La Rosa Holdings Corp
For the period ended Dec 31, 2023. Filed Apr 16, 2024.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2023 · Filed Apr 16, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D.C.20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
**For the Fiscal Year Ended December 31,2023 **
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ until ______
Commission File Number:001-41588
LA ROSA HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
| Nevada | 87-1641189 |
|---|---|
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
| 1420 Celebration Blvd., 2nd floor Celebration, Florida | 34747 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code(321) 250-1799
Securities registered under Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: |
|---|---|---|
| Common Stock | LRHC | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
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 past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit post such files).
Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
|---|---|---|---|
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ | ||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The registrant was not a public company as of the last business day of its most recently completed second fiscal quarter and, therefore, cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.
As of April 16, 2024, the Registrant had 14,302,716 shares of common stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
| PAGE | |
|---|---|
| PART I | 1 |
| Item 1. Business | 1 |
| Item 1A. Risk Factors | 13 |
| Item 1B. Unresolved Staff Comments | 32 |
| Item 1C. Cybersecurity | 32 |
| Item 2. Properties | 33 |
| Item 3. Legal Proceedings | 33 |
| Item 4. Mine Safety Disclosures | 33 |
| PART II | 34 |
| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 34 |
| Item 6. [Reserved] | 36 |
| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36 |
| Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 45 |
| Item 8. Financial Statements and Supplementary Data | F-1 |
| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 46 |
| Item 9A. Controls and Procedures | 46 |
| Item 9B. Other Information | 46 |
| Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 46 |
| PART III | 47 |
| Item 10. Directors, Executive Officers, and Corporate Governance | 47 |
| Item 11. Executive Compensation. | 55 |
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 62 |
| Item 13. Certain Relationships and Related Transactions, and Director Independence | 63 |
| Item 14. Principal Accountant Fees and Services | 65 |
| PART IV | 66 |
| Item 15. Exhibits and Financial Statement Schedules | 66 |
| SIGNATURES | 76 |
In this Annual Report on Form 10-K, unless otherwise stated or as the context otherwise requires, references to “La Rosa Holdings Corp.,” the “Company,” the “Issuer,” the “Registrant,” the “LRHC,” “we,” “us,” “our” and similar references refer to La Rosa Holdings Corp., a Nevada corporation. Our logo and other trademarks or service marks of the Company appearing in this Annual Report on Form 10-K are the property of La Rosa Holdings Corp. This Annual Report on Form 10-K also contains registered marks, trademarks, and trade names of other companies. All other trademarks, registered marks, and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders.
i
Cautionary Note Regarding Forward-Looking Statements and Industry Data
This Annual Report on Form 10-K, in particular, Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains certain “forward-looking statements” within the meaning of 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”). These forward-looking statements represent our expectations, beliefs, intentions, or strategies concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; and the economy in general or the future of the industry in which we operate, all of which were subject to various risks and uncertainties.
When used in this Annual Report on Form 10-K and other reports, statements, and information we have filed with the Securities and Exchange Commission (“SEC”), in our press releases, presentations to securities analysts or investors, in oral statements made by or with the approval of an executive officer, the words or phrases “believes,” “may,” “will,” “expects,” “should,” “continue,” “anticipates,” “intends,” “will likely result,” “estimates,” “projects” or similar expressions and variations thereof are intended to identify such forward-looking statements. However, any statements contained in this Annual Report on Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. These statements are only predictions. All forward-looking statements included in this Annual Report on Form 10-K are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Any or all of our forward-looking statements in this document may turn out to be wrong. Actual events or results may differ materially. Our forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks, uncertainties, and other factors.
This Annual Report on Form 10-K also contains estimates, projections, and other information concerning our industry, our business, and particular markets, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, general publications, government data, and similar sources.
ii
SUMMARY** OF RISK **FACTORS
The following is a summary of the principal risks described below in Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K.
Risks Related to Our Business and Operations
| ● | Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” |
| ● | We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow down due to the recent antitrust litigation and as our business matures. |
| ● | Impairment of goodwill and intangible assets may adversely impact future results of operations. |
| ● | We may not realize the expected benefits of our recent acquisitions because of integration difficulties and other challenges. |
| ● | If we fail to raise additional capital, our ability to implement our business model and strategy could be compromised. |
| ● | The residential real estate market is cyclical, and we can be negatively impacted by downturns in this market and by general economic conditions. |
| ● | The lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms has had a material adverse effect on our financial performance and results of operations. |
| ● | The housing market is currently in flux with higher mortgage interest rates and generally increasing home prices which makes it difficult to predict future market trends. Any decrease in home sales in the future will have an adverse effect on our financial performance and results of operations. |
| ● | We may fail to successfully execute our strategies to grow our business, including increasing our agent count, expanding the number of our franchisees and agents, or we may fail to manage our growth effectively, which could have a material adverse effect on our brand, our financial performance and results of operations. |
| ● | We might not be able to attract and retain additional qualified agents and other personnel. |
| ● | Our financial results are affected directly by the operating results of franchisees and agents, over whom we do not have direct control. |
| ● | We are dependent upon the truthfulness of our franchisees to provide accurate reports and accounting to us. |
| ● | We depend substantially on our Founder, Joseph La Rosa, and the loss of any our senior management or other key employees or the inability to hire additional qualified personnel could adversely affect our operations, our brand and our financial performance. |
| ● | Concentration of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. |
iii
| ● | Mr. La Rosa will control all matters that come before the stockholders for a vote and thus we are a “controlled company” within the meaning of the Nasdaq listing requirements and, as a result, the Company will qualify for exemptions from certain corporate governance requirements. If we take advantage of such exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements. |
| ● | We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition. |
| ● | 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. |
| ● | If we attempt to, or acquire other complementary businesses, we will face certain risks inherent with such activities. |
Risks Associated with Our Capital Stock
| ● | We may not be able to maintain the listing of our Common Stock on Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our Common Stock and decrease or eliminate your investment. |
| ● | 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. |
| ● | If our securities become subject to the penny stock rules, it would become more difficult to trade our shares. |
| ● | We may have violated Section 13(k) of the Exchange Act (implementing Section 402 of the Sarbanes-Oxley Act of 2002) and may be subject to sanctions as a result. |
| ● | Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it. |
| ● | If we continue to fail to maintain an effective system of disclosure controls and fail to maintain an effective system of internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. |
General Risks
| ● | If we fail to protect the privacy of employees, independent contractors, or consumers or personal information that they share with us, our reputation and business could be significantly harmed. |
| ● | Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business. |
| ● | Anti-takeover provisions in our amended and restated articles of incorporation and bylaws, as well as provisions in Nevada law, might discourage, delay or prevent a change of control of our Company or changes in our management and, therefore, depress the trading price of our Securities. |
We discuss these and other risks and uncertainties in the Item “1A.Risk Factors” of this Annual Report on the Form 10-K.
iv
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.