{"url_path":"/sec/lrhc/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-04","source_url":"https://www.sec.gov/Archives/edgar/data/1879403/0001213900-26-065276-index.html","accession_number":"0001213900-26-065276","cik":"0001879403","ticker":"LRHC","issuer_name":"La Rosa Holdings Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1879403/0001213900-26-065276-index.html","primary_entity_key":"0001879403","primary_entity_name":"La Rosa Holdings Corp."},"word_count":14620,"has_tables":true,"body_markdown":"** **\n\n**Item\n1. Business.**\n\n \n\n**Overview**\n\n \n\nWe\nare the holding company for six agent-centric, technology-integrated, cloud-based, multi-service real estate segments.\n\n \n\nOur\nbusiness was founded by Mr. Joseph La Rosa, a successful real estate developer, business and life coach, author, podcaster, and public\nspeaker. Mr. La Rosa’s self-help book “Do It Now” is a roadmap to personal success and well-being based on his transformative\ntheories of family, passion and growth. His philosophy, seminars and educational forums have attracted numerous successful realtors that\nhave spurred the growth of our business.\n\n \n\nIn\naddition to providing person-to-person residential and commercial real estate brokerage services to the public, we cross-sell ancillary\ntechnology-based products and services primarily to our sales agents and the sales agents associated with our franchisees. Our business\nis organized based on the services we provide internally to our agents and to the public, which are residential and commercial real estate\nbrokerage, franchising, real estate brokerage education and coaching, property management, and title services. Our real estate brokerage\nbusiness operates primarily under the trade name La Rosa Realty. We have 23 La Rosa Realty corporate real estate brokerage offices and\nbranches located in Florida, California, Texas, Georgia, and Puerto Rico. The Company also has 5 La Rosa Realty franchised real estate\nbrokerage offices and branches and 3 affiliated real estate brokerage offices, that pay us fees in 7 states in the United States\nand Puerto Rico.  We also have LR Realty Spain, which is a full-service brokerage office located primarily in Malaga, Spain. Additionally,\nthe Company has a full-service escrow settlement and title company in Florida, and a company offering a commission advancement program\nexclusively for La Rosa agents.\n\n \n\nOur\nreal estate brokerage offices, both corporate and franchised, are staffed with 2,842 licensed real estate brokers and sales associates as\nof May 31, 2026.\n\n \n\nOur\nfranchised offices are currently:\n\n \n\n**Name**\n \n**Location**\n\nLa\nRosa Realty Internacional, LLC\n\n \nCelebration,\nFlorida\n\nLa\nRosa Realty Central Florida, LLC\n \nDavenport,\nFlorida\n\nLa\nRosa Realty Jacksonville, LLC\n \nJacksonville, Florida\n\nLa\nRosa Realty Kendall, LLC\n \nMiami,\nFlorida\n\nThe\nRealty Experience Powered By LRR LLC\n \nSt.\nCloud, Florida\n\n \n\nWe\nhave built our business by providing the home-buying public with well-trained, knowledgeable realtors who have access to our proprietary\nand third-party in-house technology tools and quality education and training, and valuable marketing that attracts some of the best local\nrealtors who provide value-added services to our home buyers and sellers that are attracted to our brands. We give our real estate brokers\nand sales agents who are seeking financial independence a turnkey solution and support them in growing their brokerages while they fund\ntheir own businesses.\n\n \n\nOur\nagent-centric commission model enables our sales agents to obtain higher net commissions than they would otherwise receive from many\nof our competitors in our local markets. They can then use these additional commissions to reinvest in their businesses or as take-home\nprofit. We believe that this is a strong incentive for them to compete against the discount, flat fee and internet brokerages that have\nsprung up in the past several years. Instead of us taking a greater share of their income, our agents pay what we believe to be reduced\nrates for training and mentorship and our proprietary technology. Our franchise model has a similar pricing methodology, permitting the\nfranchise owner the freedom to operate their business with minimal control and lower expense than other franchise offerings.\n\n \n\nMoreover,\nwe believe that our proprietary technology, training, and the support that we provide to our agents at a minimal cost to them is one\nof the best offered in the industry.\n\n \n\nOur\nbusiness stands on three pillars: Family, Passion, and Growth. We believe that our support and philosophy have attracted and will continue\nto attract and retain the highest producing realtors in our local markets. We believe that our focus on the interaction between our human\nagents and their clients is a strong weapon against internet-only commodity websites and the low touch discount brokerages. Our agent\ncount continues to grow organically and through acquisition. We attribute our organic growth to the positive culture created in our Company\nand the competitive plans that we offer our agents. By creating a custom solution and a unique experience, we believe that our agents\nare able to guide their clients seamlessly through what may be their most expensive lifetime purchase.