La Rosa Holdings Corp.

Notes to the Consolidated Financial Statements

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

Description of Business

La Rosa Holdings Corp. (the “Company”), incorporated in Nevada on June 14, 2021, is a holding company for six agent-centric, technology-integrated, cloud-based, multi-service real estate segments. The Company generates revenue primarily by providing person-to-person residential and commercial real estate brokerage services to the public. In addition, the Company cross sells ancillary technology-based products and services to sales agents and the sales agents associated with the Company’s franchisees. The business is organized based on the services provided internally to agents and to the public, which are residential and commercial real estate brokerages, franchising services, real estate brokerage education and coaching, and property management services.

Nasdaq Continued Listing Requirements

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

On May 30, 2025, the Company received a letter from Nasdaq indicating that, because the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the period ended March 31, 2025 was $(83,377,044), the Company was no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing. On August 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications Department has determined that the Company complies with Nasdaq Listing Rule 5550(b)(1) based on the Company’s Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $7,595,799, and the matter is now closed.

Going Concern and Management’s Plans

On December 31, 2025, the Company had a cash balance of $3.1 million and working capital of $0.5 million.

On February 4, 2025 (“Closing Date”), the Company entered into the securities purchase agreement (the “SPA”) with an institutional investor (“2025 Investor”) pursuant to which it agreed to issue and sell to the 2025 Investor upon the terms and conditions set forth in the SPA on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”).

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

On September 18, 2025 (“Amendment Date”), the Company and the Facility Investor entered into the Amended Facility Agreement, pursuant to which the parties agreed to increase the Commitment Amount under the Facility from $150 million to $1.0 billion in shares of common stock. The Amended Facility Agreement amends and restates the Existing Facility Agreement in its entirety.

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

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

During 2025, the Company received proceeds from the sales of shares pursuant to the ATM Agreement of $7,496,361, funds from the sale of shares pursuant to the Facility in 2025 of $111,902 and reverse split reclassifications for $2,633, for a total of $7,608,263 in additional financing from proceeds of sales of common stock.

Basis of Presentation and Consolidation

The Company prepares the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), 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 financial statements do not necessarily purport to represent realizable or settlement values. The 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 a reporting period are reflected in the Company’s results effective from the date of acquisition through the end of the reporting period.

A noncontrolling interest in a consolidated subsidiary represents the portion of the equity in a subsidiary not attributable, directly or indirectly, to the Company. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and the presentation of net income is modified to present earnings attributed to controlling and noncontrolling interests.

Reclassifications of Prior Year Presentation

During the preparation of the financial statements for the year ended December 31, 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.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures in the accompanying notes. The Company’s significant estimates relate to revenue recognition, business combinations, impairment of assets, stock-based compensation, and income taxes.

These estimates are based on management’s best estimates and judgment. Actual results may differ from these estimates. Estimates, judgments, and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions, judgments, and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Reverse Stock Splits

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 “July Reverse Stock Split”). The July 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 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.

On January 21, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on January 26, 2026, (the “January Reverse Stock Split”).

As a result of the January Reverse Stock Split, every ten 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 January 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 5,350,967 shares to 7,290 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged at 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.

On April 16, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on April 20, 2026, (the “April Reverse Stock Split”).

As a result of the April Reverse Stock Split, every ten 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 April Reverse Stock Split, fractional entitlements were rounded up to the next whole number. The April Reverse Stock Split reduced the number of shares of common stock outstanding from 10,505,123 shares to 1,050,594 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged at 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.

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

Cash and Restricted Cash

Cash includes cash in banks, cash on hand, and sweep deposits.

Restricted cash consists of cash held by the Company for certain security deposits and rent collected by the Company as part of its property management business, which will be due to owners or tenants in the future. The Company recognizes a corresponding deposit liability until the funds are released. The Company reduces deposit liability when the associated restricted cash is transferred from escrow.

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. The allowance is determined by a number of factors, including age of the receivable, current economic conditions, historical losses, and management’s assessment of the financial condition of the debtor. 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 $179,643 and 166,504 as of December 31, 2025 and 2024, respectively. Estimates of uncollectible accounts receivable are recorded to general and administrative expense on the consolidated statements of operations.

Contract Liabilities and Performance Obligations

Contract liabilities consist of unsatisfied performance obligations related to annual dues received at the start of the calendar year. As of December 31, 2025 and 2024, the Company has approximately $171,100 and $7,747, respectively, of remaining performance obligations, all of which are 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.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. The Company maintains certain bank accounts in excess of FDIC insured limits of $250,000.

Leases

In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 842,Leases, (“ASC 842”), the Company determines whether an arrangement is or contains a lease at contract inception. Right-of-use assets and lease liabilities, which are disclosed on the consolidated balance sheets, are recognized at the commencement date of the lease based on the present value of the lease payments over the lease term using the Company’s incremental borrowing rate on the lease commencement date. Since implicit rates within the Company’s operating leases are generally not determinable, the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate for each lease using its estimated borrowing rate, adjusted for various factors including level of collateralization and term to align with the terms of the lease. Lease expense is recognized on a straight-line basis over the term of the lease. Short-term leases, defined as leases with an initial term of twelve months or less, are not recorded on the consolidated balance sheets.

Property and Equipment, Net

Property and equipment, net is stated at cost less accumulated depreciation and accumulated impairment, if any. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon a disposition, the cost and related accumulated depreciation are removed from the accounts and any related gain or loss is reflected in earnings. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

Long-lived Assets Including Acquired Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset is not recoverable, its carrying amount would be adjusted down to its fair value. Impairment of long-lived assets for the year ended December 31, 2025 was approximately $0.7 million. There wasno impairment charge recorded for the year ended December 31, 2024.

Intangible assets are stated at cost less accumulated amortization and accumulated impairment, if any. Amortization is calculated on a straight-line basis over the estimated useful lives of the definite-lived intangible assets, as follows:

Business Combinations

The Company completed a number of acquisitions during 2024 and will acquire additional businesses in the future. The results of businesses acquired in a business combination are included in the Company’s 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, in a business combination 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.

Goodwill

Goodwill is the excess of cost over the fair value of net assets acquired. Goodwill is not amortized but tested for impairment annually or more frequently if certain circumstances indicate a possible impairment may exist. The Company performed a qualitative assessment as of October 1, 2025 and determined it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment included, but is not limited to, market and macroeconomic conditions, cost factors, cash flows, changes in key management personnel, and the Company’s share price. The result of this assessment determines whether it is necessary to perform a quantitative goodwill impairment test. As a result of this assessment, the Company has determined an impairment of goodwill as for the year ended December 31, 2025 of approximately $6.2 million. The Company recorded an impairment of goodwill of approximately $0.8 million for the year ended December 31, 2024.

Revenue Recognition

The Company applies the provision of FASB ASC 606,Revenue from Contracts with Customers (“ASC 606”). The Company measures revenue within the scope of ASC 606 by applying the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of ASC 606, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied. The application of these five steps necessitates the development of assumptions that require judgment.

The Company records revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

Real Estate Brokerage Services (Residential and Commercial)

The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. Revenue from real estate brokerage services (residential) mainly consists of commissions generated from real estate brokerage services. The Company is contractually obligated to provide for the fulfillment of transfers of real estate between buyers and sellers. The Company provides these services itself and controls the services of its agents necessary to legally transfer the real estate. Consequently, the Company is defined as the principal in the transaction. The Company, as principal, satisfies its obligation upon the closing of a real estate transaction. The Company has concluded that agents are not employees of the Company, rather deemed to be independent contractors. Upon satisfaction of its obligation, the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The transaction price is calculated by applying the Company’s portion of the agreed-upon commission rate to the property’s selling price. The Company may provide services to the buyer, seller, or both parties to a transaction. In instances in which the Company represents both the buyer and the seller in a transaction, it recognizes the full commission on the transaction. Commissions revenue contains a single performance obligation that is satisfied upon the closing of a real estate transaction, at which point the entire transaction price is earned. The Company’s customers remit payment for the Company’s services to the title company or attorney closing the sale of property at the time of closing. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided. In addition to commission, revenue from real estate brokerage services (residential) consists of annual and monthly dues charged to the agents for providing systems, accounting, marketing tools and compliance services. The annual and monthly dues are recognized each month as services are provided.

