and the Investor has the option to cause the Company to sell additional Notes (the “Investor’s Option Closing” and together with the Company’s Option Closing, (the “Additional Closings”) and together with the Initial Closing, each a “Closing”), provided that the aggregate original principal amount of any Notes issued in each Additional Closing shall not exceed $
In addition, the Company has financing arrangements through its equity line of credit which allows the Company to sell shares of which
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.
6
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Nasdaq Notice Regarding Filing Deficiency
On April 16, 2026, the Company received a notice (the “10-K Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company had 60 calendar days, or until June 15, 2026, to submit a plan to regain compliance, and if the Staff accepts such plan, it may grant an exception of up to 180 calendar days from the Initial Delinquent Filing’s due date, or until October 12, 2026, to regain compliance.
On May 21, 2026, the Company also received a notice (the “10-Q Notice”, and together with the 10-K Notice, the “Notices”) from the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remained delinquent in filing its Initial Delinquent Filing. The 10-Q Notice further stated that, in accordance with Nasdaq rules and as previously communicated in the 10-K Notice, the Company had until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, any exception granted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026, to regain compliance.
On June 4, 2026, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 with the SEC. On June 10, 2026, the Company received a letter from the Staff indicating that, based on the June 4, 2026 filing of the Form 10-K, the Staff had determined that the Company complies with Nasdaq Listing Rule 5250(c)(1) with regard to the Form 10-K filing. On July 31, 2026, the Company filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 with the SEC. On August 4, 2026, the Company received a letter from the Staff indicating that based on the July 31, 2026 filing of the Quarterly Report on Form 10-Q, the Staff has determined that the Company complies with Nasdaq Listing Rule 5250(c)(1) and this matter is now closed.
Nasdaq Notice Regarding Stockholders’ Equity
On June 10, 2026, the Company received a letter from the Staff indicating that, because the Company’s stockholders’ equity as reported in its Form 10-K for the fiscal year ended December 31, 2025, was $(
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 condensed 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 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 $
The activity for the allowance for credit losses during the six months ended June 30, 2026 and 2025 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, 2026 Allowance for Credit Losses |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
Six months ended June 30, 2025 Allowance for Credit Losses |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
7
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Digital Assets
The Company's digital assets consist primarily of USD Coin ("USDC") and Frax USD ("FRAX"), which are stablecoin-denominated digital assets held in a custodial wallet maintained with BitGo. Management evaluated these digital assets under ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets ("ASC 350-60"), and concluded that the Company's USDC and FRAX holdings are outside the scope of ASC 350-60 as the assets provide holders with enforceable rights to, or claims on, underlying assets and therefore do not meet all of the scope criteria required for application of that guidance. Accordingly, these assets are accounted for as indefinite-lived intangible assets under ASC 350-30, Intangibles - Other than Goodwill ("ASC 350-30").
Digital assets are initially recorded at cost, including directly attributable transaction fees. Subsequent to acquisition, the assets are carried at historical cost less any impairment losses. As indefinite-lived intangible assets, the Company's digital assets are not amortized and are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. In accordance with ASC 350-30, increases in the fair value of the digital assets above their carrying value are not recognized until realized through sale or disposition.
The Company's digital assets are held pursuant to the terms of its November 2025 Securities Purchase Agreement and related financing arrangements. The assets are maintained in a restricted custodial account and cannot be freely withdrawn, transferred, or otherwise utilized without compliance with the contractual provisions of those agreements. In addition, portions of the digital assets are subject to the Token Rights Agreement entered into with certain investors.
The Digital Assets are classified on the condensed consolidated balance sheets based on management’s intent and the expected period of use or sale.
Token Rights
In connection with the Company's financing arrangements, the Company entered into a Token Rights Agreement ("TRA") that provides the investor the right, at its election and subject to the terms of the agreement, to receive specified quantities of digital assets acquired using designated financing proceeds.
The Company evaluated the TRA in accordance with ASC 815, Derivatives and Hedging ("ASC 815"), and concluded that the agreement meets the definition of a derivative instrument. The TRA obligates the Company to deliver specified quantities of cryptocurrency upon the investor's exercise of its rights under the agreement, and therefore exposes the Company to changes in the value of the underlying digital assets. Accordingly, the TRA is accounted for as a derivative liability under ASC 815.
The derivative liability was initially measured based on the fair value of the underlying cryptocurrency subject to the investor's rights under the agreement. Subsequent to initial recognition, the liability is remeasured at fair value at each reporting date, with changes in fair value recognized in the Company's condensed consolidated statements of operations.
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, 2026 and December 31, 2025 the Company had approximately $
8
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Fair Value Option of Accounting
The Company has elected the option under ASC 825-10, Financial Instruments (“ASC 825”), to measure its short-term convertible note payable issued at fair value. 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. The Company also elected to measure incremental warrants under ASC 825.
Recently Adopted Accounting Standards
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments became effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted the guidance prospectively in this fiscal year beginning January 1, 2026. The adoption of this standard did not have a material impact on our consolidated balance sheets, results of operations, or cash flows.
Recently Issued Accounting Standards Not Yet Adopted
In April 2026, the FASB issued ASU 2026-1, Initial Measurement of Paid-in-Kind (PIK) Dividends on Equity-Classified Preferred Stock. The amendments in this Update require that PIK dividends on equity-classified preferred stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. For example, if the preferred stock agreement specifies that PIK dividends are calculated by multiplying the PIK dividend rate by the liquidation value of the preferred stock outstanding, an entity should initially measure the PIK dividend at that amount. The liquidation value (or liquidation preference) of the preferred stock is typically defined by the preferred stock agreement and specifies the value of the preferred stock upon the occurrence of a liquidation event (such as the entity becoming insolvent). When preferred stock is not issued at a discount or premium, the liquidation value upon initial issuance is typically the same as the original issuance price of the preferred stock. 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. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-7, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The amendments in this Update exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40). The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: (i). management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to complete recognition threshold”). The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
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 ("VIE"). 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.
9
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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 — Disposal of Membership Interests in LR Kissimmee
On February 4, 2026, the Company completed the sale of its
Under the terms of the agreement, the Company is entitled to receive aggregate consideration of $
Concurrently with the disposition, the Company entered into a Trademark and Brand Licensing Agreement with LR Kissimmee providing LR Kissimmee a non-exclusive, non-transferable license to utilize certain Company trademarks, branding, and technology resources in exchange for a monthly licensing fee of $
The transaction was undertaken as part of the Company's strategy to divest a non-core office operation, improve liquidity, reduce operating expenses, and reallocate capital toward its core brokerage, technology, and ancillary service businesses. Management indicated that the divested operation represented approximately
A summary of the transaction consideration and loss on disposal of LR Kissimmee is as follows:
Consideration | | | | |
Note receivable | | $ | | |
Carrying amount of non-controlling interests of LR Kissimmee | | | | |
| | | | |
| | | | |
Book basis of investment in LR Kissimmee | | | | |
Loss on disposal of LR Kissimmee | | $ | ( | ) |
A summary of the investment in LR Kissimmee's related assets and liabilities is as follows:
| | As of February 4, 2026 | | |
Assets: | | | | |
Cash | | $ | | |
Accounts receivable, net | | | | |
Other current assets | | | | |
Property and equipment, net | | | | |
Right-of-use asset, net | | | | |
Intangible assets, net | | | | |
Goodwill | | | | |
Total Assets | | $ | | |
| | | | |
Liabilities: | | | | |
Accounts payable | | $ | | |
Accrued expenses | | | | |
Contract liabilities | | | | |
Lease liability | | | | |
Note payable | | | | |
Total liabilities | | $ | | |
Note 3 — Goodwill and Intangible Assets
Goodwill
The gross carrying amount of goodwill as of June 30, 2026 and December 31, 2025 was $
|
| 2026 |
|
| 2025 |
| ||
Balance, January 1 |
| $ |
|
| $ |
| ||
Disposal of interest in LR Kissimmee |
|
| ( | ) |
|
|
| |
Impairment |
|
|
|
|
| ( | ) | |
Goodwill, June 30 |
| $ |
|
| $ |
| ||
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 impairment during the six months ended June 30, 2026 and 2025.
10
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, 2026 | | ||||||||||||||
| | Period | | | Gross | | | Accumulated | | | | | | | Net | | ||||
| | (in years) | | | Carrying Amount | | | Amortization | | | Disposals Net | | | Amount | | |||||
Franchise agreement | | | | | $ | | | $ | | | $ | | | $ | | |||||
Agent relationships | | | | | | | | | | | | | | | | |||||
Real estate listings | | | - | | | | | | | | | | | | | | ||||
Non-compete agreements | | | | | | | | | | | | | | | | |||||
Total | | | | | | $ | | | $ | | | $ | | | $ | | ||||
| Weighted Average | | | | | | | | | | | | | | | | |
| Remaining | | | | | | | | | | | | | | | | |
| Amortization | | December 31, 2025 | | |||||||||||||
| Period | | Gross | | | Accumulated | | | | | | | Net | | |||
| (in years) | | Carrying Amount | | | Amortization | | | Impairment | | | Amount | | ||||
Franchise agreement | | $ | | | $ | | | $ | | | $ | | |||||
Agent relationships | | | | | | | | | | | | | |||||
Real estate listings | - | | | | | | | | | | | | | ||||
Non-compete agreements | | | | | | | | | | | | | |||||
Total | | | $ | | | $ | | | $ | | | $ | | ||||
For the three months and six months ended June 30, 2026 amortization expense was $
| June 30, 2026 | |
2026-remainder of the year |
$
| |
2027 |
| |
2028 |
| |
2029 |
| |
2030 |
| |
Thereafter |
| |
Total |
$
| |
11
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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, accounts receivable, accounts payable, and accrued expenses reflected in the condensed consolidated financial statements approximate fair value due to their short-term maturities.
The Company determined that on June 30, 2026 and December 31, 2025, 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.
12
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Securities Purchase Agreement (“SPA 2”)
On January 8, 2026, the Company consummated the Initial Closing under the SPA 2 dated November 12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $
The Company evaluated the conversion and settlement provisions contained within the Convertible Note 2026 in accordance with ASC 815 and ASC 480, Distinguishing Liabilities from Equity. The Convertible Note 2026 is convertible into shares of the Company's common stock at a conversion price initially established at $
Management assessed whether the embedded conversion feature required bifurcation as a derivative liability or qualified for equity classification. To the extent the conversion feature is determined not to be indexed solely to the Company's own stock or otherwise fails the equity-classification conditions, the feature is recorded at fair value and subsequently remeasured each reporting period.
The fair value of any bifurcated conversion feature was determined using a Monte Carlo simulation model and/or lattice model, incorporating assumptions regarding the common stock price; expected stock price volatility; expected term; risk-free interest rates; probability of future drawdowns under the Securities Purchase Agreement; expected conversion behavior; and contractual floor-price provisions.
These measurements utilize significant unobservable inputs and are therefore classified as Level 3 within the fair value hierarchy.
Token Rights Agreement (“Token Rights”)
The Company's TRA liability is measured at fair value on a recurring basis. The TRA provides the investor with the right to receive specified quantities of digital assets with designated financing proceeds. See Note 5 – Borrowings for further discussion.