\n\n \n\n1\n\n \n\n \n\nIn\naddition, a significant driver of our past growth was, and, we believe, of our future growth is our ability to create revenue by referring\nor requiring that our agents and our franchisee agents use the different business services that we provide. For example, all agents new\nto our Company are required to have a “coach” and to attend multi-day training sessions to learn the Company’s philosophy,\ntechnology and business practices. Concurrently, the agent works with their coach in obtaining listings, working with consumers and closing\ntransactions. All of these activities are run through our La Rosa Coaching, LLC subsidiary that teaches advanced techniques for team\nbuilding, personal growth and business development, which we believe will enhance our revenue at a nominal increase in cost to us. In\naddition, unlike other residential real estate brokerages, we encourage our sales agents to pursue commercial real estate transactions\nand require them to utilize the services of our commercial real estate company. We anticipate acquiring other complementary businesses,\nsuch as, for example, insurance agencies and a mortgage brokerage, in the future to enhance our gross revenues and profit margins.\n\n \n\nOn\nOctober 12, 2023, we consummated our initial public offering (the “IPO”). Since then, we acquired majority ownership of the\nfollowing franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee\nRealty, LLC, La Rosa Realty Georgia LLC, La Rosa Realty California, and La Rosa Realty Success LLC and 100% ownership of the following\nfranchisees of the Company: La Rosa Realty Orlando, LLC, La Rosa Realty Premier, LLC, La Rosa CW Properties, LLC, La Rosa Realty North\nFlorida LLC, La Rosa Realty Winter Garden LLC, BF Prime LLC, FPG Title Group, LLC (formerly, Nona Title Agency LLC), La Rosa Realty Lakeland\nLLC (DBA La Rosa Realty Prestige), La Rosa Realty Beaches LLC, and Baxpi Holdings LLC. In December 2023, we also formed our majority\nowned subsidiary La Rosa Realty Texas LLC. In December 2024, we opened our first office and wholly owned subsidiary in North Carolina,\nLa Rosa Realty NC LLC. In January 2025, we formed LR Luxury, LLC, engaged mostly in the residential real estate brokerage business.\nIn April 2025, we formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents. In March 2025,\nwe also formed LR Realty Spain, S.L., our wholly owned subsidiary in Spain.\n\n \n\nDuring\nthe fiscal year ended December 31, 2025, in an effort to simplify our corporate structure, we dissolved Baxpi Holdings LLC, which was\nnon-operational, La Rosa Realty NC LLC, which was not profitable, and La Rosa Realty Success LLC, agents of which were moved to La Rosa\nCW Properties LLC. In February 2026, we also sold our majority interests in Horeb Kissimmee Realty, LLC to the minority member of that\nentity.\n\n \n\nThe\nfollowing are selected developments in our business since the beginning of the fiscal year ended December 31, 2025:\n\n \n\n-In\nJuly 2025, we entered into a strategic agreement with The Agency Dominican Republic (“TADR”),\nsecuring rights for its agents to act as co-brokers to market and sell units of the IBIS\nRomana Bayahibe (“IBIS”) project in Dominican Republic, and exclusive rights\nfor any sales of IBIS in Puerto Rico. Located in Bayahibe, La Romana, Dominican Republic,\nIBIS is a luxury residential and resort-style real estate development company. As part of\nthe agreement, we will participate in sales of IBIS in Dominican Republic and serve as the\nexclusive sales agent for any sales of IBIS in Puerto Rico. In connection with this agreement,\nwe intend to provide targeted sales strategies to a high-potential Latin American and Caribbean\nbuyer base.\n\n \n\n \n-\nIn\nJuly 2025, the Company announced the launch of My Agent Account (“MAA”) Version 4.0, a major enhancement to the Company’s\nproprietary agent platform. The new version features a fully integrated Transaction Management module that is intended to deliver\nsignificant cost savings to the Company by reducing manual processes and eliminating reliance on third-party systems. MAA was designed\nto empower agents with a comprehensive suite of tools and resources. Serving as a centralized hub, it enables agents by streamlining\ndaily operations, consolidating essential business tools, and reducing administrative workload. With the introduction of the new\ntransaction module, the Company has significantly improved the platform’s ability to manage workflows. All La Rosa agents pay\nan annual subscription fee to have access to MAA.\n\n \n\n-In\nthe last quarter of 2025, we also initiated a strategic repositioning toward expansion into\nthe AI ecosystem, through strategic acquisitions, partnerships, and development of next-generation\ndata center infrastructure for AI computing. The management of the Company is currently evaluating\nstrategic opportunities and transactions aligned with its AI data center strategy.\n\n \n\n2\n\n \n\n \n\nWe\nintend to continue growing our business organically and through acquisition. It is management’s intention to consider additional\nacquisition and/or merger targets through the remainder of 2026. We cannot guarantee that the Company will actually enter into any binding\nagreements with any of those targets. If we do, we cannot assure you that the terms of such transactions will be substantially the same\nor better for the Company than those of completed acquisitions.