Franchising Services

The Company’s franchise agreements offer the following benefits to the franchisee: common use and promotion of La Rosa Realty trademark; distinctive sales and promotional materials; access to technology and training; and recommended procedures for operation of La Rosa Realty franchises. The Company concluded that these benefits are highly related and part of one performance obligation for each franchise agreement, a license of symbolic intellectual property that is billed through a variety of fees including (i) initial franchise fees, (ii) annual dues and (iii) royalty fees. Initial franchise fees consist of a fixed fee payable upon signing the franchise agreement. Annual dues are calculated at a fixed fee per agent (prorated for any partial year) payable annually before the 10th day of January or within 10 days after each agent commences their association with the franchise. Royalty fees are calculated as the greater of a (a) fixed percentage of gross commission income for the period which is made up of all commissions, transaction fees, property management fees, and monthly fees earned by the Franchisee and the Franchisee’s independent sales associates, agents, representatives, contractors, employees, partners, directors, officers, owners, or affiliates, regardless of whether or not such individuals or affiliates are entitled to retain all or part of such gross commission income, or (b) a fixed monthly fee.

Coaching Services

The Company provides mandatory training and guidance to newly licensed agents for their first four sales transactions. For each of the four transactions the newly licensed agents completes, La Rosa Coaching earns 7% for the brokerage who sponsors the agent, which may be La Rosa Realty, earns 6% of the commission. Coaches also provide optional special education services throughout the year to agents.

Property Management

The Company provides property management services on a contractual basis for owners who lease their residential properties. These services include managing daily operations of the property, tenant background screening, overseeing the tenant application process, and accounting services. The Company is compensated for its services through a flat monthly management fee. At the option of the owner, the Company can also facilitate and account for repair and remodeling costs for properties under management. These costs are not included in the transaction price as the customer is the party paying and receiving these services. Property management services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees associated with the services performed.

The amount of revenue recognized is presented net reflecting only the fee retained by Property Management for any services provided by the Company.

Title Settlement and Insurance

The Company provides title services Revenue from title insurance premiums is recognized at the closing of the real estate transaction, when the title insurance policy is issued and the performance obligation is satisfied. Fees for title searches, escrow services, and other related services are recognized as the services are performed. Any advance payments received are recorded as deferred revenue until the related services are completed.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company operates six separate and distinct segments, as the Chief Operating Decision Maker (“CODM”) reviews financial performance for each and makes decisions on a consolidated basis.

Cost of Revenue

Cost of revenue consists primarily of agent commissions, less fees paid by the agents owed to the Company and the cost of interchange and other fees for credit card processing services.

Advertising

Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2025 and 2024 was $968,962 and $272,059, respectively, and included in sales and marketing expenses in the consolidated statements of operations.

Debt Discounts and Debt Issuance Costs

Debt discounts and costs incurred in connection with obtaining new debt financing are deferred and amortized over the life of the related financing. Debt discounts and deferred costs are recognized as a direct reduction in the carrying amount of the debt instrument on the consolidated balance sheets and are recognized on the consolidated statements of operations to amortization of financing fees over the term of the related debt using the effective interest method. For the years ended December 31, 2025 and 2024, the Company recorded amortization of debt discounts and debt issuance costs of $63,160 and 649,138, respectively. Upon abandonment of a pending financing transaction, the related deferred financing costs are charged to expense.

Deferred Offering Costs

The Company capitalized certain legal, accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital. Should the planned equity financing be abandoned, the deferred offering costs would be expensed immediately as a charge to operating expenses in the consolidated statement of operations. There wereno deferred offering costs for the years ended December 31, 2025 or 2024.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.

The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.

The Company accounts for uncertainties in income taxes under the provisions of ASC 740 which clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

The Company adopted ASU 2023-09,Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. This update related to improvements to income tax disclosures which the Company adopted prospectively this fiscal year beginning January 1, 2025. The additional disclosures have been included inNote 14 – Income Taxes.

Stock Based Compensation

The Company issues stock-based awards to employees, directors, and non-employees that are generally in the form of stock options, restricted shares, or restricted stock units (“RSUs”). Compensation cost for equity awards is measured at their grant-date fair value, and in the case of restricted shares and RSUs, fair value is determined based on the price of the Company’s underlying Common Stock. The grant date fair value of stock options is estimated using 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 stock options.

The expense for awards is recognized over the requisite service period (generally the vesting period of the award). The Company has elected to treat awards with only service conditions and with graded vesting as one award. Consequently, the total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date. The Company recognizes forfeitures as they occur.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. This update related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. The Company adopted the guidance prospectively in the fiscal year beginning January 1, 2025 and additional disclosures have been included inNote 14 – Income Taxes.

Recently Issued Accounting Standards Not Yet Adopted

In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock (“ASU 2026-01”). The guidance in ASU 2026-01 clarifies how issuers initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock by requiring issuers to use the PIK dividend rate stated in the preferred stock agreement. ASU 2026-01 will be effective for the Company’s annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual periods, with early adoption permitted. Entities may apply the amendments on either a prospective basis or a modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date. The Company is currently evaluating the impact that adoption of ASU 2026-01 may have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-7,*Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606).*The amendments in this Update exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06,*Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40).*The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 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.

Note 2 — Restatement of Previously Issued Consolidated Financial Statements

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2025, the Company identified errors related to revenues and cost of revenue recognition in its previously issued (i) consolidated financial statements as of and for the year ended December 31, 2024 included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Period”), and (ii) unaudited interim condensed consolidated financial statements for each quarterly and year-to-date period included in its Quarterly Reports on Form 10-Q for the interim periods ended March 31, 2024, June 30, 2024, September 30, 2024, March 31, 2025, June 30, 2025 and September 30, 2025 (the “Interim Periods”, which, together with the Annual Period, the “Affected Periods”).

During 2024, the Company incorrectly recorded certain property management fee revenue inclusive of tenant rent revenues on a gross basis. Upon review of the underlying contractual arrangements and evaluation under ASC 606, Revenue from Contracts with Customers, management concluded that the Company acted as an agent rather than as a principal for these arrangements. As a result, the Company has corrected revenues during the Affected Periods to reduce property management revenue to the fees received (the “Revenues Adjustment”).

Additionally, the Company has determined that costs of revenue should be reduced equivalently to the amount of the revenues restated. As a result, the Company has recorded an adjustment to its consolidated financial statements during the Affected Periods (together with the Revenues Adjustment, the “Restatement Adjustments”), as the Company was previously incorrectly presenting payments to property owners inclusive of tenant rent related to tenant revenues as cost of revenues.

The Company evaluated the materiality of these misstatements both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99,Materiality, and SAB No. 108,Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, and determined the effect of correcting these misstatements was material to the Affected Periods. As a result of the material misstatements, the Company has restated its consolidated financial statements for the Affected Periods in accordance with ASC 250, Accounting Changes and Error Corrections (the “Restated Consolidated Financial Statements”).

A reconciliation from the amounts previously reported for the Affected Periods to the restated amounts in the Restated Consolidated Financial Statements is provided for the impacted financial statement line items below for the consolidated statement of operations for the year ended December 31, 2024. The amounts labeled “Restatement Adjustments” represent the effects of the Restatement Adjustments.

The following tables present the effects of the Restatement Adjustments on the Company’s consolidated statements of operations for the year ended December 31, 2024:

Note 1 – Basis of Presentation and Summary of Significant Accounting policies and Note 15 – Segments have been updated and restated, as applicable, to reflect the impact of the Restatement Adjustments described above.

Refer to Note 3 Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements for details of the effect of Restatement Adjustments on the interim periods.

Note 3 — Restatement Of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements

The following tables present the effects of the Restatement Adjustments described in Note 2 - Restatement of Previously Issued Consolidated Financial Statements on the Company’s unaudited interim condensed consolidated financial statements for the periods indicated:

Note 4 — 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 follows ASC 820,Fair Value Measurement, for financial assets and liabilities measured at fair value on a recurring basis. The Company uses the fair value hierarchy to categorize the financial instruments measured at fair value based on the available inputs to the valuation and the degree to which they are observable or not observable in the market.

The three levels of the fair value hierarchy are as follows:

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

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

The Company determined that during the years ended December 31, 2025 and 2024, certain instruments qualified as derivative liabilities and were recorded at fair value on the date of issuance and re-measured at fair value each reporting period with the change reported in earnings. The fair value of these instruments was computed using the Black Scholes model, incorporating transaction details such as the assumed price of the Company’s Common Stock at an initial public offering, contractual terms, maturity and risk-free rates, as well as assumptions about future financings, volatility, and holder behavior.

