La Rosa Holdings Corp.

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

Basis of Presentation and Consolidation

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

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

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

Reclassifications of Prior Year Presentation

During the preparation of the financial statements for the quarter ended September 30, 2025, the Company reclassified certain restricted cash balances at December 31, 2024 related to tenant deposits and escrow payable that had associated restrictions and obligations that extended beyond twelve months to restricted cash, net of current. Further, the Company reclassified certain non-current security deposits and escrow payable at December 31, 2024 to current security deposits and escrow payable. These reclassification were made to conform with current period presentation and have not changed the results of operations of prior periods nor affected the cash flows previously reported.

Stock Split

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

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

Accounts Receivable and Allowance for Credit Losses

The Company’s trade accounts receivable consist of balances due from agents, tenants, franchisees, and commissions for closings and are presented on the consolidated balance sheets net of the allowance for credit losses. Management determines the allowance for expected credit losses based upon historical experiences as well as current conditions that affect the collectability of the reported amount and regularly evaluates individual customer receivables and considering financial condition, credit history, current economic conditions and other relevant factors, in setting specific reserves for certain accounts. Receivables are written off once they are deemed uncollectible, which may arise when the debtor is deemed unable to pay the amounts owed to the Company. The allowance for credit losses was $150,336 and $166,504 as of September 30, 2025 and December 31, 2024, respectively. Estimates of uncollectible accounts receivable are recorded to general and administrative expense.

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

Liquidity – Going Concern and Management’s Plans

On September 30, 2025, the Company had a cash balance of $3,992,896 and positive working capital of $1,243,565.

On February 4, 2025 (the “Closing Date”), the Company entered into a Securities Purchase Agreement (the “SPA”), with an institutional investor (the “Investor”) in which the Company obtained gross proceeds of $4,963,750, which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of $3,408,585. SeeNote 5 – Borrowingsfor further discussion.

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

The Company has incurred recurring net losses, and the Company’s operations have not provided net-positive cash flows. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company plans on continuing to expand via acquisitions, which will help achieve future profitability. Additionally, the Company has plans to raise capital from outside investors, as it has done in the past, to fund operating losses and to provide capital for further business acquisitions. There can be no assurance the Company can successfully raise the capital needed.

Fair Value Option of Accounting

The Company has elected the fair value option under Accounting Standards Codification 825-10,Financial Instruments (“ASC 825”), to measure its Senior Secured Convertible Note and Incremental Warrants (until the Incremental Warrants conversion to Series B Preferred Stock, SeeNote 5 – Borrowingsfor further discussion) issued during the first quarter. The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. When the fair value option is elected for an instrument, unrealized gains and losses for such instrument are reported in earnings at each subsequent reporting date. Upfront costs and fees related to items for which the fair value option is elected shall be recognized in earnings as incurred and not deferred.

Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities, including those with a single reportable segment, to: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the chief operating decision maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Accounting Standards Codification 280, Segment Reporting, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. ASU No. 2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments. The Company adopted ASU No. 2023-07 effective December 31, 2024.

Recently Issued Accounting Standards Not Yet Adopted

In 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: 1. Management has authorized and committed to funding the software project. 2. 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 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 will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods 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 May 2025, the FASB issued ASU 2025-03,*Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.*The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements. A Variable Interest Entity (VIE) is a legal entity in which an investor holds a controlling interest that is not based on majority voting rights.

In January 2025, the FASB issued ASU 2025-01,*Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)- Clarifying the Effective Date.*The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. This update aims to enhance the transparency and usefulness of income tax disclosures for investors. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid. Public business entities (PBEs) will be required to disclose a detailed effective tax rate reconciliation, while private companies may choose to present a qualitative disclosure instead of a quantitative reconciliation. The ASU introduces requirements for all entities to disclose income taxes paid to individual jurisdictions exceeding a specified threshold and updates disclosures about unrecognized tax benefits (UTB) and undistributed earnings by federal, state, and foreign jurisdictions. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. The Company plans to adopt this standard prospectively.

Note 2 — Business Combinations

The Company completed a number of acquisitions during the nine months ended September 30, 2024 and plans to acquire additional businesses in the future. The results of businesses acquired in a business combination are included in the Company’s condensed consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.