\n\n \n\n**Recent Events\nand Financings**\n\n \n\n*ATM\nOffering*\n\n* *\n\nOn\nNovember 22, 2024, the Company entered into a sales agreement (“ATM Agreement”) with A.G.P./Alliance Global Partners, as\nsales agent (“AGP”), relating to the sale of Common Stock. During the year ended December 31, 2025, the Company issued an\naggregate of 3,871 shares of Common Stock pursuant to such ATM Agreement for net proceeds of $7,496,361. The Company paid the sales agent\ncompensation with respect to sale of such shares in the amount of $284,031. \n\n* *\n\n*Increase\nof the Authorized Stock*\n\n* *\n\nOn\nFebruary 4, 2025, the Board of Directors, and the stockholders holding a majority of the voting power of the Company, approved the Certificate\nof Amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of the Company’s authorized\nshares of Common Stock to 2,000,000,000 shares of Common Stock. Such an increase became effective on June 2, 2025.\n\n \n\n*February\n2025 Financing and June 2025 Exchange Agreement*\n\n \n\nOn\nFebruary 4, 2025, the Company entered into a securities purchase agreement with an institutional investor (“2025 Investor”)\npursuant to which it issued and sold to the 2025 Investor: (i) a Senior Secured Convertible Note in the original principal amount of\n$5,500,000 which matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants\n(the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise\nprice of $2,256,250, in substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”).\nThe Company received gross proceeds of $4,963,750 in this financing and used them to pay-off certain indebtedness, pay certain outstanding\nfees and expenses, and general corporate purposes.\n\n \n\nOn\nJune 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the 2025 Investor entered into, and\nclosed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant\nto which (among other things) the 2025 Investor surrendered and exchanged all of its Incremental Warrants in exchange for 6,000 shares\nof the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). On\nthe same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the\n“Certificate of Designation”) with the Secretary of State of the State of Nevada. On June 26, 2025, the Company and 2025\nInvestor signed Amendment No. 1 to the Initial Note to correct an administrative error in the definition of maturity date and alternate\nconversion price in the Initial Note. The 2025 Investor fully converted the Initial Note and the Company issued the 2025 Investor an\naggregate of 8,965 shares of Common Stock upon such conversion, including 8,215 shares in 2025 and 750 shares in the first quarter of\n2026. \n\n \n\n*Stock\nRepurchase Program*\n\n* *\n\nOn\nApril 23, 2025, the Board approved a new Share Repurchase Program, authorizing the Company to purchase up to an aggregate of $500,000\nof the Company’s outstanding shares of Common Stock in the open market. The Company did not use this program, and it expired on\nDecember 31, 2025.\n\n* *\n\n3\n\n \n\n \n\n*Change\nof Auditor*\n\n* *\n\nOn\nNovember 1, 2024, CBIZ CPAs P.C. (“CBIZ CPAs”) acquired the attest business of Marcum. On April 29, 2025, the Company was\nnotified by Marcum LLP (“Marcum”) that Marcum resigned as the Company’s independent registered accounting firm effective\nimmediately, and the Company, with the approval of the Audit Committee accepted such resignation and engaged CBIZ CPAs to serve as the\nCompany’s independent registered public accounting firm for the fiscal year ending December 31, 2025 to be effective immediately.\n\n \n\n*July\n2025 Reverse Stock Split*\n\n \n\nOn\nJuly 2, 2025, the Company effected a 1-for-80 reverse stock split of the Common Stock, issued and outstanding, effective as\nof 12:01 a.m. (New York time) on July 7, 2025 (“July 2025 Reverse Stock Split”). As a result of the 2025 Reverse Stock Split,\nevery eighty (80) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share\nof Common Stock.\n\n* *\n\n*Second\nAmended and Restated 2022 La Rosa Holdings Corp. Equity Incentive Plan and Amendment thereto*\n\n \n\nOn\nJuly 9, 2025, the Compensation Committee of our Board (the “Compensation Committee”), our Board of Directors, and the stockholders\nholding a majority of the voting power of the Company (by written consent in lieu of a stockholders’ meeting) approved the Second\nAmended and Restated La Rosa Holdings 2022 Equity Incentive Plan (as amended, the “2022 Plan”), pursuant to which: (i) the\ntotal number of shares of Common Stock subject to the plan was revised from 1,563 shares to 3,750 shares to ensure sufficient shares\nare available for future grants, and (ii) the term “Consultant” was clarified. The plan became effective upon effectiveness\nof its stockholders’ approval on August 11, 2025.\n\n \n\nOn December\n11, 2025, the stockholders of the Company holding a majority of the voting power approved an Amendment No. 1 to the 2022 Plan at the\nannual meeting of stockholders of the Company, pursuant to which the terms of the annual automatic share reserve increase of the 2022\nPlan were changed.\n\n \n\n*Equity\nPurchase Facility Agreement*\n\n \n\nOn\nAugust 4, 2025, the Company entered into the Equity Purchase Facility Agreement with an institutional investor (“Facility Investor”),\npursuant to which the Facility Investor committed to purchase, subject to certain conditions and limitations, up to $150 million (the\n“Commitment Amount”) in newly issued shares of the Common Stock (the “Facility”). On September 18, 2025, the\nCompany and the Facility Investor entered into the Amended Facility Agreement, pursuant to which the parties agreed to increase the Commitment\nAmount under the Facility from $150 million to $1.0 billion in shares of Common Stock. During 2025 fiscal year, the Company received\n$111,902 in net proceeds from the sale of an aggregate of 501 shares of Common Stock pursuant to the Facility.