There were no derivative liabilities recorded as of December 31, 2025. SeeNote 9 –Warrants for more information.

Securities Purchase Agreement

On February 4, 2025, the Company entered into an SPA with an investor (“2025 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 8 – 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 $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor, leaving net proceeds remaining 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 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 2025 Investor entered into, and closed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the 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 $10,240,000 measured as the difference between the fair value of the Incremental Warrants at February 4, 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 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 December 31, 2025, June 18, 2025, June 26, 2025 and February 4, 2025:

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 from February 4, 2025 when the Company entered into the agreement 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 December 31, 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 year qualified as an extinguishment.

The following tables provide a summary of changes in fair value associated with the Level 3 liabilities for the years ended December 31, 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.

Note 5 — Business Combinations

During 2024, the Company acquired majority ownership of the following franchisees and affiliates of the Company: La Rosa Realty Winter Garden LLC, Las Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC, La Rosa Realty Success LLC, BF Prime LLC, and La Rosa Realty Beaches LLC & La Rosa Realty Baxpi. All six 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. In addition, the company has acquired Nona Title Agency LLC (rebranded FPG Title).

The acquisitions were accounted for using the acquisition method of accounting, which requires that the assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date.

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 eight acquisitions for the year ended December 31, 2024:

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

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

The amounts of revenue, cost of revenue, gross profit, and loss from operations before income taxes of the eight from 2024 included in the Company’s Consolidated Statement of Operations from the date of the acquisition for the years ended December 31, 2024 are as follows:

The following unaudited pro forma financial information presents the combined operating results of the Company, 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 year ended December 31, 2024:

Note 6 — Goodwill and Intangible Assets

Impairment test

During the fiscal fourth quarters of both 2025 and 2024, we determined that triggering events occurred as a result of additional decline in operational estimates for franchises acquired, along with uncertainty for projected cash flows, and also further decreases in our stock price. Therefore, we performed quantitative impairment tests as of the first day of fiscal fourth quarters of both 2025 and 2024 for our reporting units with remaining goodwill and intangibles.

The fair value of each reporting unit was estimated using a weighing of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business of 3% per year in revenues over a 10 year period, estimation of the useful life over which cash flows will occur, and determination of our carrying value of equity for the reporting unit being tested.

For the year ended 2025, the combined fair values for all reporting units were then reconciled to the aggregate market value of our shares of common stock on the date of testing. Based on our most recent impairment test, a total impairment charge of $6,911,770 was recorded, which included $6,181,134 for goodwill and $730,636 for intangible assets.

For the year ended 2024, a goodwill impairment charge of $787,438 was recorded. There wasno impairment of intangibles recorded for the year ended December 31, 2024.

Additionally, following performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December 31, 2025.

The gross carrying amount of goodwill as of December 31, 2025 and December 31, 2024 was $1,831,197 and $8,012,331, respectively.

Changes in the carrying amount of goodwill are as follows:

The components of purchased intangible assets were as follows:

The Company recorded $685,723 and $1,006,052 of amortization of the intangible assets during the years ended December 31, 2025 and December 31, 2024, respectively. The remaining estimated annual amortization expense is expected to be as follows:

Note 7 — 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.

The Company elected certain practical expedients under ASC 842 which allows the Company to combine lease and non-lease components of lease payments in determining right-of-use assets and related lease liabilities. The Company also elected the short-term lease exception. 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. The rent expense for the years ending December 31, 2025 and 2024 was $181,929 and $139,200, respectively. On July 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, a former Company’s Board member. There is a written lease, which includes minimum monthly rent of $5,300, with a term ending in June 2025. The parties have agreed to continue on a month-to-month basis. In addition, the Company rents various office spaces and has acquired leases as part of its acquisition strategy.

Lease costs for the years ended December 31, 2025 and 2024 were $935,587 and $905,825 respectively, and included in general and administrative expenses in the consolidated statements of operations.

Supplemental cash flow information related to leases is as follows:

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.

During the year ended December 31, 2024, the Company acquired seven franchisees and affiliates, of which five had remaining lease terms beyond twelve months, resulting in an increase of $417,228 in right-of-use assets and an increase in lease liabilities of $425,494.

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 11%.

Future maturities on lease liabilities as of December 31, 2025 are as follows:

There were no leases with residual value guarantees.

Note 8 — 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 December 31, 2025, the outstanding balance on the line of credit was $0 at a prime rate of 7.00% plus 4.50%, or 11.50%. 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.

Convertible Note Facility, Redemption Agreement, and Amendment to the Articles of Incorporation

On November 12, 2025, the Company and the Investors entered into the Securities Purchase Agreement, pursuant to which the Company agreed to, among other things, 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, subject to the satisfaction or waiver of certain closing conditions.

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 SEC to register the resale of all of the Conversion Shares and shares of Common Stock otherwise issuable pursuant to the Notes. The Company subsequently received a waiver of this condition.

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 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.

In accordance with the terms of the Securities Purchase Agreement, the stockholders of the Company holding a majority of the voting power approved (1) the issuance of all Notes and Conversion Shares in excess of 19.99% of the Company’s issued and outstanding common stock at a price less than the minimum price on November 12, 2025 by written consent in lieu of having a stockholders’ meeting; (2) the Certificate of Amendment, and (3) the Reverse Stock Split. On November 24, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On December 4, 2025, the Company filed a definitive information statement on Schedule 14C with the SEC and commenced mailing the same to the stockholders of record of the Company as of the close of business on November 12, 2025. On December 25, 2025, such approval became effective.

On January 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Securities Purchase Agreement, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right (as defined in the Securities Purchase Agreement), for an aggregate purchase price of $9,900,000. The Initial Note is convertible into Conversion Shares, at an initial conversion price equal to $8.347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $7.78, which will be lowered pursuant to the terms of the Initial Note for the Initial Note and all other Notes upon the effectiveness of the stockholders’ approval of such reduction (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.

In connection with the Initial Closing on January 8, 2026, as contemplated under the Securities Purchase Agreement: (i) the Company and each of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property Security Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral Agent a lien and security interest in certain intellectual property of the Company.

As a condition to the Initial Closing as provided in the Securities Purchase Agreement: (i) on December 22, 2025, the Company filed the Certificate of Amendment, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account Control Agreement.

The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a digital 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 Super Voting Preferred Stock pursuant to the Redemption Agreement (as defined in the Initial 8-K), (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 Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.

Curvature Securities LLC served as placement agent in connection with the offering described herein and will receive cash compensation not exceeding 7% of the gross proceeds of the Initial Closing.

On the Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in theRedemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.

The Company entered into the Securities Purchase Agreement and transactions contemplated thereby to secure immediate and committed access to capital at a time when alternative financing sources were either unavailable or significantly more dilutive and restrictive. The facility was intended to provide critical liquidity to support ongoing operations, address going concern considerations, and preserve enterprise value. In addition, the Company sought to strengthen its balance sheet and position itself to deploy capital into strategic initiatives, including investments in stablecoins, A.I. infrastructure, and data center opportunities, which management believes have the potential to enhance long-term shareholder value. Unlike traditional financing, the structure allows the Company to draw capital incrementally, providing flexibility to align funding with operational needs and market conditions. While the transaction includes costs such as potential dilution and derivative liabilities, management determined that these were justified given the significant risk to the business if capital was not secured. The transaction was negotiated at arm’s length and, in management’s view, represents a reasonable and necessary financing solution under the circumstances.

Senior Secured Convertible Note

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. Interest is built into the fair value of the Note.

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 10 – 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.

Pursuant to this agreement the Company has the right to convert the principal and accrued interest into shares of common stock at the Conversion Price or Alternate Conversion Price which is the greater of (i)95% of the lowest VWAP of the Common Stock during theseven consecutive trading days immediately preceding the conversion. As of December 31, 2025 the Company converted $1,450,000 of principal and $112,000 of accrued interest at a conversion premium of 20% for $312,000 resulting in a total value of $1,874,000 converted into 8,215 shares of common stock.

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.

During the years ended December 31, 2025 and 2024, non-cash interest expense of $63,160 and $391,836, respectively, was recorded from the amortization of the debt discount and the debt issuance costs related to these Cash Advances. As of December 31, 2024, the remaining gross balance of the Cash Advances was $833,766, with a remaining unamortized discount of $215,085, for a net balance of $618,861.