To date, the assets acquired and liabilities assumed in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with the determination of fair values, the Company engages independent appraisal firms to assist with the valuation of intangible assets acquired and certain assumed obligations.

Transaction costs associated with business combinations are expensed as incurred.

During the first nine months of 2024, the Company acquired majority ownership of the following franchisees of the Company: La Rosa Realty Georgia LLC (“Georgia”), La Rosa Realty California (“California”), La Rosa Realty Lakeland LLC (“Lakeland”), La Rosa Realty Success LLC (“Success”) and 100% ownership of La Rosa Realty Winter Garden LLC (“Winter Garden”), BF Prime LLC (“BF Prime”) and Nona Title Agency LLC (“Nona Title”). All seven franchises engage mostly in the residential real estate brokerage services to the public primarily through sales agents and also provide coaching and support services to agents on a fee basis.

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

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

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

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

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

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

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

Note 3 — Goodwill and Intangible Assets

Goodwill

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

Intangible Assets

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

The components of purchased intangible assets were as follows:

For the three months and nine months ended September 30, 2025, amortization expense was $167 thousand and $583 thousand respectively. For the three months and nine months ended September 30, 2024, amortization expense was $283 thousand and $721 thousand, respectively. The remaining estimated amortization expense is expected to be as follows:

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:

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

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

The Company determined that on December 31, 2024, certain instruments qualified as derivative liabilities and were recorded at fair value on the date of issuance and re-measured at fair value for each subsequent reporting period with the change reported in earnings. There were no derivative liabilities recorded as of September 30, 2025. SeeNote 7 – Equity Shares and Warrants for more information.

Securities Purchase Agreement

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

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

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

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

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

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

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

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

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

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

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

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

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

The following tables provide a summary of changes in fair value associated with the Level 3 liabilities for the nine months periods ended September 30, 2025 and 2024:

Derivative liabilities

Convertible Note

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

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 September 30, 2025, the Company has approximately $72 thousand of remaining performance obligations, all of which will be recognized into revenue by the end of the calendar year. The Company has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or less.

Note 5 — Borrowings

Line of Credit

The Company has a line of credit with Regions Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On September 30, 2025, the outstanding balance on the line of credit was $0 at a prime rate of 7.5% plus 4.75%, or 12.25%. On December 31, 2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75% plus 4.75%, or 12.50%. The line of credit is collateralized by Company assets. The interest expense incurred for the line of credit was $25 and $6,898 for the three months and nine months ended September 30, 2025, respectively and $377 and $743 for the three months and nine months ended September 30, 2024, respectively. No amount was drawn on the facility during the first nine months of 2024.

Security Purchase Agreement

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

The Initial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in arrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. The interest expense incurred for the Initial Note was $168,666 and $492,929, for the three months and nine months ended September 30, 2025, respectively.

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

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

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

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

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

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

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

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

Cash Advance Agreements

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

Notes Payable-Senior Secured Promissory Notes

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

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

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

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

The interest expense incurred for these senior secured promissory notes was $0 and $23,798 for the three months and nine months ended September 30, 2025, respectively. The interest expense incurred for the senior secured promissory notes was $90,281 and $181,203 for the three months and nine months ended September 30, 2024, respectively.

Notes Payable-Promissory Note

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

Acquisition Settlement Agreement

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

Economic Injury Disaster Loans

During 2024, the Company acquired franchises that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $147,100. The Company acquired the EIDL Loans which have terms similar to the Company’s existing EIDL loans. The EIDL Loans mature in 2050 and bear interest at a rate of 3.75% per annum. The interest expense incurred for the EIDL loans were $3,724 and $16,894 for the three months and nine months ended September 30, 2025 and $7,000 and $19,054 for September 30, 2024, respectively.

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

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

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 fromone tofive years. Renewal options are typically not recognized as part of the right-of-use assets and lease liabilities as it is not reasonably certain at the lease commencement date that the Company will exercise these options to extend the leases. Leases with an initial term of twelve-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term.

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

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

During July 2025, the Company renewed its lease of the corporate office space in Celebration, FL, which is owned by an entity controlled by our CEO. The Celebration lease requires monthly payments of $12,000. The Celebration lease is initially for a one-year term, with option for renewal.