\n\n \n\n*Departure\nand Appointment of the Board Members*\n\n \n\nOn\nDecember 29, 2025, Siamack Alavi resigned from the Board, and upon recommendation of the Nominating and Corporate Governance Committee\nof the Board (“Nominating Committee”), the Board appointed Mr. Nicholas Adler as a member of the Board, effective December\n29, 2025. The Board also appointed Mr. Adler to serve as the Chairman of the Board, the Chairman of the Compensation Committee and as\na member of Board’s Audit Committee and Nominating Committee.\n\n \n\nOn\nFebruary 5, 2026, Michael La Rosa resigned from the Board, and upon recommendation of the Nominating Committee, on February 10, 2026,\nthe Board appointed Mr. Jaime Cosculluela as a member of the Board.\n\n \n\n*Convertible\nNote Facility, Redemption Agreement, and Series X Amendment to the Articles of Incorporation*\n\n \n\nOn\nNovember 12, 2025, the Company and the certain institutional investors (“Investors”) entered into the Securities Purchase\nAgreement (the “Purchase Agreement”), pursuant to which the Company agreed to, among other things, issue and sell, and the\nInvestors agreed to purchase, in multiple closings, a new series of senior secured convertible notes of the Company in an aggregate original\nprincipal amount of up to $250,000,000, subject to the satisfaction or waiver of certain closing conditions. Pursuant to the Purchase\nAgreement, on November 12, 2025, the Company issued a Token Right (the “Token Right”) to certain Investors, pursuant to which\nupon exercise of the Token Right and for no further consideration the holder will be entitled to receive an aggregate number of Right\nTokens (as defined therein) equal to the sum of (i) fifty percent (50%) of any and all Tokens (as defined in the Token Right) purchased\nby the Company using the net proceeds of each closing of the Purchase Agreement and (ii) twenty-five percent (25%) of any and all Tokens\npurchased by the Company using the net proceeds of any Other Financing (as defined therein).\n\n \n\n4\n\n \n\n \n\nIn\nconnection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption\nAgreement”), pursuant to which, on the initial closing date of the Purchase Agreement, the Company agreed to redeem and immediately\ncancel and return to the status of “blank check” preferred stock of the Company, certain number of Mr. La Rosa’s shares\nof Series X Super Voting Preferred Stock (“Series X Preferred Stock”) such that, immediately after such redemption, he will\nown shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price\nof $2,000,000 payable upon such redemption, and $500,000 contingently payable upon the satisfaction of certain conditions. Mr. La Rosa’s\nremaining shares of Series X Preferred Stock will be redeemable by the Company at a subsequent time determined by the Board or otherwise\nas set forth in the Redemption Agreement for no additional consideration. These redemptions of the Series X Preferred Stock were conditioned\nupon stockholders’ approval and effectiveness of the Certificate of Amendment to the Articles of Incorporation (the “Series\nX Certificate of Amendment”) to provide that the shares of the Series X Preferred Stock may be redeemed from time to time and at\nany time in whole or in part upon such terms and conditions as may be approved by the Board and agreed to by the holder(s) thereof. Upon\neffectiveness of respective stockholders’ approval on December 25, 2025, such Series X Certificate of Amendment was effective as\nof December 26, 2025.\n\n \n\nOn\nJanuary 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Purchase Agreement, pursuant\nto which it issued the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”),\ntogether with a previously issued Token Right, for an aggregate purchase price of $9,900,000. The Initial Note is convertible into shares\nof Common Stock, at an initial conversion price equal to $8.347, subject to adjustment as provided in the Initial Note, provided that\nin 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\nNote for the Initial Note and all other notes (together, the “Notes”) upon the effectiveness of the stockholders’ approval\nof such reduction (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable\nmonthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants\nand events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the\nInitial Note.\n\n \n\nIn\nconnection with the Initial Closing on January 8, 2026, as contemplated under the Purchase Agreement: (i) the Company and each of its\nsubsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders\nof Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”)\nwith respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined\nin the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all\nof its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such\nGrantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary\nof the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company\nguaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the\nPurchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property\nSecurity Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral\nAgent a lien and security interest in certain intellectual property of the Company. As a condition to the Initial Closing as provided\nin the Securities Purchase Agreement on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account\nControl Agreement.\n\n \n\nThe\nCompany received $9,635,000 in net proceeds from the Initial Closing, that were used as follows: (i) $7,000,000 of net proceeds to acquire\nNote Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net\nproceeds to redeem a portion of the outstanding shares of the Series X Preferred Stock pursuant to the Redemption Agreement, (iii) $500,000\nof the net proceeds to be kept in a controlled account to fund the redemption of remaining shares of the Series X Preferred Stock in\naccordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital,\nacquisitions and other strategic transactions. Curvature Securities LLC served as placement agent in connection with the offering.