On July 3, 2023, the Company entered into a Cash Advance Agreement with Cedar for the purchase and sale of future receipts pursuant to which the Company sold in the aggregate $764,150 in future receipts of the Company for $500,650. The Company recorded a debt discount in the amount of $237,150 based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company and debt issuance costs of $26,350. The debt discount and debt issuance costs were reflected as a reduction on the outstanding liability and were being amortized as non-cash interest expense using the effective interest method over the term of the agreement. The Cash Advance was fully repaid in January 2024.

On May 20, 2024, the Company entered into another Standard Merchant Cash Advance Agreement (the “2024 Cash Advance”) with Cedar for the purchase and sale of future receipts pursuant to which the Company sold in the aggregate $761,250 in future receipts of the Company for $500,000. Future receipts include cash, check, credit or debit card, electronic transfer, or other form of monetary payment. Until the purchase price has been repaid, the Company agreed to pay Cedar $23,000 per week. In addition, the Company granted Cedar a security interest in all the Company’s accounts, including deposit accounts and accounts receivable and proceeds. The Company recorded a debt discount in the amount of $236,250 based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company and debt issuance costs of $25,000. The debt discount and debt issuance costs were reflected as a reduction on the outstanding liability and were being amortized as non-cash interest expense using the effective interest method over the term of the agreement.

On October 7, 2024, the Company entered into a Standard Merchant Cash Advance Agreement (the “Cedar Cash Advance Agreement”) with Cedar pursuant to which the Company sold to Cedar $616,250 of its future receivables, including cash, check, credit or debit card, electronic transfer, or other form of monetary payments from third parties (the “Receivables Purchased Amount”), for a purchase price of $425,000 less underwriting fees and expenses paid, or for net funds of $403,750 to the Company. The parties agreed that a portion of the proceeds equal to $301,250 were to be paid by the Company to Cedar pursuant to the May 20, 2024 cash advance agreement discussed above. This payment was accounted for as an extinguishment of this May 20, 2024 cash advance agreement debt and the Company recorded a loss of $54,829 representing the remaining unamortized deferred financing costs and discount. Pursuant to the Cedar Cash Advance Agreement, Cedar was expected to withdraw $15,400 a week directly from the Company’s bank account until the Receivables Purchased Amount due to Cedar under the Cedar Cash Advance Agreement is paid in full. In the event of a default (as defined in the Cedar Cash Advance Agreement), Cedar, among other remedies, could demand payment in full of all amounts remaining due under the Cedar Cash Advance Agreement. To guarantee the Company’s satisfaction of its obligations under the Cedar Cash Advance Agreement, the Company granted Cedar a security interest in all its accounts, including deposit accounts and accounts receivable and proceeds.

On October 7, 2024, the Company, entered into a Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) pursuant to which the Company sold to Arin $588,000 of its future receivables for the sale of its goods and services (the “Receivables Purchased Amount”), for a purchase price of $420,000 less fees and expenses paid, or for net funds of $400,000 to the Company. Pursuant to the Arin Cash Advance Agreement, Arin was expected to withdraw $15,474 a week directly from the Company’s bank account until the Receivables Purchased Amount due to Arin under the Arin Cash Advance Agreement was paid in full. In the event of a default (as defined in the Arin Cash Advance Agreement), Arin, among other remedies, could demand payment in full of all amounts remaining due under the Arin Cash Advance Agreement. To guarantee the Company’s satisfaction of its obligations under the Arin Cash Advance Agreement, the Company granted Arin a security interest in all its accounts, including, but not limited to, deposit accounts, accounts receivables, other receivables, chattel paper, documents, equipment, general intangibles, instruments and inventory.

Notes Payable-Senior Secured Promissory Notes

In connection with the execution of the SPA mentioned above, during the first quarter of 2025, the Company repaid the remaining principal and accrued interest of all three outstanding senior secured promissory notes issued in 2024 to an accredited investor thereby fully extinguishing the Company’s debt obligations under the 2024 note issuances discussed below.

In addition, the accredited investor elected to convert an aggregate principal and interest amount of $483,751 of the notes into 173 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 110 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.

Prior to extinguishment, 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 below.

Also prior to extinguishment, 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 prior to being retired was $23,798 for the year ended December 31, 2025. The interest expense incurred for the senior secured promissory notes was $264,490 for the year ended December 31, 2024.

On February 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $1,052,632 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 8 shares of the Company’s common stock as a commitment fee, a warrant to purchase 15 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 12 shares of the Company’s common stock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note was fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest volume weighted average price (VWAP) of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes. In connection with this financing, the Company also issued to its placement agent, Alexander Capital L.P. (“Alexander Capital”), a 5-year warrant to purchase 3 shares of the Company’s common stock at an exercise price of $12,000 per share. During the year ended December 31, 2024, the investor converted $69,534 of accrued interest and $746,440 of principal to 110 shares of common stock.

On April 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $1,316,000 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 6 shares of the Company’s common stock as a commitment fee, a warrant to purchase 19 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 19 shares of the Company’s common stock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note is fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company fails to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes. During the year ended December 31, 2024, the investor converted $71,713 of accrued interest to 7 shares of common stock.

On July 16, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $444,600 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 4 shares of the Company’s common stock as a commitment fee, a warrant to purchase 7 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 7 shares of the Company’s common stock with an exercise price of $18,000. The second warrant only became exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note was fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes.

The Company evaluated the terms of the securities purchase agreements and determined that the commitment shares and the first warrants were freestanding instruments. The Company determined the commitment shares were to be classified as equity, which are initially recorded at fair value with no subsequent remeasurement. The Company determined that the first warrants were classified as a derivative liability, which were initially recorded at fair value with changes in fair value recorded in earnings. The second warrants and certain terms within the debt notes were contingent upon certain possible events that were within the Company’s control. The Company determined that the contingencies were not probable and, as such, were not recorded as contingent liabilities.

The Company incurred issuance costs that were directly attributable to issuing the debt instruments in the amount of $346,248, which included placement fees of $202,518 paid to Alexander Capital. Of the debt issuance costs, $326,879 was paid in cash and the remainder was the value of a warrant issued to Alexander Capital. The Company determined that the warrant issued to Alexander Capital was classified as equity. The issuance costs were not specifically related to any instrument within the transactions and, as such, were allocated in the same proportion as the proceeds were allocated to each of the debt transactions, the committed shares, and the warrants.

On September 25, 2024, the Company entered into an agreement to amend the three Senior Secured Promissory Notes entered into in February, April, and July of 2024. The amendment extended the maturity date for all three notes to August 1, 2025, and delayed payments until February 1, 2025. In lieu of all payments required under the original notes, $250,000 per month was to be paid beginning February 1 and each month after, until all three notes were paid in full. In addition, $200,000 was paid on September 30, 2024 and applied to the February note. This amendment was accounted for as an extinguishment of debt, and the Company recorded a loss of $722,558. The Company had accrued interest on the notes totaling $264,490 as of December 31, 2024.

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 for the year ended December 31, 2025.

Notes Payable-Economic Injury Disaster Loans

On June 1, 2020, the Company received net proceeds from Economic Injury Disaster Loans (the “EIDL Loans”) from the Small Business Administration (“SBA”) in the aggregate amount of $365,300. After processing fees, the net proceeds were $365,100 under the terms. The EIDL Loans, which are in the form of promissory notes, mature in May 2050 and bear interest at a rate of 3.75% per annum. Payments are to be made monthly, and each payment is applied first to the interest accrued to the date of receipt of each payment and any remaining payment is applied to principal. The loan terms provide for a collateral interest for the SBA and limits the use of proceeds to working capital to alleviate the effects of COVID-19 on the Company’s economic condition.

During the fourth quarter of 2023, the Company acquired two franchisees that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $263,000. During the first quarter of 2024, the Company acquired a franchise that had an outstanding EIDL Loan in the aggregate of $34,100. The Company acquired the EIDL Loans, and the EIDL loans 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.

Future maturities of Economic Injury Disaster Loans as of December 31, 2025, were as follows:

Acquisition Settlement Agreement

One October 18, 2024, the Company entered into a mediated settlement agreement to purchase the remaining 49% of the non-controlling interest of the subsidiary Nona Legacy Powered By La Rosa Realty, Inc. for a total of $1,000,000 paid in equal monthly installments of $11,905 over a period of seven years with the first payment due on November 1, 2024. The settlement agreement releases the Company of any further claims and bears no interest.