During August 2025, the Company entered into a new lease for office space in Puerto Rico. The Puerto Rico lease requires monthly payments of $1,250. The Puerto Rico lease is initially for a five-year term, with no written option for renewal.

Lease costs for the three month periods ended September 30, 2025 and 2024 were $248,575 and $222,126, respectively, and lease costs for the nine month periods ended September 30, 2025 and 2024 were $728,593 and $642,996, respectively. Lease costs are included in general and administrative expenses in the condensed consolidated statements of operations.

Supplemental cash flow information related to leases is as follows:

Supplemental balance sheet information related to leases is as follows:

The Company’s leases do not provide a readily determinable implicit discount rate. The Company estimates its incremental borrowing rate as the discount rate based on the information available at lease commencement. The weighted average discount rate is 10.96%.

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

There were no leases with residual value guarantees.

Legal Proceedings

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

On February 13, 2023, Mr. Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000. On April 11, 2023, Company filed a motion to dismiss. Original mediation was scheduled for August 25, 2025 with a second mediation set for December 1, 2025. There have been no other changes as the attorneys work on discovery and negotiations with Plaintiff’s counsel. The Company denies the merits of the claims and intends on vigorously defending the litigation.

On January 3, 2024, Ms. Sarah Palmer filed a putative national class action complaint against La Rosa Realty, LLC in the United States District Court, Middle District of Florida, Orlando Division. Ms. Palmer alleges that she received two (2) brief pre-recorded calls one week apart to her cell phone from La Rosa Realty, LLC presenting her an employment opportunity as a real estate agent. Ms. Palmer seeks an undisclosed amount of monetary damages from La Rosa Realty, LLC for the alleged would-be injurious, isolated and opportunistic employment gestures to her through a purported nationwide class action. Ms. Palmer claims that the defendant violated her privacy, annoyed and harassed her, constituted a nuisance, and occupied her telephone line. On March 12, 2024, La Rosa Realty, LLC filed a motion to dismiss the case with prejudice. The action settled at mediation and was dismissed on May 20, 2025 without prejudice pending completion of the settlement terms.

On March 5, 2025, Joshua Epstein filed an action in Osceola County, Florida Circuit Court alleging claims for Breach of Contract, Promissory Estoppel, Conversion, Unjust Enrichment, Breach of Good Faith and Fair Dealings, Fraud in the Inducement, and to recover alleged unpaid compensation from the defendant, La Rosa Holdings Corp. Original partial mediation occurred on September 5, 2025, then was reset for December 2, 2025. The Company denies the merits of the claims and intends on vigorously defending the litigation.

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

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

Note 7 — Equity Shares and Warrants

July 2025 Warrant Exchange Agreements

During July 2025, the Company entered into two warrant exchange agreements (the “Exchange Agreements”) with two holders of previously issued equity-classified warrants to purchase shares of the Company’s Common Stock (one Exchange Agreement was entered into with the Company’s Chief Executive Officer. The terms of the Exchange Agreement provided each holder with 75,000 newly issued shares of the Company’s Common Stock, in exchange for the settlement and cancellation of their outstanding warrants. As of the dates of the Exchange Agreements, the outstanding warrants provided the holders with the right to purchase an aggregate of 3,703,704 shares of the Company’s Common Stock at a per share exercise price of $0.135.

Upon the respective settlement dates in July 2025, the Company measured the fair value of the newly issued shares of the Company’s Common Stock issued as consideration to be approximately $1.1 million. Just prior to their settlement and cancellation, the Company estimated the fair value of the Warrants to be approximately $28.0 million. The fair value of the Warrants prior to cancellation was estimated using the Black-Scholes valuation model with the following inputs: Company stock prices of $7.40 to $7.99; exercise prices of $0.135, remaining term to maturity of 2.3 to 2.4 years, risk-free rates of 3.9% and stock price volatility of 65.0%.

As the difference between the fair value of the Warrants settled ($28.0 million) and the fair value of the shares of Common Stock issued ($1.1 million) was favorable to the Company, no recognition of this change is required in the Company’s condensed consolidated financial statements.

Warrants are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s common stock at a fixed price. As of September 30, 2025, the Company’s stock price was $7.18.