\n\n \n\nOn\nthe Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Preferred Stock\nheld by Mr. Joseph La Rosa, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption\nPrice (as defined in the Redemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of\nthe Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.\n\n \n\nOn\nMarch 24, 2026, the Company and Investors entered into an Amendment to the Purchase Agreement to provide that the net proceeds to the\nCompany from any further equity line of credit, equity purchase facility, or at-the-market offering shall be allocated as follows: (i)\nuntil such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate\nof $751,221 in deferred fees, (1) 20% to pay any outstanding deferred fees due to the Advisors, (2) 40% to acquire Note Purchased Crypto\n(as defined in the Purchase Agreement) as a digital asset for the Company’s balance sheet, and (3) the remaining 40% for general\ncorporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation\ndata center infrastructure for AI computing), and (ii) thereafter (1) 50% of the net proceeds shall be used to acquire Note Purchased\nCrypto as a digital asset for the Company’s balance sheet and (2) the remaining 50% of the net proceeds shall be used for general\ncorporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation\ndata center infrastructure for AI computing), including payment of an additional $77,000 in deferred fees to the Advisors due and payable\nnot earlier than December 31, 2026.\n\n \n\n5\n\n \n\n \n\nIn\naddition, on March 24, 2026, the Company and Investors entered into Amendment No. 1 to the Token Right (the “Token Right Amendment”),\nunder which the Investor will be entitled to receive upon an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%)\nof any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of each closing under the Purchase\nAgreement and (ii) fifty- six and one quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance\nDate using the net proceeds of any Other Financing (as defined in the Token Right).\n\n \n\nThe\nCompany entered into the Purchase Agreement and transactions contemplated thereby to secure immediate and committed access to capital\nat a time when alternative financing sources were either unavailable or significantly more dilutive and restrictive. The facility was\nintended to provide critical liquidity to support ongoing operations, address going concern considerations, and preserve enterprise value.\nIn addition, the Company sought to strengthen its balance sheet and position itself to deploy capital into strategic initiatives, including\ninvestments in stablecoins, A.I. infrastructure, and data center opportunities, which management believes have the potential to enhance\nlong-term shareholder value. Unlike traditional financing, the structure allows the Company to draw capital incrementally,\nproviding flexibility to align funding with operational needs and market conditions. While the transaction includes costs such as potential\ndilution and derivative liabilities, management determined that these were justified given the significant risk to the business if capital\nwas not secured. The transaction was negotiated at arm’s length and, in management’s view, represents a reasonable and necessary\nfinancing solution under the circumstances.\n\n \n\n*Amended\nEmployment Agreement with the CEO*\n\n \n\nOn\nNovember 12, 2025, following the approval of the Board and in connection with the Securities Purchase Agreement, the Company and Mr.\nLa Rosa, entered into an Amended and Restated Employment Agreement (the “Amended Employment Agreement”), amending and\nrestating that certain Amended and Restated Employment Agreement between the Company and Mr. La Rosa, dated April 29, 2022, as amended,\nin its entirety.** **Pursuant to the Amended Employment Agreement, Mr. La Rosa’s compensation structure and severance package\nwere changed as described in the agreement.\n\n \n\n*Investments in Digital Assets*\n\n \n\nAs described above, on\nJanuary 8, 2026, we consummated the Initial Closing pursuant to the Purchase Agreement. We agreed to use majority of net proceeds\nfrom the closings under the Purchase Agreement and any equity line of credit, equity purchase facility or at-the-market offering to\nacquire cryptocurrency in the form that the Investors and Company have mutually agreed to in writing as a digital asset for the\nCompany’s balance sheet. We have further agreed with the Investors that we will acquire stablecoins as these digital assets.\nSince January 1, 2026, we used net $6.7 million from the Initial Closing and $3.6 million from our equity line of credit to acquire\nstablecoins. As of May 31, 2026, we held $10.3 million primarily in the following types of digital assets: FRXUSD and USDC. Our\ncurrent strategy is to hold stablecoins to preserve the value of the initial investment. During which time we will perform\ncounterparty due diligence potentially using our digital assets for our strategic efforts towards expansion into AI data centers\necosystem. There can be no assurance as to the timing, size, form, or success of this initiative, and it involves significant risks, evolving regulation, financing dilution, and custody or cybersecurity concerns.