Notes payable as of December 31, 2025 and December 31, 2024 were as follows:

Note 9 — Warrants

Warrants are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s Common Stock at a fixed price. The strike price of warrants granted in 2022 were set when the Company completed the IPO pricing agreement with the Company’s underwriters on October 9, 2023, which was $5.00.

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 750 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 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 December 31, 2025, the Company’s stock price was $6.34.

2022 Warrant Exchange Agreements

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 $275,264. In addition, on August 7, 2024, the Company, entered into a securities purchase agreement with an institutional accredited investor, Brown Stone Capital Ltd., pursuant to which the Company agreed to issue up to 3,051,336 shares of the Company’s common stock, and/or pre-funded warrants to purchase shares of common stock, at $0.59 per share. The discount related to the shares purchased by Brown Stone resulted in a deemed dividend of $434,163. Pursuant to this agreement, on August 12, 2024, the Company issued 95 shares of common stock. In accordance with the full ratchet antidilutive terms tied to Emmis Capital II, LLC and Joseph La Rosa’s warrants, the warrants were adjusted to reflect the strike price of the common stock issued to Brown Stone Capital Ltd., and the number of shares covered by each of the warrants increased to 847,458, in the aggregate. The difference in the fair value between each warrant immediately before and after the trigger was, in aggregate, $485,876, which is considered a deemed dividend. These two transactions increased the basic net loss per share for common stockholders for the year ended December 31, 2024.

At December 31, 2025, warrants outstanding that have vested and are expected to vest are as follows:

Additional information with respect to warrant activity:

During 2023 the Company issued warrants to purchase 6 shares of Common Stock to the Company’s underwriter as compensation for providing services to complete the Company’s IPO. The warrants vested on April 2, 2024 and have a term offive years from the grant date with an exercise price of $44,000. The warrants are freestanding instruments in a bundled transaction with the IPO and are accounted for separately. The Company determined that the warrants are classified as equity.

Warrants related to 2024 Senior Secured Notes Payable

On February 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issued two warrants, the first gave the investor the option to purchase 15 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.

On April 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issued two warrants, the first gives the investor the option to purchase 19 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.

On July 15, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issuedtwo warrants, the first gives the investor the option to purchase 7 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.

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 mentioned above. Two of the three warrants were exercised on a cashless basis for a total of 2 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.

Under an agreement between the Company and the Company’s underwriter, Alexander Capital, the Company issued a warrant to Alexander Capital as a result of the issuance of the promissory note on February 20, 2024. The holder of the warrant had the right to purchase 3 shares of the Company’s common stock with an exercise price of $12,000, exercisable until the five-year anniversary of the grant date.

During the fiscal years ended December 31, 2025 and 2024, there was no unrecognized expense related to warrants. There was no unrecognized amortization of financing fees related to warrants in 2025 or 2024.

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 and the assumptions used in the Black-Scholes model are set forth in the table below.

Note 10 — Stockholders’ Equity

The Company is authorized to issue two classes of stock consisting of 2,000,000,000 shares of Common Stock, $0.0001 par value per share, and 50,000,000 shares of preferred stock, $0.0001 par value per share. On July 22, 2021, the Company issued 750 shares of Common Stock and 2,000 shares of Series X Super Voting Preferred Stock to Mr. La Rosa as compensation for services and the founding of the Company.

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 December 31, 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 1,563 shares (as adjusted the effects of stock splits effected by the Company) to 3,750 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 Stock 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 7,290 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged at 2,000,000,000 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.

On November 10, 2025, the Company’s stockholders holding a majority of the voting power of the Company by a written consent approved the amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, to effect a reverse stock split of the Company’s Common Stock at a ratio in the range of 1-for-5 to 1-for-100, with such ratio to be determined by the Board (“Stockholders Approval”). Such resolution became effective on December 25, 2025, or twenty (20) days after the Company filed with the SEC and mailed to its stockholders respective Information Statement on Schedule 14C on or approximately December 4, 2025. Following such stockholders’ approval, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on January 26, 2026 (“January 2026 Reverse Stock Split”). As a result of the January 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock.

Following the Stockholders Approval described above, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on April 20, 2026 (“April 2026 Reverse Stock Split”). As a result of the April 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock.

As a result, all share information in the accompanying financial statements has been adjusted as if the reverse stock splits happened on the earliest date presented. The par value of the Common Stock was not impacted by the split.

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.

Additional Common Stock Issuances

On January 17, 2025, the Company issued 50 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 367 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 year ended December 31, 2025 was $1,160,381.

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 216 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $411,062.

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 38 and 26 shares of the Company’s common stock, respectively, for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $122,570.

On March 10, 2025, the Company issued 5 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $8,036.

On March 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 31 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted $46,925.

On April 21, 2025, the Company issued the CEO an aggregate of 413 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 year ended December 31, 2025 related to this transaction amounted to $444,319.

On July 7, 2025, the Company issued 3 shares of common stock pursuant to a consulting agreement for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $3,756.

On July 8, 2025, the Company issued the remaining amount of common stock of 3 shares, pursuant to the consulting agreement entered into on February 20, 2025. The stock compensation expense for the year ended December 31, 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 18,519 shares of common stock, at $13.50 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 750 shares of common stock to the Holder. The stock compensation expense for the year ended December 31, 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 500 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 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 18,519 shares of common stock, at $13.50 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 750 shares of common stock. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $573,000.

On August 11, 2025, the Company issued its directors, officers, certain employees an aggregate 1,011 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 year ended December 31, 2025, related to this transaction amounted to $511,116.

On August 28, 2025, the Company issued 427 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 year ended December 31, 2025, related to this transaction amounted to $236,575.

On September 26, 2025, the Company issued 750 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, of which $348,319 was used to offset accounts payable, while the remaining $154,557 is recorded as stock based compensation issued for consulting work.

For the year ended December 31, 2025, the holder of our Senior Secured promissory notes converted 8,215 of the Company’s common stock as part of their First warrants and principal and interest conversions.

For the year ended December 31, 2025, the Company utilized their ATM and sold a total of 3,871 shares of the Company’s common stock for gross proceeds of $7,781,297 and net proceeds of $7,497,266.

For the year ended December 31, 2025, the Company issued 44 shares of the Company’s common stock pursuant to the Restricted Stock Unit (RSU) vesting with a value of $173,861.

On February 20, 2024, April 1, 2024, and July 15, 2024, the Company entered into securities purchase agreements with the same accredited investor for the issuance of senior secured promissory notes. As part of these transactions, the Company issued 8 shares,6 shares, and 4 shares respectively, of the Company’s common stock as commitment fees. The value of the shares was allocated to the debt discount.

In February 2024, the Company executed a service agreement with a service provider for efforts to initiate the Company’s brokerage business in Texas. The Company issued a single share of the Company’s unregistered, restricted common stock to the service provider, which were issued on February 22, 2024 for a share value and stock-based compensation expense amount of $6,589.

In September 2023, the Company executed a consulting agreement with a service provider to supply certain investor relations services post-IPO. The Company extended the agreement in March 2024 and issued 28 shares of the Company’s unregistered, restricted common stock, which were issued on March 13, 2024 and valued at $14,142.86 per share resulting in $396,000 of stock-based compensation expense.

In May 2024, the Company executed three consulting agreements with service providers to supply certain investor relations services post-IPO. As part of these agreements, the Company issued an aggregate of 33 shares of the Company’s unregistered, restricted common stock, which were issued on May 17, 2024 and valued at $9,454.54 per share resulting in $312,000 of stock-based compensation expense.

During 2024, $891,064 worth of principal and interest related to the first and second senior secured promissory notes were paid down through the issuance of 117 restricted common stock. Additionally, $150,000 worth of accounts payable was paid down through the issuance of 29 shares of restricted common stock.

During 2024, the Company issued 95 shares of restricted common stock and 64 in prefunded warrants in order to raise capital. The pre-funded warrants were exercised by quarter end. The restricted shares were granted at $4,720.00 per share and the pre-funded warrants were issued at $5,200 per share.

In September 2024, the Company executed a consulting agreement to receive certain investor relations services. As part of the agreement, the Company issued 29 shares of unregistered, restricted commons stock, which were issued on September 23, 2024 and valued at $5,200.00 per share.

During 2024, the Company purchased seven entities. A portion of the purchase price for all of the entities were settled by the issuance of an aggregate of 202 unregistered, restricted shares of the Company’s common stock. See Note 5— Business Combinations for additional information.