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

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

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

Additional information with respect to warrant activity:

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

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

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

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

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

Note 8 — Stockholders’ Equity

Equity Purchase Facility Agreement

On August 4, 2025, the Company and an institutional investor (the “Investor”) entered into an Equity Purchase Facility Agreement (the “EPFA”), pursuant to which the Company has the right to issue and sell to the Investor up to $150 million (subsequently amended to $1 billion on September 18, 2025) in newly issued shares of the Company’s common stock (the “Commitment Amount”). The term of the facility provided under the EPFA expires on the earlier to occur of (i) the first day of the next month following the 36-month anniversary of the first trading date after the Agreement Date and (ii) the date on which the Investor shall have made payment of advances pursuant to the EPFA for common shares equal to the Commitment Amount; provided that the Company may terminate the EPFA effective upon five trading days’ prior written notice to the Investor (provided that there are no outstanding advance notices the common shares under which have yet to be issued).

On September 18, 2025, the Company and the Investor entered into the Amended and Restated Equity Purchase Facility Agreement in order to increase the Commitment Amount to $1 billion as described above. All other terms and provisions were substantially the same as the initial EPFA.

Under the terms of the EPFA, the Company has the right (but not the obligation) to request that the Investor purchase shares of the Company’s Common Stock, subject to certain conditions and limitations (an “Advance”). The purchase price of the shares to be sold under an Advance is 100% of the Market Price, which is generally defined as the lower of (i) the lowest price of the Common Stock traded during the relevant pricing period and (ii) the lowest daily (or hourly) VWAP during the relevant pricing period. In the event the bid price of the common stock is at or below $0.10 per share, the Investor will have the right to consent to any Advance. Any purchase under an Advance would be subject to certain limitations, including that the Investor shall not purchase any shares of Common Stock that would result in the Investor beneficially owning more than 4.99% of the outstanding common shares or voting power of the Company (the Investor can request to increase this limit to 9.99%). Additionally, any purchase under an Advance would also be subject to a 19.99% limit based on the outstanding shares of common stock at the issuance date, prior to the receipt of shareholder approval.

The EPFA was determined to represent a combination of a purchased put option on the Company’s common stock (prior to an Advance, the “EPFA Option”) as well a forward contract to deliver the Company’s common stock (after an Advance, but prior to delivery of the shares). The EPFA Option was determined to be a freestanding financial instrument which did not meet the criteria to be accounted for as a derivative instrument or to be recognized within equity. Pursuant to ASC 815Derivatives and Hedging(“ASC 815”), the Company will therefore recognize the EPFA Option as an asset or liability, measured at fair value at the date of issuance and at each reporting period, with changes in fair value recognized in earnings. The EPFA Option was determined to have a fair value of $0 on the date of issuance as well as September 30, 2025. In addition, as the EPFA Option did not meet the requirements for equity classification, the Company expensed the issuance costs incurred in association with the EPFA in the periods in which they were incurred.

Second Amended 2022 Plan

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

Reverse Split

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

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

Series B Preferred Stock

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

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

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

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

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

Voting

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

Conversion Rights

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

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

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

Redemption

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

Dividends

The Series B Preferred Stock bears no dividends.

Liquidation

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

Share Repurchase Program

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

Common Stock Issuances

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

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

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

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 3,750 and 2,500 shares of the Company’s common stock, respectively, for services rendered. The stock compensation expense for the nine months ended September 30, 2025, related to this transaction amounted to $122,570. There isno related compensation for the three months ended September 30, 2025.

On March 10, 2025, the Company issued 500 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation expense for the nine months ended September 30, 2025, related to this transaction amounted to $8,036. There isno related compensation for the three months ended September 30, 2025.

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

On April 21, 2025, the Company issued the CEO an aggregate of 41,217 unregistered shares of common stock of the Company, par value $0.0001 per share as compensation for the services rendered pursuant to his employment agreement with the Company. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $0 and $444,319.

On July 7, 2025, the Company issued 313 shares of common stock pursuant to a consulting agreement for services rendered. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $3,756.

On July 8, 2025, the Company issued the remaining amount of common stock of 331 shares, pursuant to the consulting agreement entered into on February 20, 2025. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $2,118.