\n\n  \n\n*January\n2026 Reverse Stock Split*\n\n \n\nOn\nNovember 10, 2025, the Company’s stockholders holding a majority of the voting power of the Company by a written consent approved\nthe amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, to effect one or more reverse stock\nsplits of the Company’s Common Stock in each case at a ratio in the range of 1-for-5 to 1-for-100, with such ratio to be determined\nby the Board (“Stockholders Approval”). Such resolution became effective on December 25, 2025, or twenty (20) days after\nthe Company filed with the SEC and mailed to its stockholders respective Information Statement on Schedule 14C on or approximately December\n4, 2025. Following such stockholders’ approval, the Company effected a 1-for-10 reverse stock split of the Common Stock,\nissued and outstanding, effective as of 12:01 a.m. (New York time) on January 26, 2026 (“January 2026 Reverse Stock Split”).\nAs a result of the January 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically\ncombined into one (1) issued and outstanding share of Common Stock.\n\n  \n\n6\n\n \n\n \n\n*Disposition\nof LR Kissimmee*\n\n** **\n\nOn\nFebruary 4, 2026, the Company sold its 51% membership interest (the “Interest”) in Horeb Kissimmee Realty LLC, a Florida\nlimited liability company (“LR Kissimmee”) to LR Kissimmee’s pre-Transaction 49% owner (the “Buyer”) pursuant\nto a Membership Interest Purchase Agreement (the “Sale Agreement”) by and among the Company, the Buyer and LR Kissimmee.\nUnder the Sale Agreement, the Company will receive from the Buyer aggregate cash consideration for the Interest of $500,000, payable\nin twelve (12) equal monthly installments of $41,667, commencing February 28, 2026. In addition, the Buyer agreed to pay the Company\n$61,200, representing the Company’s pro rata share of an outstanding loan previously made by LR Kissimmee to the Buyer, payable\nin four (4) equal quarterly installments of $15,300 commencing on the same date. As a result of the transaction, the Company has fully\nwithdrawn as a member of LR Kissimmee and has no continuing ownership interest therein. In connection with the Transaction, the Company\nalso entered into a Trademark & Brand Licensing Agreement (the “Licensing Agreement”) with LR Kissimmee, pursuant to\nwhich the Company granted to LR Kissimmee a non-exclusive, non-transferable license to use certain trademarks and branding of the Company\nin connection with LR Kissimmee’s real estate brokerage business. The Licensing Agreement provides for a flat monthly licensing\nfee payable to the Company of $4,500 and has an initial term of one (1) year.\n\n \n\n*Acquisition\nof Remaining Interest in Lakeland*\n\n \n\nOn\nFebruary 11, 2026, the Company acquired from the selling member (the “Seller”) all of his 49% membership interest in La Rosa\nRealty Lakeland LLC, a Florida limited liability company (“Lakeland”), pursuant to a Membership Interest Purchase Agreement\nand a Settlement Agreement by and among the Company, Joseph La Rosa, the Chief Executive Officer of the Company, the Seller, and Lakeland,\nfor aggregate cash consideration of $350,000 (the “Purchase Price”), consisting of (i) an initial payment of $150,000 payable\nwithin ten (10) days following the closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments\nof $16,667 commencing on March 1, 2026. As a result of the transaction, Lakeland became a wholly owned subsidiary of the Company. As\npart of the transaction, on February 11, 2026, the Company and the Seller also entered into a Pledge Agreement, pursuant to which, as\na security for the unpaid portion of the Purchase Price, the Company granted the Seller a perfected, first-priority security interest\nin a non-voting 28% economic membership interest in Lakeland.\n\n \n\n*Amendments\nto Officers Employment Agreements*\n\n \n\nOn\nFebruary 19, 2026, with the approval of its Board, the Company entered into (i) an Amendment (the “CEO Amendment”) to the\nAmended and Restated Employment Agreement, dated November 12, 2025, with Joseph La Rosa, the Company’s Chief Executive Officer\n(the “CEO”), and (ii) an Amendment (the “COO Amendment”) to the Employment Agreement, dated January 31, 2024\n(the “COO Employment Agreement”), with Deana La Rosa, the Company’s Chief Operating Officer (“COO”).\n\n \n\nUnder\nthe 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\nthe Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022\n(the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were\neffective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the\nCIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.\n\n \n\nUnder\nthe COO Amendment, Mrs. La Rosa agreed to a reduction in her base salary from $250,000 to $100,000 per annum, in consideration of which\nthe Company agreed to revise certain restrictive covenants of the COO Employment Agreement so that Mrs. La Rosa’s non-competition\nrestrictions were effective only during the term of her employment with the Company, and the period of non-solicitation restriction was\nreduced from twenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026. \n\n  \n\n*Land\nPurchase Agreement*\n\n \n\nIn\nFebruary 2026, the Company entered into a contract to acquire a strategically located parcel of land in Osceola County, one of the fastest-growing\nregions in Central Florida. Upon completion, this acquisition is expected to represent a key milestone in the Company’s expansion\nstrategy and support the development of a Tier III Artificial Intelligence (“AI”) data center designed to address increasing\ndemand for high-performance computing infrastructure. The planned facility is expected to span up to 10,000 square feet and support an\nestimated IT load of approximately 1,500 kW, positioning it to serve enterprise, cloud, and AI-driven workloads.