Note 11 — Series X Preferred Stock Subject to Redemption

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 which is recognized as a deemed dividend on the statement of operations 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 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.

On December 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation, pursuant to which effective as of December 26, 2026 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 of Directors and agreed to by the holder(s) thereof. As a result, the Company reassessed the classification of the Series X Preferred Stock after the modification, in relation to the potential redeemability of the shares and the permanent equity versus temporary equity classification and determined the Series X Preferred Stock should be reclassified to temporary equity as of the effective date of the amendment.

Note 12 — Equity Incentive Plan

On January 10, 2022, the Company adopted the La Rosa Holdings Corp. 2022 Equity Incentive Plan (the “2022 Plan”) pursuant to which a maximum of 625 shares of Common Stock of the Company were authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), performance units and performance shares. Persons eligible to receive awards under the 2022 Plan include employees, consultants, and directors of the Company. The plan is administered by the Compensation Committee of the Board of Directors. On October 20, 2023, the Company filed a Form S-8 to register the securities in the 2022 Plan. As of December 31, 2025, there are 819 shares available for issuance after reserving an additional 568 shares under the plan through the end of 2025.

Stock Option Awards

Stock options are awards issued to employees and directors that entitle the holder to purchase Common Stock of the Company at a fixed price.

The Company recorded stock-based compensation related to options of $200,076 and $3,267,088 for the years ended December 31, 2025 and 2024, respectively. The Company did not realize any tax benefits associated with share-based compensation for the years ended December 31, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.

At December 31, 2025, options outstanding that have vested and are expected to vest are as follows:

Additional information with respect to stock option activity:

The weighted average fair value and the assumptions used in calculating the stock options granted during fiscal year 2025 and 2024 were based on estimates at the date of grant as follows:

For the years ended December 31, 2025 and 2024, the Company recorded stock-based compensation for employees awards of $3,148,801 and $3,292,291, 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.

As of December 31, 2025 and 2024, unrecognized compensation expense related to stock option awards totaled $75,126 and $92,892, respectively.

Restricted Stock Units (RSUs)

A restricted stock unit covering 1 share of Common Stock issued to the Company’s Chief Technology Officer (CTO) vested on February 1, 2024. In addition, the CTO received a grant of 1 restricted stock unit on February 1, 2025, which was issued under the 2022 Plan.

For the years ending December 31, 2025 and 2024, the Company recorded $51,345 and $23,144, respectively, of share-based compensation expense related to the RSUs. For the years ending December 31, 2025 and 2024, unrecognized compensation expense related to the awards was $229,952.16 and $86,722, respectively.

The Company did not realize any tax benefits associated with share-based compensation for the years ending December 31, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.

Note 13 — 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 and the 2022 Plan, to the extent dilutive. For all periods presented, these potential shares were excluded from the calculation of diluted loss per share because their inclusion would be anti-dilutive. As a result, diluted loss per common share is the same as basic loss per common share for all periods presented.

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

Note 14 — Income Taxes

Our income before provision for (benefit from) income taxes for the years ended December 31, 2025 and 2024 was as follows:

The benefit from income taxes was as follows:

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:

A reconciliation of the provision for income taxes with the amounts computed by applying the Federal income tax rate to income from operations before the provision for income taxes is as follows for the years ended December 31, 2024:

There was no cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024, respectively.

The components of deferred tax assets (liabilities) were as follows:

As of December 31, 2025, the Company has federal net operating loss carryforwards of approximately $11.9 million and state net operating loss carryforwards of approximately $13.4 million which can be carried forward indefinitely. As of December 31, 2024, the Company had federal net operating loss carryforwards of approximately $12.0 million and state net operating loss carryforwards of approximately $12.9 million. The valuation allowance on our net deferred tax assets increased by $1.4 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively. The changes in valuation allowances during the years ended December 31, 2025 and 2024 were primarily due to the net operating losses generated by the Company and stock compensation awarded. Deferred tax assets for net operating loss carryforwards are fully offset by a valuation allowance.

We have taken current and potential future expirations into consideration when evaluating the need for valuation allowances against these deferred tax assets. A valuation allowance for deferred tax assets is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of federal tax liabilities during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which our deferred tax assets are deductible, we believe it is more likely than not that we will not realize the benefits of these deductible differences. We have recorded a valuation allowance for deferred tax assets of $5,937,086 and $4,582,120 as of December 31, 2025 and 2024.

The Company applies the FASB’s provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. As of December 31, 2025 and 2024 we havenot accrued for any interest and penalties on our unrecognized tax benefits.

We file income tax returns in the U.S., Florida and foreign jurisdictions. We are currently not under examination by the Internal Revenue Service (“IRS”). All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2021 and subsequent tax years remain subject to examination in U.S. and Florida jurisdictions. Our returns for 2023 and subsequent tax years remain subject to examination in foreign jurisdictions.

As of December 31, 2025, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.

Note 15 — Segments

ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and annually regarding significant and material aspects regarding revenue, related cost of revenue and general and administrative expense. All material operating sub-units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics and nature of services.

The Company has determined that the assets of the reporting segments, which consist primarily of cash, accounts receivable and intangible assets, do not provide operationally significant information due to the service nature of the business 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 consolidated financial statements. The following represents the information for the Company’s reportable segments for the years ended December 31, 2025 and 2024, respectively.

In addition to the expenses from these segments corporate expenses were $23,508,839 and $9,677,724, which resulted in the net loss of $30,410,422 and $14,349,996 for the years ended December 31, 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 years ended December 31:

Note 16 — Commitments and Contingencies

The Company has entered into indemnification agreements with the Company’s officers and directors for certain events or occurrences. The Company maintains a directors and officers insurance policy to provide coverage in the event of a claim against an officer or director.

Nasdaq Listing Rule

On October 10, 2024, the Company received a letter from Nasdaq notifying the Company that it was no longer in compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq under the Bid Price Rule. Nasdaq has granted the Company 180 calendar days, or until April 8, 2025, to regain compliance with the Bid Price Rule. On April 9, 2025, Nasdaq notified the Company that Nasdaq’s Staff has determined that the Company is eligible for an additional 180 calendar day period, or until October 6, 2025, to regain compliance. The Company implemented an 80-for-1 reverse stock split effective July 7, 2025, which increased the trading price of its common stock. Following the reverse split, the Company regained compliance with the Nasdaq Bid Price Rule by maintaining a closing bid price of at least $1.00 per share for the required ten consecutive trading days. Nasdaq formally confirmed that the Company had regained compliance on July 21, 2025.

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. Original mediation was scheduled for August 25, 2025, with a second mediation set for April 28, 2026. Discovery is proceeding and the trial is set for October 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.

On March 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit in Osceola County, Florida Circuit Court alleging claims for breach of contract, promissory estoppel, conversion, unjust enrichment, breach of good faith and fair dealings, fraud in the inducement, and to recover alleged unpaid compensation in the amount of $100,000 from the Company. The Company strongly opposed and denied these claims. Original partial mediation occurred on September 5, 2025. A second mediation is expected to be set in the near future. The case trial is scheduled for April 2027. The Company denies the merits of the claims and intends 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. In March of 2026 discovery and depositions began. The case remains pending.

On January 13, 2026, Martin Scott CFO Consulting Services, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach of contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and is owed unpaid fees of approximately $29,000 and legal expenses. The Company settled this lawsuit on April 20, 2026 for the amount of $22,000.

On January 30, 2026, La Rosa Holdings Corp. and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa in the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando, action for conversion against Reinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4, 2026.

On February 1, 2026, Stacy-Ann Blair and Delroxry Blair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that La Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest. The plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages of approximately $9,600. The Company filed a motion to dismiss, which was further amended. A case management conference is being scheduled for July-August 2026 and the mediation is set for July 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.

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 17 — Related Party Transactions

The Company leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December 31, 2025 and 2024 were $147,600 and $142,602, respectively. There are no future minimum rental payments, and the lease may be cancelled at any time by either party.

On July 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, the Company’s former member of the Board. There was a written lease, which included a minimum monthly rent of $4,593, with a term that ended in June 2025. As of the date of this Report, that agreement continues on a month-to-month basis under its original terms.