On July 14, 2025, the Company entered into an exchange agreement with certain holder (the “Holder”) of a common stock purchase warrant to purchase 1,851,852 shares of common stock, at $0.135 per share, issued by the Company to the Holder on November 14, 2022. Pursuant to such exchange agreement, the Holder’s warrant was cancelled and in exchange, the Company issued an aggregate of 75,000 shares of common stock to the Holder. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $559,125.

On July 14, 2025, the Company entered into a consulting agreement pursuant to which the Company agreed to issue 50,000 shares of the Company’s common stock for services rendered. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $372,750.

On July 17, 2025, the Company entered into an exchange agreement with Joseph La Rosa, its Chief Executive Officer and holder of a common stock purchase warrant to purchase 1,851,852 shares of common stock, at $0.135 per share, issued by the Company to Mr. La Rosa on December 2, 2022. Pursuant to such exchange agreement, Mr. La Rosa’s warrant was cancelled and in exchange, the Company issued Mr. La Rosa an aggregate of 75,000 shares of common stock. The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $573,000.

On August 11, 2025, the Company issued its directors, officers, certain employees an aggregate 101,011 unregistered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $511,116.

On August 28, 2025, the Company issued 42,700 registered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The stock compensation expense for the three months and nine months ended September 30, 2025, related to this transaction amounted to $236,575.

On September 26, 2025, the Company issued 75,000 registered shares of common stock to Ross Carmel, as the designee of its legal counsel, Sichenzia Ross Ference Carmel LLP, in exchange for amounts payable for services rendered to the Company. The shares were issued to Mr. Carmel pursuant to Second Amended 2022 Plan. The value of this conversion transaction amounted to $502,875.

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

For the three months and nine months ended September 30, 2025, the Company utilized their ATM and sold a total of 75,000 and 386,999, respectively, shares of the Company’s common stock for gross proceeds of $864,505 and $7,781,297, respectively and net proceeds of $838,390 and $7,497,266, respectively.

For the three months and nine months ending September 30, 2025, the Company issued 1,215 and 3,141, respectively, shares of the Company’s common stock pursuant to the Restricted Stock Unit (RSU) vesting with a value of $53,035 and $122,516, respectively.

Stock Option Awards

For the three month and nine months periods ending September 30, 2025, the Company recorded stock-based compensation for employees’ and directors’ awards of $14,314 and $172,376, respectively. The Company did not realize any tax benefits associated with share-based compensation for these periods as the Company recorded a valuation allowance on all deferred tax assets.

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

Additional information with respect to stock option activity:

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

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

As of September 30, 2025, unrecognized compensation expense related to stock option awards totaled $119,556, to be expensed over the next 9.5 years. As of December 31, 2024, unrecognized compensation expense related to stock option awards totaled $92,892.

Restricted Stock Units

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

During the nine months period ending September 30, 2025, the Company issued 8,258 RSUs to agents as part of our agent incentive plan and 25 RSU’s to our CTO as part of his employment agreement.

For the three month periods ending September 30, 2025 and 2024, the Company recorded $48,952 and $7,426, respectively, of share-based compensation expense related to the RSUs. For the nine months periods ending September 30, 2025 and 2024, the Company recorded $119,905 and $12,940, respectively, of share-based compensation expense related to the RSUs. As of September 30, 2025, unrecognized compensation expense related to the awards was $263,835, to be expensed over the next 1.6 years. The Company did not realize any tax benefits associated with share-based compensation for the three month periods ending September 30, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.

Note 9 — 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 tables set forth common stock equivalents that have been excluded from the computation of dilutive weighted average shares outstanding as their inclusion would have been antidilutive:

Note 10 — Segments

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

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 nine months ended September 30, 2025 and 2024, respectively.

In addition to the expenses from these segments, corporate other expenses, net were $3,034,840 and $1,280,918, which resulted in the net loss of $5,544,578 and $2,392,628) for the three months ended September 30, 2025 and 2024, respectively. Corporate other expenses, net were $16,731,936 and $5,898,426, which resulted in the net loss of $22,780,359 and $9,323,839 for the nine months ended September 30, 2025 and 2024, respectively.

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

Note 11 — Subsequent Events

Equity Issuances

Subsequent to September 30, 2025, the Company issued an additional 414 shares from the vesting of RSU grants as part of the Company’s agent incentive plan.

On November 13, 2025, the holder of the Senior Secured Convertible Note, dated February 4, 2025, converted $600,000 of principal and $55,627 of interest by converting 223,464 shares of common stock.