The fair value of the TRA liability is determined based on the number of rights to digital asset tokens subject to the investor's rights under the agreement and the observable market value of the underlying stablecoins held by the Company. Because the underlying assets consist primarily of restricted cash, and digital assets, which are designed to maintain a value of approximately $
The Company classifies the TRA liability within Level 2 of the fair value hierarchy because the valuation is based principally on observable market pricing information for the underlying stablecoins and does not require significant unobservable inputs.
13
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Securities Purchase Agreement (“SPA 1”)
On February 4, 2025, the Company entered into an purchase agreement with an investor for a Senior Secured Convertible Note (“Convertible Note 2025”) with a face value of $
The purchase price paid by the Investor under the SPA 1 for the Convertible Note 2025 and Incremental Warrants was $
As a result of applying the fair value option, direct costs and fees related to the Convertible Note 2025 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”)
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 $
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 $
|
| June 18, |
| |
|
| 2025 |
| |
Stated Value |
| $ |
| |
Dividend Rate |
|
| % | |
Conversion Price |
| $ |
| |
Alternate Conversion Amount |
| $ |
| |
Required Premium |
|
| % | |
Stock Price |
| $ |
| |
VWAP |
| $ |
| |
At the closing of the Exchange, the Company recognized a gain on settlement of the Incremental Warrants of $
The following tables provide the fair value and contractual principal balance outstanding on the Convertible Note 2026 accounted for under the fair value option as of January 8, 2026, March 31, 2026 and June 30, 2026:
| | As of | | | As of | | | As of | | |||
| | January 8, | | | March 31, | | | June 30, | | |||
| | 2026 | | | 2026 | | | 2026 | | |||
Convertible Note 2026 fair value | | $ | | | $ | | | $ | | |||
Convertible Note 2026, contractual principal outstanding | | $ | | | $ | | | $ | | |||
Token Rights | | $ | | | $ | | | $ | | |||
The fair value of the Convertible Note 2026 was calculated using a fair value analysis considering the following factors and assumptions:
| | January 8, | | | March 31, | | | June 30, | | |||
| | 2026 | | | 2026 | | | 2026 | | |||
Stock Price on Valuation Date | | $ | | | $ | | | $ | | |||
Fixed Conversion Price | | $ | | | $ | | | $ | | |||
| | | | | | | | | | | | |
Market Price Discount | | | % | | | % | | | % | |||
Redemption Premium | | | % | | | % | | | % | |||
Interest Rate | | | % | | | % | | | % | |||
The following table provides the fair value and contractual principal balance outstanding on the Convertible Note 2025 accounted for under the fair value option as of February 4, 2025, March 31, 2025, June 26, 2025, June 30, 2025 and December 31,2025:
| | As of | | | As of | | | As of | | | As of | | | As of | | |||||
| | February 4, | | | March 31, | | | June 26, | | | June 30, | | | December 31, | | |||||
| | 2025 | | | 2025 | | | 2025 | | | 2025 | | | 2025 | | |||||
Convertible Note 2025 fair value | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
Convertible Note 2025, contractual principal outstanding | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
The following table provides the fair value balance outstanding on the Incremental Warrants accounted for under the fair value option as of February 4, 2025, March 31, 2025, June 18, 2025, June 30, 2025 and December 31,2025:
| | As of | | | As of | | | As of | | | As of | | | As of | | |||||
| | February 4, | | | March 31, | | | June 18, | | | June 30, | | | December 31, | | |||||
| | 2025 | | | 2025 | | | 2025 | | | 2025 | | | 2025 | | |||||
Incremental Warrants | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
The fair value of the Convertible Note 2025 was calculated using a fair value analysis considering the following factors and assumptions:
| | December 31, | | | June 26, | | | June 26, | | | March 31, | | | February 4, | | |||||
| | 2025(2) | | | 2025 Post Amendment(2) | | | 2025 Pre-Amendment(2) | | | 2025(1) | | | 2025(1) | | |||||
Stock Price | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
Conversion Price | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
Alternate Conversion Price | | $ | | | $ | | | $ | | | $ | | | $ | | |||||
Alternate Conversion Amount | | | % | | | % | | | % | | | % | | | % | |||||
Redemption Premium | | | % | | | % | | | % | | | % | | | % | |||||
Interest Rate | | | % | | | % | | | % | | | % | | | % | |||||
(1) | The fair value analysis of the convertible notes 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 |
14
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
The fair value of the Incremental Warrants was calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies:
| | February 4, | | | March 31, | | | June 18, | | |||
| | 2025(1) | | | 2025(1) | | | 2025(1) | | |||
Face Value | | $ | | | $ | | | $ | | |||
Exercise Price | | $ | | | $ | | | $ | | |||
Stock Price | | $ | | | $ | | | $ | | |||
Exercise Threshold | | | | | | | ||||||
Valuation per Incremental Warrant upon exercise | | $ | | | $ | | | $ | | |||
Discount Rate | | | % | | | % | | | % | |||
Risk Free Rate | | | % | | | % | | | % | |||
Annualized Volatility | | | % | | | % | | | % | |||
Forecast horizon (years) | | | | | | | | | | |||
(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. |
At March 31, 2025, warrants held by an institutional investor were eliminated through exercising and a redemption and cancellation agreement for $
15
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows:
|
| As of June 30, 2026 |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Convertible Note 2026 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Token Rights |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| As of December 31, 2025 |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Convertible Note 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The following table provides a summary of changes in fair value associated within the Level 2 and Level 3 for the six-month period ended June 30, 2026:
| 2026 |
|
|
| | |||||||
| Convertible Note |
| Convertible Note |
| Token Rights |
| Total |
| ||||
| 2025 |
| 2026 |
|
|
| |
|
| | ||
Balance – January 1, |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Conversion into common stock |
| ( | ) |
|
|
|
|
| ( | ) | ||
Issuance |
|
|
|
|
|
|
|
| ||||
Change in fair value |
|
|
| ( | ) |
|
|
|
| |||
Balance – March 31, |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Conversion into common stock |
|
|
|
|
|
|
|
| ||||
Issuance |
|
|
|
|
| ( | ) |
| ( | ) | ||
Change in fair value |
|
|
|
|
|
|
|
| ||||
Balance – June 30, |
$
|
|
$
|
|
$
|
|
$
|
| ||||
The following table provides a summary of changes in fair value associated with the Level 3 liability for the six months ended June 30, 2025:
| 2025 |
| |
Balance – January 1, |
$
|
| |
Issuance of derivative liability |
|
| |
Cash paid to settle derivative liability |
| ( | ) |
Issuance of cashless shares for exercising warrants |
| ( | ) |
Extinguishment of derivative liability |
| ( | ) |
Change in fair market value - extinguished warrants |
| ( | ) |
Change in fair market value - new warrants |
| ( | ) |
Balance – March 31, |
$
|
| |
Extinguishment of derivative liability |
| ( | ) |
Change in fair market value - extinguished warrants |
|
| |
Balance – June 30, |
$
|
| |
16
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 $
30, 2025, respectively.
Convertible Note 2026
On January 8, 2026, the Company consummated the Initial Closing under the SPA 2, pursuant to which it issued to the Investors a Convertible Note 2026 in the principal amount of $
On July 31, 2026, the Company and the accredited investor entered into a certain waiver (the “Waiver”), waiving certain Events of Default (as defined in the Convertible Note 2026) with regard to the Company's failure to timely pay interest under the Convertible Note 2026, through July 31, 2026, and the Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Pursuant to the terms of the Waiver, the holder of the Convertible Note 2026 waived its rights and remedies arising solely from the specified Events of Default, including, but not limited to, the right to impose default penalties, charge default interest, and accelerate amounts due under the Convertible Note 2026. All other terms of the Convertible Note 2026 remained in full force and effect.
On August 17, 2026, the Company and the accredited investor entered into a certain waiver (the “Waiver”), waiving certain Events of Default (as defined in the Convertible Note 2026) with regard to the Company's failure to timely pay interest under the Convertible Note 2026, through August 21, 2026, and the Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Pursuant to the terms of the Waiver, the holder of the Convertible Note 2026 waived its rights and remedies arising solely from the specified Events of Default, including, but not limited to, the right to impose default penalties, charge default interest, and accelerate amounts due under the Convertible Note 2026. All other terms of the Convertible Note 2026 remained in full force and effect.
The Initial Note is convertible into shares of the Company’s common stock, par value $
The Company has agreed that, no later than thirty calendar days after the date of the Initial Closing, it will seek approval of the Company’s stockholders, either at a special meeting or by written consent, to adjust the Floor Price of the Initial Note and all other Notes pursuant to the terms of the Initial Note. On January 23, 2026 the noteholder requested that this initial approval be delayed. As of June 30, 2026 there was no change to this request.
The Initial Note ranks pari passu with all other Notes and the February Note (as defined in the Purchase Agreement) and senior to all other existing and future indebtedness of the Company and its subsidiaries (other than Permitted Indebtedness secured by Permitted Liens (both as defined in the Purchase Agreement and/or Notes)) and is secured by (i) a first-priority security interest in substantially all of the Company’s and its subsidiaries’ assets purchased or acquired with the proceeds of the Initial Closing pursuant to a Security and Pledge Agreement, Guaranty and an Account Control Agreement (each, as defined below) and (ii) second priority security interest in the remaining assets of the Company and its subsidiaries (subject to the first lien of the holder(s) of the February Note).
In connection with the Initial Closing on January 8, 2026, as contemplated under the Purchase Agreement: (i) the Company and each of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property Security Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral Agent a lien and security interest in certain intellectual property of the Company.
Amendment to Purchase Agreement
On March 24, 2026, the Company and Investors entered into an Amendment (the “SPA Amendment”) to amend the SPA 2 and provide that the net proceeds to the Company from any further equity line of credit, equity purchase facility, or at-the-market offering shall be allocated as follows: (i) until such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $
In addition, the Company agreed to reimburse the Buyers and the Advisors for their costs and expenses, including legal fees, in an aggregate amount of up to $
Except as amended by the SPA Amendment, all other terms of the SPA 2 including the exhibits thereto, remain unchanged and are in full force and effect.
Token Rights
In connection with the SPA 2 entered into on November 12, 2025, the Company issued the TRA to the investors. Pursuant to the TRA, the holders are entitled, upon exercise and for no additional consideration, to receive certain digital assets acquired by the Company using specified financing proceeds. The holders are entitled to receive (i)
The TRA becomes exercisable beginning 60 days following issuance and remains exercisable through the tenth anniversary of the issuance date. The agreement provides for settlement through the delivery of specified quantities of digital assets rather than a fixed dollar amount.
Upon the initial closing of the Convertible Note 2026 on January 8, 2026, the Company recorded an initial TRA liability of approximately $
On March 24, 2026, the Company and Investors entered into Amendment No. 1 to the TRA (the “Token Right Amendment”), under which the Investor will be entitled to receive upon an aggregate number of Right Tokens equal to the sum of (i) fifty percent (
As of June 30, 2026, approximately
Except as amended by the Token Right Amendment, all other terms of the Token Right remain unchanged and are in full force and effect.