Note 18 — Subsequent Events

November 2025 Securities Purchase Agreement Initial Closing

On January 8, 2026, the Company consummated the Initial Closing under the Purchase Agreement dated November 12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “January 2026 Initial Note”), for an aggregate purchase price of $9,900,000. The January 2026 Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears which commenced on February 1, 2026, matures twenty-four (24) months from the date of issuance (January 8, 2028) and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the January 2026 Initial Note. As long as certain conditions specified in the January 2026 Initial Note are met, the Company has the right to pay interest in cash, shares of the Company’s Common Stock or any combination thereof. If the Company elects to pay interest in shares of the Company’s Common Stock, the number of shares will be determined based on a conversion price equal to the lower of (a) the conversion price then in effect (initially $0.8347) and (b) the greater of the Floor Price (initially $0.778) and 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the delivery of the interest payment notice.

The Initial Note is convertible at the Investors’ option into the Conversion Shares of the Company’s Common Stock, par value $0.0001 per share, at an initial conversion price equal to the lower of (a) $0.8347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the Floor Price of $0.778, and (b)90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the Conversion Date. In addition, the Investors’ may elect an Alternate Conversion at any time, based on the Alternate Conversion Price equal to the lower of (a) the conversion price then in effect (initially $0.8347) and (b) the greater of the Floor Price (initially $0.778) and 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the Conversion Date. If an Alternate Conversion is elected, and the Conversion Floor Price Condition (as defined in the Purchase Agreement) is met, the Company will also deliver to the Investors cash equal to (a) the VWAP of the Common Stock on the trading day immediately preceding the conversion multiplied by (b) the difference between the number of shares actually received by the Investors in the conversion and the number of shares that would have been received by the Investors if the Floor Price had not been in effect.

The January 2026 Initial Note also provides the Investors with the right to redeem all or a portion of the January 2026 Initial Note (either optionally or automatically) upon the occurrence of certain specified events, at a redemption price which includes a 120% premium. The Company also has the right to call the January 2026 Initial Note at any time, with the redemption price also including the 120% premium.

The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto as a digital 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 Super Voting 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 Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.

The Company has performed an assessment of the accounting impact of the January 2026 Initial Note, which will be more fully disclosed in the Company’s Form 10-Q for the quarter ended March 31, 2026. After evaluating the embedded features of the January 2026 Initial Note, the Company made an election to account for the Note under the fair value option. The Company’s preliminary estimate of the fair value of the January 2026 Initial Note is $15,100,000 as of its issuance date. Further, as noted above, $500,000 in net proceeds were utilized to acquire Note Purchased Crypto, initially consisting of certain ‘stablecoin’ crypto assets which are designed to maintain a 1:1 pricing relationship with one U.S. Dollar. Subject to the Token Rights Agreement,50% of the tokens acquired using the $7,500,000 in net proceeds can be requested to be delivered to the Investors with no further consideration required (with the number of tokens acquired equating to 3,750,000). The Company has determined that the obligations under the Token Rights Agreement represent a derivative financial instrument, and have preliminarily estimated the fair value of such obligation to be approximately $3,750,000 upon the Initial Closing. In order to recognize both the January 2026 Initial Note and the obligation under the Token Rights Agreement derivative liability at their respective fair values at issuance (and in relation to the net proceeds received), the Company recorded a loss on issuance of the instruments, preliminarily estimated to be approximately $9,200,000.

Redemption of Series X Super Voting Preferred Stock

On January 8, 2026, concurrent the Initial Closing and pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company. Of the initial $2,000,000 Fixed Redemption Price described in the Redemption Agreement, the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa $1,700,000 in cash immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa. The remaining $500,000 Contingent Redemption Price associated with the repurchase remains subject to the satisfaction of the conditions outlined in the Redemption Agreement.

November 2025 Securities Purchase Agreement and Token Rights Agreement Amendments

On March 24, 2026, the Company and the Investor entered into an amendment to the Purchase Agreement. The primary purpose of this amendment was to revise the allocation or utilization of net proceeds obtained by the Company from any further equity line of credit, equity purchase facility, or at-the-market offering, such that the net proceeds shall be allocated as follows: (i) until such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $751,221 in deferred fees (1)20% to pay any outstanding deferred fees due to the Advisors, (2)40% to acquire Note Purchased Crypto (as defined in the SPA) as a digital asset for the Company’s balance sheet, and (3) the remaining 40% for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), and (ii) thereafter (1)50% of the net proceeds shall be used to acquire Note Purchased Crypto as a digital asset for the Company’s balance sheet and (2) the remaining 50% of the net proceeds shall be used for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), including payment of an additional $77,000 in deferred fees to the Advisors due and payable not earlier than December 31, 2026. The amendment to the Purchase Agreement did not have any effect on the terms of the January 2026 Initial Note described above.

On March 24, 2026, the Company and the Investor entered into an amendment to the Token Rights Agreement, under which the Investor will be entitled to receive an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of each closing under the Purchase Agreement and (ii) fifty six and one quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of any Other Financing (as defined in the Token Right). The amendment to the Token Rights Agreement did not have any additional effect on the terms of the Token Rights Agreement and obligations described above.

Securities Purchase Agreement Initial Closing

On January 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Purchase Agreement dated November 12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right (as defined in the Initial 8-K), for an aggregate purchase price of $9,900,000.

The Initial Note is convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at an initial conversion price equal to $0.8347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $0.778 (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears which commenced on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.

As a condition to the Initial Closing as provided in the Purchase Agreement: (i) on December 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation in order to expressly permit the Company to redeem shares of its Series X Super Voting Preferred Stock as described in the Initial 8-K, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account Control Agreement as described in the Initial 8-K.

The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a digital 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 Super Voting Preferred Stock pursuant to the Redemption Agreement (as defined in the Initial 8-K), (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 Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.

On the Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the Redemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.

Land Purchase

On February 4, 2026 , the Company entered into an agreement (the “Agreement”) with Veras Nova, LLC, a Florida corporation (“Seller”), pursuant to which, the Company agreed to purchase and the Seller agreed to sell a parcel of land located at 2570 AmeraTrails Lot 6D Saint Cloud, FL 34772 (the “Property”). The Company intends to develop a Tier III AI data center at the Property.

The purchase price of the Property is $675,000, which includes an initial earnest money deposit of $10,000 (the “Earnest Money”). The Company and the Seller have agreed to consummate the transactions contemplated by the Agreement on June 15, 2026, subject to the closing conditions set forth in the Agreement, including the determination by the Company, in its sole discretion, that the Property is suitable for the Company.

The Agreement contains representations, warranties, and closing conditions that are customary for transactions of this type. The Agreement provides for a customary inspection period ending on 75th day after the Effective Date (the “Due Diligence Period”), and the Company has the right to terminate the Agreement upon written notice to the Seller within the Due Diligence Period. In the event of such termination by the Company, the Earnest Money will be returned to the Company.

The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the form of the Agreement which is filed as Exhibit 10.142 to this Current Report on Form 8-K and incorporated herein by reference.

Disposition of Membership Interest in LR Kissimmee

On January 19, 2026, the Company entered into waiver agreements with certain accredited investors (the “Investors”) party to that certain SPA with the Company, dated as of February, 4, 2025, as amended, or that certain Purchase Agreement with the Company, dated as of November 12, 2025, as amended, in connection with the Company’s proposed sale of its 51% interest (the “Company’s LR Kissimmee Interest”) in Horeb Kissimmee Realty LLC, a Florida limited liability company (“LR Kissimmee”), to the owner of the remaining 49% interest (the “Purchaser”).

On February 4, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership Interest Purchase Agreement (the “Sale Agreement”) by and among the Company, the Purchaser and LR Kissimmee. Under the Sale Agreement, the Company will receive from the Purchaser aggregate cash consideration for the Interest of $500,000, payable in twelve (12) equal monthly installments of $41,666.67, which commenced on February 28, 2026. In addition, the Purchaser agreed to pay the Company $61,200, representing the Company’s pro rata share of an outstanding loan previously made by LR Kissimmee to the Purchaser, payable in four (4) equal quarterly installments of $15,300 commencing on the same date.

The sale is subject to customary conditions, including receipt of the Investors’ waivers of the rights under the SPAs and related transaction documents. As a result of the closing of the Transaction, the Company fully withdrew as a member of LR Kissimmee and has no continuing ownership interest therein.