\n\n \n\n7\n\n \n\n \n\n*Series\nC Preferred Stock Financing*\n\n \n\nOn\nMarch 4, 2026, the Company and an institutional investor (the “Investor”) entered into a securities purchase agreement pursuant\nto which the Company issued the Investor 100 shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per\nshare (“Series C Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective\nCertificate of Designation of Rights and Preferences of the Series C Preferred Stock with the Secretary of State of the State of Nevada. \n\n  \n\n*Potential\nAcquisition of Consensus Core Technologies, Inc*\n\n \n\nIn\nMarch 2026, the Company entered into a non-binding letter of intent to acquire 100% of the issued and outstanding equity interests of\nConsensus Core Technologies, Inc. (“Consensus”), along with certain of its affiliates and subsidiaries. Consensus is a provider\nof critical infrastructure solutions for AI and high-performance computing. The proposed acquisition is intended to position the Company\nat the forefront of the AI infrastructure ecosystem and provide a scalable platform to capitalize on the growing demand for AI compute\ncapacity. The consummation of this transaction is subject to, and contingent upon, the execution of a definitive agreement and other\nrelated transaction documents by the parties, corporate approval and customary closing conditions. There can be no assurances that such\ntransaction will be consummated.\n\n \n\n*Acquisition\nof Remaining Interest in Orlando*\n\n \n\nOn\nApril 3, 2026, the Company, La Rosa Realty Orlando LLC, a majority owned subsidiary of the Company (the “Orlando”), and two\nselling members of Orlando (collectively, the “Sellers”), entered into a settlement agreement (“Settlement Agreement”),\npursuant to which, each of the Sellers sold their 24.5% membership interests (collectively, the “Interests”) in Orlando to\nthe Company, and the Company agreed to (i) forgive the amount of $106,447 allegedly owed by one of the Sellers to Orlando, (ii) forgive\nthe alleged $152,295 franchise fee obligation under one of the Seller’s personal guaranty, (iii) pay one of the Sellers the amount\nof $10,000, and (iv) dismiss without prejudice the civil suit of La Rosa Realty Corp., La Rosa Realty Orlando LLC v. Reinaldo Zapata,\nViviana Figueroa, pending in the Circuit Court of Orange County, Florida. As a result of this transaction, Orlando became a wholly-owned\nsubsidiary of the Company.\n\n \n\n*Nasdaq\nNotice Regarding Filing Deficiencies*\n\n \n\nOn\nApril 16, 2026, the Company received a notice (the “10-K Notice”) from the Nasdaq Listing Qualifications Department (the\n“Staff”) that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file\nits Comprehensive Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The\nStaff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until June 15, 2026 to submit a plan to regain\ncompliance, and if the Staff accepts such plan, they can grant an exception of up to 180 calendar days from the Initial Delinquent Filing’s\ndue date (or until October 12, 2026) to regain compliance.\n\n \n\nOn\nMay 21, 2026, the Company also received a notice (the “10-Q Notice,” and together with the 10-K Notice, the “Notices”)\nfrom the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file\nits Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remains delinquent in filing\nits Initial Delinquent Filing. The 10-Q Notice further states that, in accordance with Nasdaq rules and as previously communicated in\nthe 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\ngranted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026,\nto regain compliance.\n\n \n\nThe\nNotices have no immediate effect on the listing or trading of the Common Stock, which will continue to trade on The Nasdaq Capital Market\nunder the symbol “LRHC.” The Company intends to regain compliance with Nasdaq Listing Rule 5250(c)(1) by filing the delinquent\nreports and/or submit the plan with Nasdaq by June 15, 2026. \n\n \n\n8\n\n \n\n \n\n*April\n2026 Reverse Stock Split*\n\n \n\nFollowing\nthe Stockholders Approval described above, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued\nand outstanding, effective as of 12:01 a.m. (New York time) on April 20, 2026 (“April 2026 Reverse Stock Split”). As a result\nof the April 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into\none (1) issued and outstanding share of Common Stock. Unless noted otherwise, all share and the price per share information for all periods\npresented in this report have been retroactively adjusted for April 2026 Reverse Stock Split.\n\n \n\n*Series\nD Preferred Stock Financing*\n\n \n\nOn\nMay 27, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor\n250 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”),\nfor a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences\nof the Series D Preferred Stock with the Secretary of State of the State of Nevada. Pursuant to the agreement, the remaining 250 shares\nof Series D Preferred Stock may become issuable by the Company to the Investor at its sole option upon the filing of the Company’s\nAnnual Report on Form 10-K for the year ended December 31, 2025.