Convertible Note 2025
During the six months ended June 30, 2026, the holder converted the remaining aggregate principal balance of $
Prior to each conversion, the Company remeasured the Convertible Note 2025 to fair value in accordance with its fair value option election. As a result of the remeasurement, the Company recognized an increase in the fair value of the note liability of $
On February 4, 2025, the Company and an Investor entered into the SPA 1, pursuant to which the Company issued to the Investor on such date: (i) a Convertible Note 2025 in the original principal amount of $
The Initial Note accrues interest at a rate of
In connection with the closing of the Convertible Note 2025, 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 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
17
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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
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.
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”)
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)
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 $
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 $
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 $
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 filed on or around November 22, 2024 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.
The interest expense incurred for these senior secured promissory notes was $
18
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Notes Payable-Promissory Note
On September 27, 2024, the Company entered into a promissory note payable whereby the Company borrowed $
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 $
Acquisition Agreement
On February 11, 2026, the Company acquired a
The note is secured pursuant to a Pledge Agreement under which the Company pledged a
Economic Injury Disaster Loans
During 2024, the Company acquired franchises that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $
Future maturities of EIDL term debt as of June 30, 2026, were as follows:
| | June 30, | | |
Economic Injury Disaster Loans-Future Maturities | | 2026 | | |
2026 | | $ | | |
2027 | | | | |
2028 | | | | |
2029 | | | | |
2030 | | | | |
2031 | | | | |
Thereafter | | | | |
Total | | $ | | |
Total Notes Payable as of June 30, 2026 and December 31, 2025 were as follows:
| June 30, |
| December 31, |
| ||
Notes Payable | 2026 |
| 2025 |
| ||
Convertible Note 2025 |
$
|
|
$
|
| ||
Convertible Note 2026 |
|
|
|
| ||
Token Rights Agreement |
|
|
|
| ||
EIDL |
|
|
|
| ||
Acquisition Settlement Agreement |
|
|
|
| ||
Acquisition Agreement |
|
|
|
| ||
Total notes payable |
$
|
|
$
|
| ||
|
|
| |
|
| |
Current portion: |
|
| |
|
| |
Less: Current portion-EIDL |
| ( | ) |
| ( | ) |
Acquisition Settlement Agreements |
| ( | ) |
| ( | ) |
Acquisition Agreement |
| ( | ) |
|
| |
Token Rights Agreement |
| ( | ) |
|
| |
Notes payable, net of current |
$
|
|
$
|
| ||
19
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 to 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 $
Lease costs expense for the three months and six months ended June 30, 2026 were $
Supplemental cash flow information related to leases is as follows:
| | Six Months Ended June 30, | | |||||
| | 2026 | | | 2025 | | ||
Cash paid for amounts included in the measurement of lease liabilities | | $ | | | $ | | ||
Right-of-use assets obtained in exchange for lease liabilities | | $ | | | $ | | ||
Supplemental balance sheet information related to leases is as follows:
| | June 30, | | | December 31, | | ||
| | 2026 | | | 2025 | | ||
Assets: | | | | | | | | |
Right-of-use assets | | $ | | | $ | | ||
Liabilities: | | | | | | | | |
Lease liability, current | | $ | | | $ | | ||
Lease liability, noncurrent | | | | | | | ||
| | $ | | | $ | | ||
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
20
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Future maturities on lease liabilities as of June 30, 2026, are as follows:
| June 30, |
| |
| 2026 |
| |
2026– remainder of year |
$
|
| |
2027 |
|
| |
2028 |
|
| |
2029 |
|
| |
2030 and thereafter |
|
| |
Total minimum lease payments |
|
| |
Less: imputed interest |
| ( | ) |
Present value of lease obligations |
|
| |
Less: current portion |
| ( | ) |
Long-term portion of lease obligations |
$
|
| |
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 $
On March 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit 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 in the amount of $
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 $
On January 13, 2026, Martin Scott CFO Consulting Services, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach of contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and is owed unpaid fees of approximately $
On January 30, 2026, the Company and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa in the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando LLC, action for conversion against Reinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4, 2026 as previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2026.
On February 1, 2026, Stacy-Ann Blair and Delroxry Blair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that La Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest. The plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages of approximately $
The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. Other than as described above, we are not presently a party to any material pending or threatened legal proceedings.
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 — Digital Assets
As of June 30, 2026, the Company held digital assets consisting primarily of USDC and FRAX in a custodial wallet maintained pursuant to the Company's financing agreements. Accordingly, the assets are accounted for as indefinite-lived intangible assets under ASC 350-30. The digital assets are initially recorded at cost, including directly attributable transaction costs, and subsequently measured at historical cost less any impairment losses. These assets are not amortized and are evaluated for impairment at least annually or more frequently if events or changes in circumstances indicate that the assets may be impaired. Any impairment loss is recognized in operating results, and subsequent increases in value are not recognized until realized.
The Company's digital assets are held in custody at BitGo and are subject to contractual transfer restrictions under the Company's financing arrangements. These restrictions are off-chain in nature and do not represent staking arrangements, protocol-level restrictions, smart contract lockups, or vesting provisions.
The digital assets are classified as current since the Company expects to utilize the funds in the near term.
The following table provides a summary of changes in fair value associated with digital assets for the six-month period ended June 30, 2026:
| FRX USD |
| USDC |
| Total |
| ||||||||||||||||||||
| # of units | $/unit |
| $ Value |
| # of units |
| $/unit |
| $ Value |
| # of units |
| $/unit |
| $ Value |
| |||||||||
Balance January 1, 2026 |
| $ |
| $ |
|
|
| $ |
| $ |
|
|
| $ |
| $ |
| |||||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Disposals |
|
|
|
|
|
| ( | ) |
|
|
| ( | ) |
| ( | ) |
|
|
| ( | ) | |||||
Fair value adj |
| - |
| - |
|
|
|
| - |
|
| - |
|
|
|
| - |
|
| - |
|
|
| |||
Balance March 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Disposals |
|
|
|
| |
| ( | ) |
|
|
| ( | ) |
| ( | ) |
|
|
| ( | ) | |||||
Fair value adj |
| - |
| - |
|
|
|
| - |
|
| - |
|
|
|
| - |
|
| - |
|
|
| |||
Balance June 30,2026 |
| $ |
| $ |
|
|
| $ |
|
|
| $ |
| $ |
| $ |
| |||||||||
At June 30, 2026, digital asset units held and fair market value are as follows:
As of June 30, 2026 |
|
|
| |
|
|
| |
|
|
| |
Asset |
| Units Held |
|
| $/unit |
|
| Fair Market Value ($) |
| |||
FRX USD |
|
|
|
| $ |
|
| $ |
| |||
Total |
|
|
|
| $ |
|
| $ |
| |||
Note 8 — Equity 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.
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
21
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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
At June 30, 2026, 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 | | | (in years) | | | Value | | ||||
Vested | | | | | $ | | | | | | | — | | |||
Expected to vest | | | | | | | | | — | | | | — | | ||
Total | | | | | $ | | | | | | | — | | |||
Additional information with respect to warrant activity:
| | | | | | Weighted | | |
| | Number | | | Average | | ||
| | of | | | Exercise | | ||
| | Shares | | | Price | | ||
Balance — December 31, 2025 | | | | | $ | | ||
Granted/ Increase to existing warrants | | | | | | | ||
Exercised | | | | | | | ||
Expired or forfeited | | | | | | | ||
Balance — March 31, 2026 | | | | | | | ||
Granted/ Increase to existing warrants | | | | | | | ||
Exercised | | | | | | | ||
Expired or forfeited | | | ( | ) | | | | |
Balance — June 30, 2026 | | | | | $ | | ||
As of June 30, 2026 and December 31, 2025, there was
22
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Note 9 — 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”)
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 $
In connection with the issuance of the Series B Preferred Stock, the Company incurred direct and incremental expenses of $
As of June 30, 2026, the Company had
Convertible Series B Preferred Stock consisted of the following as of June 30, 2026:
Shares | | | Shares | | | Carrying | | | Original | | | Conversion | | | Common | | |||||
Authorized | | | Issued and | | | Value | | | Issue Price | | | Price | | | Shares | | |||||
| | | Outstanding | | | | | | | | | | | | | | | Upon | | ||
| | | | | | | | | | | | | | | | | | | Conversion | | |
| | | | | $ | | | $ | | | $ | | | | | ||||||
The carrying value in the table above represents the remaining value available to be converted into commons shares based on the applicable conversion prices.
The holders of the Series B Preferred Stock have the following rights and preferences:
Voting Rights
Holders of the Series B Preferred Stock have no voting rights, except as provided in the Certificate of Designation or as otherwise required under applicable Nevada law.
Conversion Rights
Subject to the beneficial ownership limitations set forth in the Certificate of Designation, holders of the Series B Preferred Stock may convert the outstanding Conversion Amount into shares of the Company's common stock at the applicable Conversion Price. The Conversion Price is, at the option of the holder as adjusted: $
No holder may convert shares to the extent that, after giving effect to the conversion, the holder and its affiliates would beneficially own more than
Down-Round Adjustment and Deemed Dividend
The Certificate of Designation contains anti-dilution provisions that require adjustment of the Series B Preferred Stock conversion price upon certain issuances of securities at prices below the then-effective conversion price. On March 4, 2026, the Company issued Series C Preferred Stock with a conversion price below the then-effective conversion price of the Series B Preferred Stock. Accordingly, pursuant to Section 8(a)(ii) of the Certificate of Designation, the conversion price of the Series B Preferred Stock was adjusted to $
The Company determined that the reduction in the conversion price provided additional value to the holders of the Series B Preferred Stock and therefore represented a deemed dividend. For the three and six months ended June 30, 2026, the Company recognized a deemed dividend of $
Because the Company had an accumulated deficit as of June 30, 2026, the deemed dividend was recorded within additional paid-in capital ("APIC"), resulting in no net impact on total stockholders' deficit. The deemed dividend is reflected as an adjustment to net loss available to common stockholders in the computation of basic and diluted net loss per share.
Alternate Conversion Floor Amount
Under the terms of the Certificate of Designation, certain Alternate Conversions may trigger a Conversion Floor Price Condition, requiring the Company either to increase the stated value of the remaining outstanding Series B Preferred Stock by the applicable Alternate Conversion Floor Amount or to pay such amount to the holder in cash. The Company accounts for any Alternate Conversion Floor Amount as a dividend to the holder of the Series B Preferred Stock, whether settled through an increase in the stated value of the preferred stock or through a cash payment.
On February 18, 2026, the holder elected to convert approximately $
The Company elected to satisfy this obligation by increasing the stated value of the remaining outstanding Series B Preferred Stock. Because the Series B Preferred Stock is classified within permanent equity, the increase in stated value was recorded within APIC. The corresponding deemed dividend of $
During the quarter ended June 30, 2026, certain conversions of Series B Preferred Stock from April 24, 2026 through May 15, 2026 triggered the Alternate Conversion Floor Amount provisions contained within the Certificate of Designation. As a result, the Company recognized aggregate Alternate Conversion Floor Amount obligations of approximately $
For the three and six months ended June 30, 2026, the Company recognized deemed dividends of approximately $
Redemption
The Company may redeem all, but not less than all, of the outstanding Series B Preferred Stock at a redemption price equal to the greater of: The Conversion Amount being redeemed; or The value obtained by multiplying: the applicable Conversion Rate; by the highest Closing Sale Price of the Company's common stock during the period specified in the Certificate of Designation.