Acquisition of Membership Interest in LR Lakeland

On February 10, 2026, the Company entered into a waiver agreement with certain accredited investors (the “Investors”) party to that certain securities purchase agreement with the Company, dated as of November 12, 2025, as amended, in connection with the proposed acquisition by the Company of the remaining 49% interest (the “Interest”) in its 51% subsidiary, La Rosa Realty Lakeland LLC, a Florida limited liability company (“LR Lakeland”), that it did not own from the holder thereof (the “Seller”).

On February 11, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership Interest Purchase Agreement (the “Purchase Agreement”) and a Settlement Agreement (the “Settlement Agreement”, and together with the Purchase Agreement, the “Agreements”) by and among the Company, Joseph La Rosa, the Chief Executive Officer of the Company, the selling member (the “Seller”) of La Rosa Realty Lakeland LLC, a Florida limited liability company (“Lakeland”), and Lakeland.

Pursuant to the Agreements, the Company acquired from the Seller all of his 49% membership interest in Lakeland for aggregate cash consideration of $350,000 (the “Purchase Price”), consisting of (i) an initial payment of $150,000 paid within ten (10) days following the closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments of $16,666.67 which commenced on March 1, 2026. As a result of the closing of the Transaction, Lakeland became a wholly owned subsidiary of the Company. The Agreements contain customary representations, warranties, covenants and mutual releases.

In addition, under the Settlement Agreement, the Seller agreed not to sell more than 5,000 shares of the Company’s common stock per calendar month prior to the earlier of (i) receipt by the Seller of the full Purchase Price, and (ii) such date as the Company’s common stock has a closing price of $5.00 or more for twenty (20) consecutive trading days, as reported by the Nasdaq Stock Market.

As part of the closing of the Transaction, on February 11, 2026, the Company and the Seller also entered into a Pledge Agreement (the “Pledge Agreement”) pursuant to which, as a security for the unpaid portion of the Purchase Price, the Company granted the Seller a perfected, first-priority security interest in a non-voting 28% economic membership interest in Lakeland.

Securities Purchase Agreement

On March 4, 2026, the Company, and an institutional investor (the “Investor”) entered into a securities purchase agreement pursuant to which the Company issued to the Investor 100 shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share (“Series C Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series C Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada.

Series C Preferred Stock

No Dividends; Voting Rights

The Series C Preferred Stock bears no dividends. The Series C Preferred Stock has no voting rights except as required by Nevada law and except if the Company proposes to: (a) amend or repeal any provision of, or add any provision to, its articles of incorporation (the “Certificate of Incorporation”) or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit of the Series C Preferred Stock, regardless of whether any such action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series C Convertible Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock (as each term is defined in the Certificate of Designation); (d) purchase, repurchase or redeem any shares of Junior Stock (as defined in the Certificate of Designation) (other than pursuant to the terms of the Company’s equity incentive plans and options and other equity awards granted under such plans (that have in good faith been approved by the Company’s board of directors)); (e) pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any additional shares of Series C Preferred Stock; or (g) whether or not prohibited by the terms of the Series C Preferred Stock, circumvent a right of such shares under the Certificate of Designation.

Conversion Rights

Subject to the Maximum Percentage (as hereinafter defined), holders of outstanding shares of Series C Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount (as hereinafter defined) thereof into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at the Conversion Rate (as hereinafter defined). For such purpose: (i) “Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Transaction Documents (as defined in the Securities Purchase Agreement); (ii) “Conversion Rate” means the amount determined by dividing (x) such Conversion Amount by (y) the Conversion Price; and (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) $1.176 per share (subject to adjustment), or (B) the “Alternate Conversion Price”. As used herein, “Alternate Conversion Price” means the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the greater of (x) the “Floor Price” of $0.196 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y)90% of the lowest VWAP (as defined in the Certificate of Designation) of the Common Stock during the ten (10) 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 C 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 C Preferred Stock shall not have the right to convert any portion of their Series C Preferred Stock to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”).

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 C Preferred Stock then in effect, the Conversion Price of the Series C Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.

Company Optional Redemption Rights

Under the Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series C Preferred Stock at a price equal to the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate 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 C 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.

Departure and Appointment of the Board Members

On February 5, 2026, Michael La Rosa resigned from the Board, and upon recommendation of the Nominating Committee, on February 10, 2026, the Board appointed Mr. Jaime Cosculluela as a member of the Board.

Amendments to CEO and COO Employment Agreements

On February 19, 2026, with the approval of its Board, the Company entered into (i) an Amendment (the “CEO Amendment”) to its Amended and Restated Employment Agreement, dated November 12, 2025, between the Company and Joseph La Rosa, the Company’s Chief Executive Officer, and (ii) an Amendment (the “COO Amendment”) to its Employment Agreement, dated January 31, 2024 (the “COO Employment Agreement”), between the Company and Deana La Rosa, the Company’s Chief Operating Officer.

Under the CEO Amendment, Mr. La Rosa agreed to a reduction in his base salary from $500,000 to $200,000 per annum, in consideration of which the Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022 (the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were effective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the CIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.

Under the COO Amendment, the COO agreed to a reduction in her base salary from $250,000 to $100,000 per annum, in consideration of which the Company agreed to revise certain restrictive covenants of the COO Employment Agreement so that Mrs. La Rosa’s non-competition restrictions were effective only during the term of her employment with the Company, and the period of non-solicitation restriction was reduced from twenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026.

Acquisition of Remaining Interest in Orlando

On April 3, 2026, the Company, La Rosa Realty Orlando LLC, a majority owned subsidiary of the Company(the “Orlando”), and two selling members of Orlando (collectively, the “Sellers”), entered into a settlement agreement (“Settlement Agreement”), pursuant to which, each of the Sellers sold their 24.5% membership interests (collectively, the “Interests”) in Orlando to the Company, and the Company agreed to (i) forgive the amount of $106,447 allegedly owed by one of the Sellers to Orlando, (ii) forgive the alleged $152,295 franchise fee obligation under one of the Seller’s personal guaranty, (iii) pay one of the Sellers the amount of $10,000, and (iv) dismiss without prejudice the civil suit of La Rosa Realty Corp., La Rosa Realty Orlando LLC v. Reinaldo Zapata, Viviana Figueroa, pending in the Circuit Court of Orange County, Florida. As a result of this transaction, Orlando became a wholly-owned subsidiary of the Company.

Equity Issuances

From January 29, 2026 through February 5, 2026, the holder of our Senior Secured Convertible Note converted out the remaining principal, interest and premium on the Note in exchange for 104,321 shares at a weighted average price of $51.25 per share.

From January 9, 2026, through the date of filing, the holder of the Series B preferred shares converted 5,721 of their preferred shares for a total of 956,042 common shares representing a total value of $6,644,609 at a weighted average share price of $6.95.

From January 9, 2026 through the date of filing the Company utilized their Equity Purchase Facility and sold 531,180 shares of common stock for a weighted average price of $8.61 raising a total of $4,574,237. The capital raised was allocated in line with the Purchase Agreement in place as well as the amendment to the Purchase agreement respectively for each draw. The capital was allocated with $3,522,191 going to the crypto wallet, $814,197 being brought into the business for working capital uses, and $237,849 being utilized to pay down placement agent payables.

On February 17, 2026, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 3,500 shares of the Company’s common stock for services rendered.

The remaining 75 shares were made up of small quantity transactions that are not material enough to disclose separately, a portion of these are shares that have vested from RSU’s grants.

Nasdaq Notice Regarding Filing Deficiencies

On April 16, 2026, the Company received a notice (the “10-K Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Comprehensive Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, they can grant an exception of up to 180 calendar days from the Initial Delinquent Filing’s due date (or until October 12, 2026) to regain compliance.

On May 21, 2026, the Company also received a notice (the “10-Q Notice,” and together with the 10-K Notice, the “Notices”) from the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remains delinquent in filing its Initial Delinquent Filing. The 10-Q Notice further states that, in accordance with Nasdaq rules and as previously communicated in the 10-K Notice, the Company has until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, any exception granted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026, to regain compliance.

The Notices have no immediate effect on the listing or trading of the Common Stock, which will continue to trade on The Nasdaq Capital Market under the symbol “LRHC.” The Company intends to regain compliance with Nasdaq Listing Rule 5250(c)(1) by filing the delinquent reports and/or submit the plan with Nasdaq by June 15, 2026.

Series D Preferred Stock Financing

On May 27, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 250 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series D Preferred Stock with the Secretary of State of the State of Nevada. Pursuant to the agreement, the remaining 250 shares of Series D Preferred Stock may become issuable by the Company to the Investor at its sole option upon the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.