On November 13, 2025, the Company utilized its EPFA selling 25,000 shares of common stock at $2.95 per share raising gross proceeds of $73,750.

On November 17, 2025, the holder of the Senior Secured Convertible Note, dated February 4, 2025, converted $208,261 of principal and $4,701 of interest by converting 103,703 shares of common stock.

On November 18, 2025, the holder of the Senior Secured Convertible Note, dated February 4, 2025, converted $91,739 of principal and $6,967 of interest by converting 48,065 shares of common stock.

Waiver of Interest Payments and Default

On November 7, 2025, the Company entered into a waiver agreement with the holder of the Company’s Senior Secured Convertible Note, dated February 4, 2025. Under this waiver, the Holder agreed to waive all default penalties, default interest, and any acceleration rights arising from the Company’s failure to make required cash interest payments due July 1, 2025 and October 1, 2025 on the note.

The waiver requires the Company to remit all unpaid cash interest no later than December 31, 2025, unless such note is fully converted before that date. Other than the specific waivers described above, all terms of the note, and other related transaction documents pursuant to which the note was issued remain unchanged. The waiver is effective as of July 1, 2025.

Securities Purchase Agreement

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 expects to issue an initial Note in an aggregate principal amount of $11,000,000 at the initial closing (the “Initial Closing”) upon 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.

The Notes will be convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.0001 per share (the “common stock”), at a conversion price equal to 120% of the lower of (i) Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) on the trading day immediately prior to (x) with respect to the Initial Closing the lower of the date of the Initial Closing (the “Initial Closing Date”) and the date of the Purchase Agreement and (y) with respect to each Additional Closing, the date of such Additional Closing, and (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for thefive trading days immediately preceding (x) with respect to the Initial Closing either the Initial Closing Date or the date of the Purchase Agreement or (y) with respect to each Additional Closing, such applicable Additional Closing date, provided, however, that in no event may the conversion price be less than the Floor Price (as defined in the Notes) (subject to customary adjustments and the applicable limitations under Nasdaq Listing Rules), which as of the date of the Purchase Agreement is $0.79. The Notes will bear interest at a rate of ten percent (10%) per annum, payable monthly in arrears, mature twenty-four (24) months from the date of issuance and contain customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum).

Pursuant to the Purchase Agreement, on November 12, 2025, the Company issued a Token Right (the “Token Right”) to certain Investors, pursuant to which the holder will be entitled to receive upon exercise of the Token Right and for no further consideration an aggregate number of Right Tokens (as defined therein) equal to the sum of (i) fifty percent (50%) of any and all Tokens (as defined in the Token Right) purchased by the Company using the net proceeds of each Closing and (ii) twenty-five percent (25%) of any and all Tokens purchased by the Company using the net proceeds of any Other Financing (as defined therein). The Token Right can be exercised at any time beginning on the date that is the sixty (60) day anniversary of the issuance date of the Token Right and ending on the ten (10) year anniversary of the issuance date of the Token Right.

In connection with the Purchase Agreement, on November 12, 2025, the Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) to register the resale of all of the Conversion Shares and shares of common stock otherwise issuable pursuant to the Notes within 20 calendar days after the Initial Closing Date and to have such registration statement be declared effective by the SEC within 60 calendar days of the Initial Closing Date. Pursuant to the terms of the Registration Rights Agreement, the Company must also file one or more additional registration statements for the resale of the Registrable Securities (as defined in the Registration Rights Agreement), if necessary.

Pursuant to the Purchase Agreement, the Company must use the net proceeds from the sale of the securities as follows: (A) at the Initial Closing, (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a treasury asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem a portion of the outstanding shares of the Series X Preferred Stock pursuant to the Redemption Agreement, (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption of remaining shares of the Series X Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, not to exceed $400,000, from the Initial Closing for general corporate purposes, working capital, acquisitions and other strategic transactions, and (B) at any Additional Closing, ninety percent (90%) of net proceeds must be used to acquire Note Purchased Crypto as a treasury asset for the Company’s balance sheet, and any remaining proceeds from the Additional Closing for general corporate purposes, working capital, acquisitions and other strategic transactions, with certain limitation that require consent of the Lead Buyer (as defined in the Purchase Agreement).