Dividends
The Series B Preferred Stock does not accrue or pay cash dividends. However, certain adjustments and Alternate Conversion provisions under the Certificate of Designation may result in deemed dividends that are recognized in accordance with applicable accounting guidance.
Liquidation Preference
Upon a liquidation event, holders of the Series B Preferred Stock are entitled to receive, prior to any distribution to holders of common stock and pari passu with any parity securities, an amount equal to the greater of:
Series C Preferred Stock
On March 4, 2026, the Company and an institutional investor (the "Investor") entered into a Securities Purchase Agreement (the "SPA3") pursuant to which the Company issued
Pursuant to the terms of the Certificate of Designation, conversion of the Series C Preferred Stock into shares of the Company's common stock in excess of the limitations imposed by the rules and regulations of the Nasdaq Capital Market is conditional upon obtaining shareholder approval. Until such approval is obtained, conversion of the Series C Preferred Stock remains subject to the exchange cap provisions set forth in the Certificate of Designation.
Convertible Series C Preferred Stock consisted of the following as of June 30, 2026:
Shares | | | Shares | | | Carrying | | | Original | | | Conversion | | | Common | | |||||
Authorized | | | Issued and | | | Value | | | Issue Price | | | Price | | | Shares | | |||||
| | | Outstanding | | | | | | | | | | | | | | | Upon | | ||
| | | | | | | | | | | | | | | | | | | Conversion | | |
| | | | | $ | | | $ | | | $ | | | | | ||||||
The carrying value in the table above represents the remaining value available to be converted into commons shares based on the applicable conversion prices.
Convertible Series C Preferred Stock is classified as permanent equity as a result of there being no redemption features solely within the control of the Company, accordingly this is recorded on the accompanying condensed consolidated balance sheet at its issuance date fair value.
The holders of the Series C Preferred Stock have the following rights and preferences:
Voting
Holders of shares of Series C Preferred Stock generally have no voting rights except as required by Nevada law and with respect to certain protective provisions contained in the Certificate of Designation. The consent of a majority of the outstanding Series C Preferred Stock is required before the Company may, among other things, amend its organizational documents in a manner that adversely affects the Series C Preferred Stock, increase or decrease the authorized number of Series C Preferred Stock, create or authorize any senior or pari passu securities, redeem junior securities, pay dividends on junior securities, issue additional Series C Preferred Stock or otherwise circumvent rights granted to holders of the Series C Preferred Stock.
Conversion Rights
Subject to the Maximum Percentage, holders of outstanding shares of Series C Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount thereof into shares of common stock at the Conversion Rate. For such purpose: (i) "Conversion Amount" means the stated value thereof (or $
In the event a holder elects to convert the Series C Preferred Stock at the Alternate Conversion Price, the Conversion Amount shall be multiplied by (i)
A holder of Series C Preferred Stock does not have the right to convert any portion of its shares to the extent that, following such conversion, the holder together with its affiliates would beneficially own in excess of
Subject to certain exceptions outlined in the Certificate of Designation, including equity issuances under the Company's equity incentive plans and certain strategic acquisitions, if the Company issues common stock or securities convertible into, exercisable for, or exchangeable into common stock at an effective price per share below the then applicable Conversion Price, the Conversion Price of the Series C Preferred Stock shall be reduced to the effective price per share of such 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 C 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 applicable to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price of the Company's common stock on any trading day during the period beginning on the trading day immediately preceding the Company's redemption notice and ending on the trading day immediately prior to the date of redemption payment.
Upon the occurrence of certain bankruptcy-related triggering events specified in the Certificate of Designation, the Company is required to redeem the outstanding Series C Preferred Stock for cash at the redemption price specified in the Certificate of Designation.
Dividends
The Series C Preferred Stock bears no dividends.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company, the Series C Preferred Stock ranks junior to any Senior Preferred Stock, pari passu with any Parity Stock and senior to the Company's common stock and other Junior Stock with respect to the distribution of assets. Holders of the Series C Preferred Stock are entitled to receive distributions in accordance with the priorities established in the Certificate of Designation before any distribution is made to holders of Junior Stock.
Series D Preferred Stock
On May 27, 2026, the Company and an institutional investor (the "Investor") entered into a Securities Purchase Agreement (the "SPA4") pursuant to which the Company agreed to issue up to
On May 29, 2026, the Company filed an amendment to its Form 8-K to correct the authorized number of Series D Preferred Stock shares set forth in the Certificate of Designation from
Pursuant to the terms of the Certificate of Designation, conversion of the Series D Preferred Stock into shares of the Company's common stock in excess of the limitations imposed by the rules and regulations of the Nasdaq Capital Market is conditional upon obtaining shareholder approval. Until such approval is obtained, conversion of the Series D Preferred Stock remains subject to the exchange cap provisions set forth in the Certificate of Designation.
In connection with the issuance of the Series D Preferred Stock, the Company incurred direct and incremental issuance costs of $
Convertible Series D Preferred Stock consisted of the following as of June 30, 2026:
Shares | | | Shares | | | Carrying | | | Original | | | Conversion | | | Common | | |||||
Authorized | | | Issued and | | | Value | | | Issue Price | | | Price | | | Shares | | |||||
| | | Outstanding | | | | | | | | | | | | | | | Upon | | ||
| | | | | | | | | | | | | | | | | | | Conversion | | |
| | | | | $ | | | $ | | | $ | | | | | ||||||
The carrying value in the table above represents the remaining value available to be converted into commons shares based on the applicable conversion prices.
Convertible Series D Preferred Stock is classified as permanent equity as a result of there being no redemption features solely within the control of the holder. Accordingly, the Series D Preferred Stock is recorded on the accompanying condensed consolidated balance sheet at its issuance date fair value.
The holders of the Series D Preferred Stock have the following rights and preferences:
Voting
Holders of shares of Series D Preferred Stock generally have no voting rights except as required by Nevada law and with respect to certain protective provisions contained in the Certificate of Designation. The consent of a majority of the outstanding Series D Preferred Stock is required before the Company may, among other things, amend its organizational documents in a manner that adversely affects the Series D Preferred Stock, increase or decrease the authorized number of Series D Preferred Stock, create or authorize any senior or pari passu securities, redeem junior securities, pay dividends on junior securities, issue additional Series D Preferred Stock or otherwise circumvent rights granted to holders of the Series D Preferred Stock.
Conversion Rights
Subject to the Maximum Percentage, holders of outstanding shares of Series D Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount thereof into shares of common stock at the Conversion Rate. For such purpose: (i) "Conversion Amount" means the stated value thereof (or $
In the event a holder elects to convert the Series D Preferred Stock at the Alternate Conversion Price, the Conversion Amount shall be multiplied by (i)
A holder of Series D Preferred Stock does not have the right to convert any portion of its shares to the extent that, following such conversion, the holder together with its affiliates would beneficially own in excess of
Subject to certain exceptions outlined in the Certificate of Designation, including equity issuances under the Company's equity incentive plans and certain strategic acquisitions, if the Company issues common stock or securities convertible into, exercisable for, or exchangeable into common stock at an effective price per share below the then applicable Conversion Price, the Conversion Price of the Series D Preferred Stock shall be reduced to the effective price per share of such 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 D 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 applicable to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price of the Company's common stock on any trading day during the period beginning on the trading day immediately preceding the Company's redemption notice and ending on the trading day immediately prior to the date of redemption payment.
Upon the occurrence of certain bankruptcy-related triggering events specified in the Certificate of Designation, the Company is required to redeem the outstanding Series D Preferred Stock for cash at the redemption price specified in the Certificate of Designation.
Dividends
The Series D Preferred Stock bears no dividends.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company, the Series D Preferred Stock ranks junior to any Senior Preferred Stock, pari passu with any Parity Stock and senior to the Company's common stock and other Junior Stock with respect to the distribution of assets. Holders of the Series D Preferred Stock are entitled to receive distributions in accordance with the priorities established in the Certificate of Designation before any distribution is made to holders of Junior Stock.
Series X Preferred Stock Redemption
On January 8, 2026, pursuant to the Redemption Agreement entered into on November 12, 2025, the Company redeemed
The Redemption Agreement also provides for an additional contingent payment of up to $
Common Stock Issuances
For the six months ended June 30, 2026
On February 17, 2026, the Company entered into a marketing agreement pursuant to which the Company agreed to issue
For the six months ended June 30, 2025
On January 17, 2025, the Company issued
On February 5, 2025, the Company issued the CEO an aggregate of
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
23
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue
On March 10, 2025, the Company issued
On March 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue
On April 21, 2025, the Company issued the CEO an aggregate of
For the six months ended June 30, 2025, the holder of our Senior Secured promissory notes converted
For the three-months and six-months ended June 30, 2025, the Company utilized their ATM and sold a total of
For the three months ended March 31, 2025, the Company issued
For the three-months and six-months ended June 30, 2025, the Company issued
pursuant to the Restricted Stock Unit (RSU) vesting with a value of $
Stock Option Awards
For the three-month and six month periods ended June 30, 2026 the Company recorded stock-based compensation for employees and directors awards of $
At June 30, 2026, 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 | | | | | $ | | | | | | $ | — | | |||
Expected to vest | | | | | | | | | | | | — | | |||
Total | | | | | $ | | | | | | $ | — | | |||
24
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, 2025 | | | | | $ | | ||
Granted | | | | | | | ||
Expired or forfeited | | | | | | | ||
Balance — March 31, 2026 | | | | | $ | | ||
Granted | | | | | | | ||
Expired or forfeited | | | | | | | ||
Balance — June 30, 2026 | | | | | $ | | ||
The weighted average fair value of stock options granted in the quarter ended June 30, 2025 and the assumptions used in the Black-Scholes model are set forth in the table below.
| | June 30, | | |
| | 2026 | | |
Weighted average fair value | | $ | | |
Dividend yield | | | | |
Expected volatility factor | | | % | |
Risk-free interest rate | | | % | |
Expected life (in years) | | | | |
As of June 30, 2026, unrecognized compensation expense related to stock option awards totaled $
Restricted Stock Units
| | | | | | Weighted | | |
| | Number | | | Average | | ||
| | of | | | Exercise | | ||
| | Shares | | | Price | | ||
Balance — December 31, 2025 | | | | | $ | | ||
Granted | | | | | | | ||
Vested or forfeited | | | | | | | ||
Balance — June 30, 2026 | | | | | | | ||
25
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
On February 1, 2025, a Restricted Stock Unit (“RSU”) (prior to subsequent reverse splits) covering
For the three month periods ending June 30, 2026 and 2025, the Company recorded $
Acquisition of Noncontrolling Interests
On February 11, 2026, the Company acquired the remaining
On April 4, 2026, the Company acquired the remaining
Note 10 — Earnings Per Share
Basic loss per share of common stock attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted 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 all 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 all periods presented.
The following table sets forth common stock equivalents that have been excluded from the computation of dilutive weighted average shares outstanding as their inclusion would have been antidilutive:
| | As of | | |||||
| | June 30, | | |||||
| | 2026 | | | 2025 | | ||
Warrants | | | | | | | ||
Options | | | | | | | ||
Restricted stock units | | | | | | | ||
Preferred stock series B | | | | | | | ||
Preferred stock series C | | | | | | | ||
Preferred stock series D | | | | | | | ||
Total | | | | | | | ||
Note 11 — Segments
The Company’s business is organized into reportable segments which aggregate 100% of revenue:
| 1) | Real Estate Brokerage Services (Residential) |
| 2) | Franchising Services |
| 3) | Coaching Services |
| 4) | Property Management |
| 5) | Real Estate Brokerage Services (Commercial) |
| 6) | Title Settlement and Insurance |
26
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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, 2026 and 2025, respectively.
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
| 2026 |
| 2025 |
| 2026 |
| 2025 |
| ||||
Revenue by segment |
|
| |
|
| |
|
| |
|
| |
Real Estate Brokerage Services (Residential) |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Franchising Services |
|
|
|
|
|
|
|
| ||||
Coaching Services |
|
|
|
|
|
|
|
| ||||
Property Management |
|
|
|
|
|
|
|
| ||||
Real Estate Brokerage Services (Commercial) |
|
|
|
|
|
|
|
| ||||
Title Settlement and Insurance |
|
|
|
|
|
|
|
| ||||
|
$
|
|
$
|
|
$
|
|
$
|
| ||||
Cost of revenue by segment |
|
| |
|
| |
|
| |
|
| |
Real Estate Brokerage Services (Residential) |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Franchising Services |
|
|
|
|
|
|
|
| ||||
Coaching Services |
|
|
|
|
|
|
|
| ||||
Property Management |
|
|
|
|
|
|
|
| ||||
Real Estate Brokerage Services (Commercial) |
|
|
|
|
|
|
|
| ||||
Title Settlement and Insurance |
|
|
|
|
|
|
|
| ||||
|
$
|
|
$
|
|
$
|
|
$
|
| ||||
Gross profit (loss) by segment |
|
| |
|
| |
|
| |
|
| |
Real Estate Brokerage Services (Residential) |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Franchising Services |
|
|
| ( | ) |
|
|
| ( | ) | ||
Coaching Services |
|
|
|
|
|
|
|
| ||||
Property Management |
|
|
|
|
|
|
|
| ||||
Real Estate Brokerage Services (Commercial) |
|
|
|
|
|
|
|
| ||||
Title Settlement and Insurance |
|
|
|
|
|
|
|
| ||||
|
$
|
|
$
|
|
$
|
|
$
|
| ||||
G&A by segment |
|
| |
|
| |
|
| |
|
| |
Real Estate Brokerage Services (Residential) |
$
|
|
$
|
|
$
|
|
$
|
| ||||
Franchising Services |
|
|
|
|
|
|
|
| ||||
Coaching Services |
|
|
|
|
|
|
|
| ||||
Property Management |
|
|
|
|
|
|
|
| ||||
Real Estate Brokerage Services (Commercial) |
|
|
|
|
|
|
|
| ||||
Title Settlement and Insurance |
|
|
|
|
|
|
|
| ||||
|
$
|
|
$
|
|
$
|
|
$
|
| ||||
In addition to the expenses from these segments, corporate expenses net of revenues and adjustments were $
27
La Rosa Holdings Corp. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
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 ended June 30, 2026 and 2025, respectively.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2026 |
|
| 2025 |
|
| 2026 |
|
| 2025 |
| ||||
Performance obligations satisfied at a point in time |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Performance obligations satisfied over time |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Note 12 — Subsequent Events
Series E Preferred Stock Financing
On July 9, 2026, the Company filed a Certificate of Designation of Rights and Preferences of the Series E Convertible Preferred Stock par value $
On July 10, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor
On July 31, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor
On August 18, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor
Equity Issuances
From August 3, 2026, through August 14, 2026, the holder of our Convertible Note 2026 converted $
On July 1, 2026, and July 21, 2026, the holder of the Series B preferred shares converted
From August 3, 2026, through August 10, 2026, the Company utilized its Equity Purchase Facility and sold
On July 8, 2026, the Company accelerated all remaining Restricted Stock Units for a total of
Nasdaq Notice Regarding Filing Deficiency
On August 21, 2026, the Company received a notice from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company was 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 period ended June 30, 2026 with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until October 20, 2026, to submit a plan to regain compliance, and if the Staff accepts such plan, it may grant an exception of up to 180 calendar days from the filing due date, or until February 16, 2027, to regain compliance.
28
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 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, 2025, filed with the U.S. Securities and Exchange Commission (“SEC” or “Commission”) on June 4, 2026, 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 Realty. We operate 24 corporate-owned brokerage offices across Florida, California, Texas, Georgia and Puerto Rico and have begun our expansion into Europe, beginning with Spain. The Company also has five franchised offices and branches and three affiliated brokerage locations in the United States and Puerto Rico that pay us fees. We also have LR Realty Spain, which is a full-service brokerage office located primarily in Malaga, Spain. Additionally, the Company operates a full-service escrow settlement and title company in Florida.
Our real estate brokerage offices, both corporate and franchised, are staffed with 2,807 licensed real estate brokers and sales associates as of June 30, 2026.
Our franchised offices are currently:
Name |
|
Location |
La Rosa Realty Internacional, LLC |
|
Celebration, Florida |
La Rosa Realty Central Florida, LLC |
|
Davenport, Florida |
La Rosa Realty Jacksonville, LLC |
|
Jacksonville, Florida |
La Rosa Realty Kendall, LLC |
|
Miami, Florida |
The Realty 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.
Since completing our initial public offering in October 2023, we have expanded our corporate brokerage operations through a combination of acquisitions, strategic investments, and geographic expansion. These initiatives have increased our operational footprint, expanded our agent network, and enhanced our ability to provide complementary real estate-related services throughout the markets we serve.
As of the first quarter of 2026, our business includes residential and commercial real estate brokerage services, franchising, title settlement and insurance services, property management, real estate education and coaching, and technology-driven support services. We continue to focus on developing additional revenue streams that complement our core brokerage business while increasing value for our agents and clients.
During 2025, we expanded our service offerings through the launch of LR Agent Advance LLC, a wholly owned subsidiary that provides commission advancement services exclusively to La Rosa agents. We believe this program improves agent financial flexibility, supports agent retention, and creates an additional revenue opportunity for the Company.
Management remains focused on integrating acquired operations, enhancing operating efficiencies, increasing agent productivity, and expanding our market presence. We continue to evaluate opportunities to grow through organic recruiting initiatives, strategic acquisitions, and the development of complementary service offerings that strengthen our overall ecosystem. While we regularly review potential acquisition opportunities, there can be no assurance that discussions with prospective acquisition targets will result in completed transactions or that any future transactions will be completed on favorable terms.
Recent Developments
Acquisition of Remaining Interest in Orlando
On April 3, 2026, the Company, La Rosa Realty Orlando LLC, a majority owned subsidiary of the Company (the “Orlando”), and two selling members of Orlando (collectively, the “Sellers”), entered into a settlement agreement (“Settlement Agreement”), pursuant to which, each of the Sellers sold their 24.5% membership interests (collectively, the “Interests”) in Orlando to the Company, and the Company agreed to (i) forgive the amount of $106,447 allegedly owed by one of the Sellers to Orlando, (ii) forgive the alleged $152,295 franchise fee obligation under one of the Seller’s personal guaranty, (iii) pay one of the Sellers the amount of $10,000, and (iv) dismiss without prejudice the civil suit of La Rosa Realty Corp., La Rosa Realty Orlando LLC v. Reinaldo Zapata, Viviana Figueroa, pending in the Circuit Court of Orange County, Florida. As a result of this transaction, Orlando became a wholly-owned subsidiary of the Company.
Nasdaq Notices Regarding Filing Deficiencies
On April 16, 2026, the Company received a notice (the “10-K 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until June 15, 2026, 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 Initial Delinquent Filing’s due date (or until October 12, 2026) to regain compliance.
On May 21, 2026, the Company also received a notice (the “10-Q Notice,” and together with the 10-K Notice, the “Notices”) from the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remains delinquent in filing its Initial Delinquent Filing. The 10-Q Notice further states that, in accordance with Nasdaq rules and as previously communicated in the 10-K Notice, the Company has until June 15, 2026, to submit a plan to regain compliance, and if the Staff accepts such plan, any exception granted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026, to regain compliance.
On June 4, 2026, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 with the SEC. On June 10, 2026, the Company received a letter from the Staff indicating that based on the June 4, 2026 filing of the Form 10-K, the Staff has determined that the Company complies with Nasdaq Listing Rule 5250(c)(1) with regard to the Form 10-K filing. On July 31, 2026, the Company filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 with the SEC. On August 4, 2026, the Company received a letter from the Staff indicating that based on the July 31, 2026 filing of the Quarterly Report on Form 10-Q, the Staff has determined that the Company complies with Nasdaq Listing Rule 5250(c)(1) and this matter is now closed.
On August 21, 2026, the Company received a notice from the Staff that the Company was 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 period ended June 30, 2026 with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until October 20, 2026, to submit a plan to regain compliance, and if the Staff accepts such plan, it may grant an exception of up to 180 calendar days from the filing due date, or until February 16, 2027, to regain compliance.
April 2026 Reverse Stock Split
Following the Stockholders Approval described above, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on April 20, 2026 (“April 2026 Reverse Stock Split”). As a result of the April 2026 Reverse Stock Split, every ten (10) 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 April 2026 Reverse Stock Split.
Series D Preferred Stock Financing
On May 27, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 250 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series D Preferred Stock with the Secretary of State of the State of Nevada. The rights, preferences and limitations of the Series D Preferred Stock are set forth in the Certificate of Designation, including conversion rights into shares of the Company’s common stock, subject to certain limitations and adjustment provisions. Pursuant to the agreement, the remaining 250 shares of Series D Preferred Stock were issuable by the Company to the Investor at its sole option upon the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. On June 4, 2026, the Company filed its Annual Report on Form 10-K with the SEC. On June 10, 2026, in accordance with the terms of the securities purchase agreement, the Company issued the Investor remaining 250 Series D Preferred Stock for aggregate gross proceeds of $250,000.
Nasdaq Notice Regarding Stockholders’ Equity
On June 10, 2026, the Company received a letter from the Staff indicating that, because the Company’s stockholders’ equity as reported in its Form 10-K for the fiscal year ended December 31, 2025, was $(1,848,252), 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. The letter from Nasdaq has no immediate effect on the listing of the Company’s common stock and its common stock continues to be listed on The Nasdaq Capital Market under the symbol “LRHC”. On July 27, 2026, the Company submitted to Nasdaq a plan of compliance addressing how the Company intends to regain compliance with Nasdaq’s listing rules with respect to the Nasdaq Listing Rule 5550(b)(1). If the plan is accepted, the Company can be granted up to 180 calendar days from the date of the letter (or until December 7, 2026) to evidence compliance.
Cancelled Transactions
In February 2026, the Company entered into a contract to acquire a parcel of land in Osceola County, Central Florida, which was cancelled by the parties on May 15, 2026 upon mutual agreement.