A.G.P./Alliance Global Partners served as placement agent in connection with the offering and will receive cash compensation not exceeding 7% of the gross proceeds of each Closing.

Redemption Agreement

In connection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption Agreement”), pursuant to which, on the Initial Closing Date the Company will redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 payable on the Initial Closing Date, and $500,000 contingently payable upon the satisfaction by the Company of its SEC filing requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for four consecutive quarters and certain other four-quarter requirements set forth therein. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemed by the Company at a subsequent time determined by the Company’s Board of Directors (the “Board”) or otherwise as set forth in the Redemption Agreement as described below, in each case for no additional consideration. These redemptions of the Series X Preferred Stock are conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment (as defined below).

The parties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that such prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then outstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem all remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.

In addition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the term of the Redemption Agreement, without the consent of the Lead Buyer (as defined in the Purchase Agreement).

Amended Employment Agreement

On November 12, 2025, following the approval of the Board, the Company and Mr. La Rosa, entered into an Amended and Restated Employment Agreement (the “Amended Employment Agreement”), which amends and restates that certain Amended and Restated Employment Agreement between the Company and Mr. La Rosa, dated April 29, 2022, as amended, in its entirety.

Pursuant to the terms of the Amended Employment Agreement, the Company will pay Mr. La Rosa an annual base salary of $500,000, which will be reviewed at least annually by the Board and increased (but not decreased) upon such review. Mr. La Rosa will also be eligible to receive a bonus with respect to a calendar year on the terms and in the amount as may be approved by the Compensation Committee of the Board (“Compensation Committee”) in its discretion.

The Amended Employment Agreement is for an initial term ending December 31, 2027, which term will be automatically extended, upon the same terms and conditions, for successive periods ofone (1) year. The Amended Employment Agreement may be terminated by Mr. La Rosa or the Company at any time and for any or no reason with at least 45 days advance written notice from the terminating party. If Mr. La Rosa’s employment is terminated by the Company for “cause” (as defined in the agreement), Mr. La Rosa will be entitled only to accrued and unpaid base salary through the date of termination.

If Mr. La Rosa’s employment is terminated by his failure to renew his agreement, or by Mr. La Rosa without “good reason” (as defined in the Amended Employment Agreement), then he will be entitled to receive: (i) a sum equal to 60 days’ of base salary (“Lump Sum Payment”), paid in a lump sum no later than one week after the end of the Release Execution and Recission Period (as defined in the Amended Employment Agreement); (ii) any accrued but unpaid base salary and accrued but unused paid time off; (iii) reimbursement for unreimbursed business expenses properly incurred; and (iv) such equity compensation and employee benefits, if any, to which he may be entitled under the Company’s equity compensation and employee benefit plans as of the date of termination (items (ii) and (iv) are collectively referred to as the “Accrued Amounts”).

Amendment to Articles of Incorporation

On November 10, 2025, in connection with the entry into the Purchase Agreement, the Board approved (i) a Certificate of Amendment (the “Certificate of Amendment”) to the Articles of Incorporation to provide that the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms and conditions as may be approved by the Board and agreed to by the holder(s) thereof, and (ii) an amendment to the Articles with respect to a reverse stock split of the issued and outstanding shares of common stock, at a ratio of any whole number in the range of one-for-five (1:5) to one-for-one-hundred (1:100) (the “Future Reverse Stock Split”) to be effected by the Board at any time within one (1) year from the date of the stockholders’ approval, with such timing and ratio to be determined in the discretion of the Board for all stockholders as of the date of the effectiveness of the Future Reverse Stock Split, with the right to abandon the Future Reverse Stock Split, if the Board, in its discretion, determines that it is no longer in the best interests of the Company or its stockholders (“Reverse Stock Split Amendment”).

On November 12, 2025, the stockholders holding a majority of the voting power of the Company approved the Certificate of Amendment and the Reverse Stock Split Amendment. Such approval will be effective 20 days after the Company files a definitive information statement on Schedule 14C and commences mailing such definitive information statement to the Company’s stockholders pursuant to Exchange Act. Once the stockholders’ approval is effective, the Company will file the Certificate of Amendment with the Secretary of State of the State of Nevada, and the amendment will be effective upon such filing.