In March 2026, the Company entered into a non-binding letter of intent to acquire 100% of the issued and outstanding equity interests of Consensus Core Technologies, Inc. (“Consensus”), along with certain of its affiliates and subsidiaries. In August 2026 the Company decided to discontinue pursuing the transaction with Consensus.
Series E Preferred Stock Financings
On July 9, 2026, the Company filed respective Certificate of Designation of Rights and Preferences of the Series E Convertible Preferred Stock, par value $0.0001 per share (“Series E Preferred Stock”), with the Secretary of State of the State of Nevada.
On July 10, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 250 shares of the Company’s Series E Preferred Stock, for a purchase price of $1,000 per share.
On July 31, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 150 shares of the Series E Preferred Stock, for a purchase price of $1,000 per share.
On August 18, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 210 shares of the Series E Preferred Stock, for a purchase price of $1,000 per share.
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. Our agent count decreased 6.5 %, from 3,001 at June 30, 2025 to 2,807 at June 30, 2026.
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 Realty 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 the year ended December 31, 2025 filed with the SEC on June 4, 2026) “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 benchmark 30-year fixed conforming mortgage rate rose to a peak of about 8% during the second half of 2023, according to Freddie Mac data. That interest rate then retreated to between 6.08% and 7.22% during 2024 and between 6.15% to 7.04% during 2025. Consequently, housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. 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 2026, the federal funds rate was 363 basis points. The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments.
In June 2026, the existing home sales market declined 2.4% from May and increased 2.8% from the prior year reaching a seasonally adjusted annual rate (SAAR) of 4.09 million units, and a record median price of $440,600, according to the NAR. The fluctuations in monthly home sales activity are driven by mild fluctuations in mortgage rates. This indicates that home buyers are sensitive to affordability conditions. Job gains will continue to provide support for the housing market. The $440.6 thousand median home price is an all-time high. Affordability is better than a year ago because wage growth is outpacing home price growth, However, progress on long-term housing affordability could be hampered if inventory growth continues to stall. Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership.
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:
|
● |
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. |
|
● |
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. |
|
● |
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. |
|
● |
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. |
|
● |
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. |
|
● |
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. |
|
● |
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, 2025 filed with the Commission on June 4, 2026.
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. There have been no material changes to the Company’s critical accounting estimates as compared to the estimates described in the Annual Report on Form 10-K for the year ended December 31, 2025 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.
Results of Operations
Revenue
Three Months Ending June 30
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Real Estate Brokerage Services (Residential) |
|
$ | 14,655,979 |
|
|
$ | 19,709,947 |
|
|
$ | (5,053,968 |
) |
|
|
-26 |
% |
Franchising Services |
|
|
21,576 |
|
|
|
31,222 |
|
|
|
(9,646 |
) |
|
|
-31 |
% |
Coaching Services |
|
|
299 |
|
|
|
122,692 |
|
|
|
(122,393 |
) |
|
|
-100 |
% |
Property Management |
|
|
94,829 |
|
|
|
101,642 |
|
|
|
(6,813 |
) |
|
|
-7 |
% |
Real Estate Brokerage Services (Commercial) |
|
|
205,363 |
|
|
|
188,020 |
|
|
|
17,343 |
|
|
|
9 |
% |
Title Settlement and Insurance |
|
|
73,670 |
|
|
|
78,574 |
|
|
|
(4,904 |
) |
|
|
-6 |
% |
Total Revenue |
|
$ | 15,051,716 |
|
|
$ | 20,232,097 |
|
|
$ | (5,180,381 |
) |
|
|
-26 |
% |
Real Estate Brokerage Services (Residential)
Residential real estate services sales revenue decreased by approximately $5.1 million, or 26%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decrease was driven primarily by the sale of its interest in LR Kissimmee.
Franchising Services
Franchising services revenue decreased by approximately $9.6 thousand, or 31%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decrease is attributable the ending of certain franchise agreements.
Coaching Services
Coaching services revenue decreased by approximately $122.4 thousand, or 100%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a strategic shift from Coaching services to aid in onboarding of new Agents.
Property Management
Property management revenue decreased by approximately $6.8 thousand, or 7%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, as a result of a decrease in the number of properties under management.
Real Estate Brokerage Services (Commercial)
Real estate brokerage services (commercial) revenue increased by approximately $17.3 thousand, or 9%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, as a result of new leadership in the department and the condensing lead time it generally takes to generate a commercial real estate transaction.
Title Settlement and Insurance
Title settlement and insurance revenue decreased by approximately $4.9 thousand, or 6%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to loss of key management during the second quarter of 2026.
Six Months Ending June 30
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Real Estate Brokerage Services (Residential) |
|
$ | 27,701,164 |
|
|
$ | 33,980,226 |
|
|
$ | (6,279,062 |
) |
|
|
-18 |
% |
Franchising Services |
|
|
56,699 |
|
|
|
70,000 |
|
|
|
(13,301 |
) |
|
|
-19 |
% |
Coaching Services |
|
|
22,257 |
|
|
|
217,226 |
|
|
|
(194,969 |
) |
|
|
-90 |
% |
Property Management |
|
|
195,498 |
|
|
|
199,555 |
|
|
|
(4,057 |
) |
|
|
-2 |
% |
Real Estate Brokerage Services (Commercial) |
|
|
478,879 |
|
|
|
245,086 |
|
|
|
233,793 |
|
|
|
95 |
% |
Title Settlement and Insurance |
|
|
172,825 |
|
|
|
155,778 |
|
|
|
17,047 |
|
|
|
11 |
% |
Total Revenue |
|
$ | 28,627,322 |
|
|
$ | 34,867,871 |
|
|
$ | (6,240,549 |
) |
|
|
-18 |
% |
Real Estate Brokerage Services (Residential)
Residential real estate services sales revenue decreased by approximately $6.3 million, or 18%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease was driven primarily by the sale of its interest in LR Kissimmee.
Franchising Services
Franchising services revenue decreased by approximately $13.3 thousand, or 19%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease is attributable to reduction in franchising activities.
Coaching Services
Coaching services revenue decreased by approximately $195.0 thousand, or 90%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to a strategic shift from Coaching services to aid in onboarding of new Agents.
Property Management
Property management revenue decreased by approximately $4.1 thousand, or 2%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, as a result of less properties under management.
Real Estate Brokerage Services (Commercial)
Real estate brokerage services (commercial) revenue increased by approximately $233.8 thousand, or 95%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, as a result of new leadership in the department and the condensing lead time it generally takes to generate a commercial real estate transaction.
Title Settlement and Insurance
Title settlement and insurance revenue increased by approximately $17.0 thousand, or 11%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to company advertising of this service to its agents.
Gross Profit and Gross Margin
Three Months Ending June 30
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
|
% |
||||
Real Estate Brokerage Services (Residential) |
|
$ | 1,488,943 |
|
|
$ | 1,681,805 |
|
|
$ | (192,862 |
) |
|
|
-11 |
% |
Gross Margin |
|
|
10.2 |
% |
|
|
8.5 |
% |
|
|
|
|
|
|
|
|
Franchising Services |
|
$ | 21,575 |
|
|
$ | (82,146 |
) |
|
$ | 103,721 |
|
|
|
-126 |
% |
Gross Margin |
|
|
100.0 |
% |
|
|
-263.1 |
% |
|
|
|
|
|
|
|
|
Coaching Services |
|
$ | 44 |
|
|
$ | 39,689 |
|
|
$ | (39,645 |
) |
|
|
-100 |
% |
Gross Margin |
|
|
14.7 |
% |
|
|
32.3 |
% |
|
|
|
|
|
|
|
|
Property Management |
|
$ | 94,829 |
|
|
$ | 100,912 |
|
|
$ | (6,083 |
) |
|
|
-6 |
% |
Gross Margin |
|
|
100.0 |
% |
|
|
99.3 |
% |
|
|
|
|
|
|
|
|
Real Estate Brokerage Services (Commercial) |
|
$ | 53,817 |
|
|
$ | 33,394 |
|
|
$ | 20,423 |
|
|
|
61 |
% |
Gross Margin |
|
|
26.2 |
% |
|
|
17.8 |
% |
|
|
|
|
|
|
|
|
Title Settlement and Insurance |
|
$ | 72,234 |
|
|
$ | 78,574 |
|
|
$ | (6,340 |
) |
|
|
-8 |
% |
Gross Margin |
|
|
98.1 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
Total Gross Profit |
|
$ | 1,731,442 |
|
|
$ | 1,852,228 |
|
|
$ | (120,786 |
) |
|
|
-7 |
% |
Total Gross Margin |
|
|
11.5 |
% |
|
|
9.2 |
% |
|
|
|
|
|
|
|
|
Real Estate Brokerage Services (Residential)
Gross margin related to residential real estate brokerage services decreased by approximately $0.2 million, or 11%%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decrease was driven by the disposition of LR Kissimmee offset by fee increases enacted on January 1, 2026, which improved gross margins.
Franchising Services
Gross margin for franchising services increased by approximately $103.7 thousand, or 126%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, related to the reduction of active franchises.
Coaching Services
Gross margin related to coaching services decreased by approximately $39.6 thousand, or 100%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The decrease is related to a strategic shift from requiring agents to utilize coaching services from the coaching program.
Property Management
Gross margin related to property management services decreased by approximately $6.1 thousand, or 6%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase in property management costs was primarily related to cost reduction strategies.
Real Estate Brokerage Services (Commercial)
Real estate brokerage services (commercial) revenue increased by approximately $20.4 thousand, or 61%, in the six months ended June 30, 2026 as compared to the three months ended June 30, 2025, as a result of new leadership in the department and the condensing lead time it generally takes to generate a commercial real estate transaction.
Title Settlement and Insurance
Gross margin related to title and settlement services decreased by approximately $6.3 thousand, or 8%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Primarily due to loss of key management during the second quarter of 2026.
Six Months Ending June 30
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
|
% |
||||
Real Estate Brokerage Services (Residential) |
|
$ | 3,174,380 |
|
|
$ | 3,056,199 |
|
|
$ | 118,181 |
|
|
|
4 |
% |
Gross Margin |
|
11.5 |
% |
|
|
9.0 |
% |
|
|
|
|
|
|
|
|
|
Franchising Services |
|
$ | 56,441 |
|
|
$ | (155,159 |
) |
|
$ | 211,600 |
|
|
|
-136 |
% |
Gross Margin |
|
99.5 |
% |
|
|
-221.7 |
% |
|
|
|
|
|
|
|
|
|
Coaching Services |
|
$ | 14,802 |
|
|
$ | 78,343 |
|
|
$ | (63,541 |
) |
|
|
-81 |
% |
Gross Margin |
|
66.5 |
% |
|
|
36.1 |
% |
|
|
|
|
|
|
|
|
|
Property Management |
|
$ | 195,498 |
|
|
$ | 198,305 |
|
|
$ | (2,807 |
) |
|
|
-1 |
% |
Gross Margin |
|
100.0 |
% |
|
|
99.4 |
% |
|
|
|
|
|
|
|
|
|
Real Estate Brokerage Services (Commercial) |
|
$ | 112,359 |
|
|
$ | 56,430 |
|
|
$ | 55,929 |
|
|
|
99 |
% |
Gross Margin |
|
23.5 |
% |
|
|
23.0 |
% |
|
|
|
|
|
|
|
|
|
Title Settlement and Insurance |
|
$ | 171,389 |
|
|
$ | 155,778 |
|
|
$ | 15,611 |
|
|
|
10 |
% |
Gross Margin |
|
99.2 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
Total Gross Profit |
|
$ | 3,724,869 |
|
|
$ | 3,389,896 |
|
|
$ | 334,973 |
|
|
|
10 |
% |
Total Gross Margin |
|
13.0 |
% |
|
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
Real Estate Brokerage Services (Residential)
Gross margin related to residential real estate brokerage services increased by approximately $0.1 million, or 4%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was driven by fee increases enacted on January 1, 2026, which improved gross margins.
Franchising Services
Gross margin for franchising services increased by approximately $211.6 thousand, or 136%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, related to prior year adjustments in this category.
Coaching Services
Gross margin related to coaching services decreased by approximately $63.5 thousand, or 81%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease is related to a strategic shift from requiring agents to utilize coaching services from the coaching program.
Property Management
Gross margin related to property management services decreased by approximately $2.8 thousand, or 1%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease in property management costs was primarily related to cost reduction strategies.
Real Estate Brokerage Services (Commercial)
Real estate brokerage services (commercial) revenue increased by approximately $55.9 thousand, or 99%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, as a result of new leadership in the department and the condensing lead time it generally takes to generate a commercial real estate transaction.
Title Settlement and Insurance
Gross margin related to title and settlement services increased by approximately $15.6 thousand, or 10%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. related to new management who is working to reduce related cost of sales.
Selling, General and Administrative Expense
Three Months Ending June 30
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Sales and Marketing |
|
$ | 187,947 |
|
|
$ | 606,298 |
|
|
$ | (418,351) |
|
|
|
-69 |
% |
Payroll and benefits |
|
|
1,046,196 |
|
|
|
1,486,726 |
|
|
|
(440,530) |
|
|
|
-30 |
% |
Rent and other |
|
|
629,037 |
|
|
|
382,934 |
|
|
|
246,103 |
|
|
|
64 |
% |
Professional fees |
|
|
823,913 |
|
|
|
647,076 |
|
|
|
176,837 |
|
|
|
27 |
% |
Office |
|
|
70,744 |
|
|
|
102,237 |
|
|
|
(31,493) |
|
|
|
-31 |
% |
Technology |
|
|
143,523 |
|
|
|
160,335 |
|
|
|
(16,812) |
|
|
|
-10 |
% |
Insurance, training and other |
|
|
172,083 |
|
|
|
130,957 |
|
|
|
41,126 |
|
|
|
31 |
% |
Public company costs |
|
|
150,119 |
|
|
|
102,822 |
|
|
|
47,297 |
|
|
|
46 |
% |
Amortization and depreciation |
|
|
104,879 |
|
|
|
187,966 |
|
|
|
(83,087) |
|
|
|
-44 |
% |
Total SG&A Expenses |
|
$ | 3,328,441 |
|
|
$ | 3,807,351 |
|
|
$ | (478,910) |
|
|
|
-13 |
% |
Selling, general and administrative costs decreased by approximately $478.9 thousand , or 13%, in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Of this decrease $440 thousand is related to payroll due to reduction in salaries for executives and reduction in benefits for the quarter, $418 thousand for sales and marketing, partially offset by a $246 thousand increase in rent and a $177 increase in professional fees, in general due to cost cutting strategies implemented by management.
Six Months Ending June 30
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
Sales and Marketing |
|
$ | 597,224 |
|
|
$ | 1,169,447 |
|
|
$ | (572,223 |
) |
|
|
-49 |
% |
Payroll and benefits |
|
|
2,301,704 |
|
|
|
3,017,518 |
|
|
|
(715,814 |
) |
|
|
-24 |
% |
Rent and other |
|
|
1,069,590 |
|
|
|
764,624 |
|
|
|
304,966 |
|
|
|
40 |
% |
Professional fees |
|
|
2,393,414 |
|
|
|
1,650,421 |
|
|
|
742,993 |
|
|
|
45 |
% |
Office |
|
|
146,514 |
|
|
|
180,683 |
|
|
|
(34,169 |
) |
|
|
-19 |
% |
Technology |
|
|
307,325 |
|
|
|
277,779 |
|
|
|
29,546 |
|
|
|
11 |
% |
Insurance, training and other |
|
|
351,901 |
|
|
|
298,786 |
|
|
|
53,115 |
|
|
|
18 |
% |
Public company costs |
|
|
331,942 |
|
|
|
320,755 |
|
|
|
11,187 |
|
|
|
3 |
% |
Amortization and deprecation |
|
|
209,758 |
|
|
|
418,012 |
|
|
|
(208,254 |
) |
|
|
-50 |
% |
Total SG&A Expenses |
|
$ | 7,709,372 |
|
|
$ | 8,098,025 |
|
|
$ | (388,653 |
) |
|
|
-5 |
% |
Selling, general and administrative costs decreased by approximately $388.7 thousand, or 5%, in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Of this decrease, $716 thousand is related to payroll costs related to executive salary and benefit reductions, $572 thousand to sales and marketing expenses partially offset by $743 increase in professional fees related to issuance cost for the Convertible Note 2026 and $305 thousand increase in rent and other which includes the increase in the allowance for credit losses due to aged receivables.
Stock-based compensation
Stock-based compensation decreased by approximately $435 thousand in the three months ended June 30, 2026, primarily due to no new options or grants of restricted stock units in the current year.
Stock-based compensation decreased by approximately $2.2 million in the six months ended June 30, 2026, primarily due to to no new options or grants of restricted stock units in the current year.
Other Income (Expense), Net
Other expense, net for the three months ended June 30, 2026, decreased approximately $81.4 million compared to other expense, net, for the three months ended June 30, 2025. The decrease in expense in 2026 was primarily due to reduction in loss of on issuance of senior secured convertible notes and change on fair value of convertible notes and warrants.
Other expense, net for the six months ended June 30, 2026, decreased approximately $1.3 million compared to other expense, net, for the six months ended June 30, 2025. The decrease in expense in 2026 was primarily due to reduction in loss of on issuance of senior secured convertible notes and offset by change on fair value of convertible notes and warrants and gain on settlement of incremental warrants.
Liquidity and Capital Resources - Going Concern and Management’ s Plans
On June 30, 2026, the Company had a cash balance of $2.3 million and working capital of $4.3 million.
On November 12, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, and the Investors agreed to purchase, in multiple closings, a new series of senior secured convertible notes of the Company in an aggregate original principal amount of up to $250,000,000 (the “Notes”), subject to the satisfaction or waiver of certain closing conditions. The Company issued an initial Note in an aggregate principal amount of $11,000,000 at the initial closing on January 8, 2026 (the “Initial Closing”) after the satisfaction or waiver of certain closing conditions.
Subject to certain conditions described in the Purchase Agreement, the Company has the option to request that the Investor purchase additional Notes (the “Company’s Option Closing”), and the Investor has the option to cause the Company to sell additional Notes (the “Investor’s Option Closing” and together with the Company’s Option Closing, (the “Additional Closings”) and together with the Initial Closing, each a “Closing”), provided that the aggregate original principal amount of any Notes issued in each Additional Closing shall not exceed $5,000,000 individually, and not more than $239,000,000 in the aggregate for all Additional Closings. The purchase price for each Note will be $900 for each $1,000 of principal amount of Note.
In addition, the Company has financing arrangements through its equity line of credit which allows the Company to sell shares of which 40% of the proceeds are available to the Company. The Company also, has secured financings through preferred share issuances which in general are funded for $1,000 per share and are subject to certain conversion rights into common stock. As of June 30, 2026, the Company received $580,000 in proceeds from the issuance of Series C and D financings net of issuance cost.
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 cost related to financing and the corporate overhead 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 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 organic growth, which will help achieve future profitability, and the Company will continue to raise capital from outside investors, as it has done in the past, to fund operating losses. There can be no assurance the Company can successfully raise the capital needed.
Summary of Cash Flows
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net Cash Used in Operating Activities |
|
$ | (2,660,669 |
) |
|
$ | (4,883,024 |
) |
Net Cash Used in Investing Activities |
|
$ | (10,722,698 |
) |
|
$ | — |
|
Net Cash Provided by Financing Activities |
|
$ | 13,154,483 |
|
|
$ | 8,363,477 |
|
Cash Flows from Operating Activities
During the six months ended June 30, 2026, operating activities consumed 2.7 million of our cash on hand, which was primarily attributable to loss from continuing operations of $3.1 million, excluding stock-based compensation, loss on issuance of senior secured convertible notes, fair market value adjustments, and amortization and depreciation. Changes in operating assets and liabilities provided $475 thousand, mostly due to increases in accounts receivable, notes receivable offset by increases in accounts payable and changes in security deposit and escrow payables.
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.
Cash Flows from Investing Activities
During the six months ended June 30, 2026 there was 10.7 million used in investing activities as a result of the purchase $10.3 million in digital assets and $411 thousand of cash sold in connection with the disposal of LR Kissimmee.
During the six months ended June 30, 2025 there were no investing activities.
Cash Flows from Financing Activities
During the six months ended June 30, 2026, we received net cash provided by financing activities of 13.2 million, which primarily included net proceeds from notes payable of $9.9 million and proceeds from issuance of common stock of $4.8 million, offset by $1.9 million in redemption of our Series X Super Voting Convertible Preferred Stock.
During the six months ended June 30, 2025, we received net cash provided by financing activities of $8.4 million, which primarily 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.
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, 2026, 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 were ineffective due to the material weaknesses in internal control over financial reporting described below.
Changes in Internal Control over Financial Reporting
As reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, material weaknesses were identified in the Company’s internal control over financial reporting. 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. Such material weaknesses are primarily related to deficiencies in its overall control environment, including limited accounting resources, inadequate segregation of duties, and the absence of formalized policies and procedures. In addition, the Company did not maintain effective controls over (i) significant accounting estimates and judgments, including the goodwill impairment assessment and the income tax provision prepared by external consultants, (ii) revenue recognition, including the determination of gross versus net presentation under ASC 606, which resulted in errors in previously issued financial statements and the restatement of the Company’s consolidated financial statements, (iii) the preparation, review, and approval of its periodic SEC filings to ensure the completeness, accuracy, and consistency of financial disclosures, and (iv) controls and processes related to cybersecurity risk management. We have therefore concluded that our internal controls over financial reporting are not effective at the reasonable assurance level.
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, 2026.
Remediation Plan
The Company is in the process of designing and implementing remediation measures, including enhanced review procedures, hiring additional personnel with technical accounting expertise and SEC reporting expertise, formalizing documentation standards, and strengthening oversight of third-party services providers and specialists. During the quarter ended June 30, 2026, we engaged additional consultants to assist with this plan.
Other than the remediation activities described above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(d) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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. Original mediation was scheduled for August 25, 2025, with a second mediation set for April 28, 2026. Discovery is proceeding and the trial is set for October 2026. The Company denies the merits of the claims and intends to vigorously defend the litigation.
On March 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit 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 in the amount of $100,000 from the Company. The Company strongly opposed and denied these claims. Original partial mediation occurred on September 5, 2025. A second mediation is expected to be set in the near future. The case trial is scheduled for April 2027. The Company denies the merits of the claims and intends to vigorously defend 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. In March of 2026 discovery and depositions began. The case remains pending.
On January 13, 2026, Martin Scott CFO Consulting Services, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach of contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and is owed unpaid fees of approximately $29,000 and legal expenses. The Company settled this lawsuit on April 20, 2026 for the amount of $22,000.
On January 30, 2026, the Company and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa in the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando LLC, action for conversion against Reinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4, 2026 as previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2026.
On February 1, 2026, Stacy-Ann Blair and Delroxry Blair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that La Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest. The plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages of approximately $9,600. The Company filed a motion to dismiss, which was further amended. A case management conference was held in July of 2026 at which time the case was dismissed.
We are currently listed on The Nasdaq Capital Market. Our failure to maintain our compliance with Nasdaq’s continued listing standards or other requirements could result in our Common Stock being delisted from Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our Common Stock and decrease or eliminate your investment.
Our Common Stock is currently listed on the Nasdaq Capital Market on Nasdaq under the symbol “LRHC.” Nasdaq requires listed issuers to comply with certain standards in order to remain listed on its exchange. If, for any reason, Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders.
If we violate Nasdaq’s listing requirements, or if we fail to meet any of Nasdaq’s listing standards, our Common Stock may be delisted. A delisting of our Common Stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Common Stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Common Stock. The delisting of our Common Stock could significantly impair our ability to raise capital and the value of your shares.
On August 20, 2026, the closing price of our Common Stock was $0.5636 . Pursuant to Nasdaq Rule 5810(c)(3)(A)(iii), if the closing price of our Common Stock is $0.10 or less for 10 consecutive trading days, we will be issued a Staff Delisting Determination by Nasdaq. If we receive a Staff Delisting Determination Letter resulting from our Common Stock trading at or below $0.10 for 10 consecutive trading days, we will have 7 calendar days to request a hearing before a Nasdaq hearings panel to review the Staff Delisting Determination, which will determine the delisting of our Common Stock by Nasdaq. A hearing would then take place within 45 days of the hearing request to determine whether or not our Common Stock would be delisted. If, in the future, we receive a Staff Delisting Determination there can be no assurance that we would be successful in preventing a determination by the Nasdaq hearing panel that our stock will be delisted.
On June 10, 2026, we received a letter from the Staff indicating that, because our stockholders’ equity as reported in its Form 10-K for the fiscal year ended December 31, 2025 was $(1,848,252), we are 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. On July 27, 2026, we submitted to Nasdaq a plan of compliance addressing how we intend to regain compliance with the Nasdaq Listing Rule 5550(b)(1). If the plan is accepted, we can be granted up to 180 calendar days from the date of the letter (or until December 7, 2026) to evidence compliance.
On August 21, 2026, the Company received a notice from the Staff that the Company was 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 period ended June 30, 2026 with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until October 20, 2026, to submit a plan to regain compliance, and if the Staff accepts such plan, it may grant an exception of up to 180 calendar days from the filing due date, or until February 16, 2027, to regain compliance.
There can be no assurance that we will be able to regain or maintain compliance with all applicable continued listing requirements or that Nasdaq will be accept our plan of compliance.
Any delisting determination by Nasdaq could seriously decrease or eliminate the value of an investment in our Common Stock and other securities linked to our Common Stock. While a listing on an over-the-counter exchange could maintain some degree of a market in our Common Stock, we could face substantial material adverse consequences, including, but not limited to, the following: limited availability for market quotations for our Common Stock; reduced liquidity with respect to and decreased trading prices of our Common Stock; a determination that shares of our Common Stock are “penny stock” under the Securities and Exchange Commission rules, subjecting brokers trading our Common Stock to more stringent rules on disclosure and the class of investors to which the broker may sell the Common Stock; limited news and analyst coverage for our Company, in part due to the “penny stock” rules; decreased ability to issue additional securities or obtain additional financing in the future; and potential breaches under or terminations of our agreements with current or prospective large stockholders, strategic investors and banks. The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our Common Stock.
Additionally, on July 22, 2026, the SEC approved a new Nasdaq continued listing requirement applicable to companies listed on the Nasdaq Stock Market that would require listed companies to maintain a minimum MVLS of at least $5.0 million. Under the approved rule, if a company's MVLS remains below $5.0 million for 30 consecutive business days, Nasdaq will issue a Staff Delisting Determination and immediately suspend trading in the company's securities and commence delisting proceedings. Unlike many other Nasdaq continued listing standards, the rule does not provide a compliance or cure period before a delisting determination is issued. Although a company may appeal a delisting determination, the appeal generally does not stay the suspension of trading, and the company's securities would generally trade on an over-the-counter market during the appeals process. In addition, any exception that may be granted by a Nasdaq Hearings Panel is very limited. However, on July 29, 2026, the SEC notified Nasdaq that it had received notices of intention to petition for review of the approval order and, pursuant to Rule 431(e) of the SEC's Rules of Practice, the effectiveness of the approval order was automatically stayed pending further review by the SEC. As a result, the ultimate implementation, timing and scope of the MVLS requirement remain uncertain.
As of the date of this report, our MVLS is below $5 million. Accordingly, if the stay is lifted, the rule becomes effective, and we are unable to satisfy the MVLS requirement, our securities would become subject to suspension and delisting from Nasdaq. Such a suspension or delisting could materially reduce the liquidity and market price of our Common Stock, impair our ability to raise capital, reduce analyst coverage, and adversely affect our business and the value of an investment in our securities.
We are subject to risks related to concentration of significant portion of our assets in digital form, stablecoin exposure as well as risks associated with the custodian's operational performance, security controls, financial condition, and ability to safeguard and facilitate access to our assets.
A significant portion of our assets consists of digital assets, primarily frxUSD, which are subject to unique risks that could adversely affect our financial condition, liquidity, and results of operations.
As of June 30, 2026, a substantial portion of our assets consisted of restricted digital assets held pursuant to our financing arrangements. Our digital asset holdings are highly concentrated in frxUSD, a stablecoin whose value, liquidity, and utility depend on the continued operation, financial condition, governance, and market acceptance of the issuer and related protocol. Although frxUSD is designed to maintain a stable value, there can be no assurance that it will remain fully redeemable, maintain its intended peg, or continue to be widely accepted in the marketplace.
Any disruption affecting frxUSD, including a loss of confidence by market participants, reduced liquidity, redemption limitations, operational failures, cybersecurity incidents, governance disputes, regulatory actions, reserve-related concerns, or other adverse developments, could result in a decline in the value or marketability of our digital assets. If frxUSD were to experience a significant de-pegging event or become subject to restrictions on transfer or redemption, we could incur losses and our ability to access liquidity could be materially adversely affected.
In addition, our digital assets are held with a single third-party custodian and are subject to contractual restrictions under our financing arrangements. As a result, we are exposed to risks associated with the custodian's operational performance, security controls, financial condition, and ability to safeguard and facilitate access to our assets. Any failure, interruption, insolvency, cyberattack, fraud, or other adverse event affecting the custodian could impair our ability to access, transfer, liquidate, or realize value from these assets in a timely manner, or at all.
The regulatory environment applicable to stablecoins and other digital assets remains uncertain and continues to evolve. Future legislative, regulatory, enforcement, accounting, tax, or other governmental actions could adversely affect the issuance, custody, transferability, liquidity, valuation, or use of frxUSD and other digital assets. Any such developments could reduce the value of our digital assets, limit our ability to utilize them in our operations or financing arrangements, and adversely affect our business, financial condition, and results of operations.
Because our digital asset holdings represent a significant concentration of assets, any adverse development affecting frxUSD, the related protocol, the custodian, or the broader digital asset market could have a disproportionate impact on our liquidity, financial condition, and results of operations.
Except as disclosed above in this Section “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, 2025 filed with the SEC on June 4, 2026 and our Quarterly Report on Form 10-Q for the period ended March 31, 2026 filed with the SEC on July 31, 2026.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Other than the issuances of unregistered securities described in the Current Reports on Form 8-K filed by the Company with the SEC, the Company did not issue any unregistered securities during the second quarter of 2026.
(b) Not applicable.
(c) None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
During the six months ended June 30, 2026, director or officer adopted, modified or terminated any Rule - trading arrangement or non-Rule -1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
(a) Exhibits. The following documents are filed as part of this report:
Exhibit No.: |
|
Description: |
2.1 |
|
|
|
|
|
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.3 |
|
|
|
|
|
3.4 |
|
|
|
|
|
3.5 |
|
|
|
|
|
|
3.6
|
|
|
|
|
|
3.7 |
|
|
|
|
|
3.8 |
|
|
|
|
|
3.9 |
|
|
|
|
|
3.10 |
|
|
|
|
|
3.11 |
|
|
|
|
|
3.12 |
|
|
|
|
|
3.13 |
|
|
|
|
|
3.14 |
|
|
|
|
|
3.15 |
|
|
|
|
|
3.16 |
|
|
|
|
|
3.17 |
|
|
|
|
|
4.1 |
|
|
|
|
|
10.1# |
|
10.2# |
|
|
|
|
|
10.3# |
|
|
|
|
|
10.4 |
|
10.17 |
|
|
|
|
|
10.18 |
|
|
|
|
|
10.19 |
|
|
|
|
|
10.20 |
|
|
|
|
|
10.21 |
|
|
|
|
|
10.22 |
|
|
|
|
|
31.1* |
|
|
|
|
|
31.2* |
|
|
|
|
|
32.1** |
|
|
|
|
|
32.2** |
|
|
|
|
|
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. |
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 21, 2026 |
By: |
/s/ Joseph La Rosa |
|
Name: |
Joseph La Rosa |
|
Title: |
Founder, Chief Executive Officer, and Director |
|
|
(Principal Executive Officer) |
Date: August 21, 2026 |
By: |
/s/ Joseph La Rosa |
|
Name: |
Joseph La Rosa |
|
Title: |
Interim Chief Financial Officer |
|
|
(Principal Financial Officer) |
51
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph La Rosa, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of La Rosa Holdings Corp. for the period ended June 30, 2026; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions: |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 21, 2026
|
| /s/ Joseph La Rosa |
| Name: | Joseph La Rosa |
| Title: | Chief Executive Officer and President |
|
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph La Rosa, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of La Rosa Holdings Corp. for the period ended June 30, 2026; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 21, 2026
|
| /s/ Joseph La Rosa |
| Name: | Joseph La Rosa |
| Title: | Interim Chief Financial Officer |
|
| (Principal Financial Officer) |
Exhibit 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
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Joseph La Rosa, the Chief Executive Officer and President of La Rosa Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended June 30, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 21, 2026
|
| /s/ Joseph La Rosa |
| Name: | Joseph La Rosa |
| Title: | Chief Executive Officer and President |
|
| (Principal Executive Officer) |
Exhibit 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
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Joseph La Rosa, the Interim Chief Financial Officer of La Rosa Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the period ended June 30, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 21, 2026
|
| /s/ Joseph La Rosa |
| Name: | Joseph La Rosa |
| Title: | Interim Chief Financial Officer |
|
| (Principal Financial Officer) |