\n\n \n\n**Our\nOrganization**\n\n** **\n\nLa\nRosa Holdings Corp. was incorporated in the State of Nevada on June 14, 2021 by its founder, Mr. Joseph La Rosa, to become the\nholding company for five Florida limited liability companies in which Mr. La Rosa held or controlled a one hundred percent ownership\ninterest: (i) La Rosa Coaching, LLC ( “Coaching”); (ii) La Rosa CRE, LLC (“CRE”); (iii) La Rosa Franchising,\nLLC (“Franchising”); (iv) La Rosa Property Management, LLC (“Property Management”); and (v) La Rosa Realty,\nLLC (“Realty”). Coaching, CRE, Franchising, Property Management and Realty became direct, wholly owned subsidiaries of\nthe Company as a result of the closing of the Reorganization Agreement and Plan of Share Exchange dated July 22, 2021, which was\neffective on August 4, 2021. Pursuant to the Reorganization Agreement, each LLC exchanged 100% of their limited liability company\nmembership interests for one share of the Common Stock, which share was automatically redeemed for nominal consideration upon the\nclosing of the transaction, resulting in each LLC becoming the direct, wholly owned subsidiary of the Company.\n\n \n\nThe\nCompany conducts its operations through its 21 subsidiaries:\n\n \n\n \n●\nLa\nRosa Realty, LLC is engaged in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Coaching, LLC is engaged in the delivery of coaching services to our brokers and franchisee’s brokers;\n\n \n\n \n●\nLa\nRosa CRE, LLC is engaged in the commercial real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Franchising, LLC is engaged in the franchising of real estate brokerage agencies;\n\n \n\n \n●\nLa\nRosa Property Management, LLC is engaged in property management services to owners of single-family residential properties;\n\n \n\n \n●\nLa\nRosa Realty Premier, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty CW Properties, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty North Florida, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty Orlando, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nNona\nLegacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.) is engaged mostly in the residential real estate\nbrokerage business;\n\n \n\n9\n\n \n\n \n\n \n●\nLa\nRosa Realty Winter Garden, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty Texas, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty Georgia, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLa\nRosa Realty California is engaged mostly in the residential real estate brokerage business;\n\n \n \n \n\n \n●\nLa\nRosa Realty Lakeland, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nBF\nPrime, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nFPG\nTitle Group, LLC (formerly, Nona Title Agency, LLC) is engaged in providing title services related to real estate transactions;\n\n \n\n \n●\nLa\nRosa Realty Beaches, LLC is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLR\nRealty Spain S.L. is engaged mostly in the residential real estate brokerage business;\n\n \n\n \n●\nLR\nLuxury, LLC is engaged mostly in the residential real estate brokerage business; and\n\n \n\n \n●\nLR\nAgent Advance, LLC, formed in April 2025 for the purpose of offering a commission advancement program exclusively for La Rosa agents.\n \n\n \n\nWe\nare a “controlled company” as defined under the corporate governance rules of Nasdaq because our Founder, Mr. Joseph La Rosa,\nas of June 3, 2026, controls 91.81%  of the total voting power of our Common Stock based on his ownership of Common Stock and the\n18,000 votes provided by his Series X Preferred Stock, that votes with the Common Stock, with respect to director elections and other\nmatters.\n\n \n\n**Our\nBusiness**\n\n** **\n\nWe\noperate primarily in the United States residential real estate market which totaled $55.1 trillion at June 30, 2025 versus $49.7 trillion\nat the end of 2024 reflecting a half year gain of $5.4 trillion due to sufficient number of buyers competing over a relatively small\nnumber of listings, according to Redfin Corp1.\n\n \n\nThe\nCompany is the holding company for its direct, majority owned subsidiaries, and has no other operations. \n\n \n\nRealty\nwas a traditional residential real estate brokerage firm founded in 2004 by Mr. La Rosa to serve the Florida market. In 2011, Realty\nshifted to an agent-centric real estate brokerage format, offering agents more tools and value while offering experienced agents a 100%\ncommission split. Newly licensed and agents still in training operate on a New Agent Coaching (NAC) 70% to agent / 30% commission split\n(7% to Coaching, 14% to the La Rosa individual coach, 6% to the brokerage office who engaged the new agent, and 3% to the Director\nof Coaching who is employed by the Company). Alternatively, they may choose the Ultimate Plan Business Builder (“UPBB”) and\noperate on a 60% to agent / 40% that includes 10% revenue share commission split (7% to Coaching, 14% to the La Rosa individual coach, 6%\nto the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by the Company). Realty has expanded\nits geographic footprint over the years by integrating technology into its operations and creating a brokerage that provides its agents\nwith the tools to handle their transactions, accounting, marketing, social media and customer relations. Realty’s full service,\nhigh touch engagement with its clients assists them with navigating the complexity of the home purchase/sale transaction through their\nintimate knowledge of the local market, guiding them on the right pricing for their sale or purchase, assisting in the negotiation of\nthe sales contract, overseeing the home inspections and possible repairs, reviewing the financial details of the transaction to assure\nthat there are no errors and attending the closing of the sale to ensure that there are no last minute surprises. Realty believes that\nits services build referrals and repeat clients who appreciate the expertise and personal relationships that they develop with our agents.\n\n \n\n \n\n1\nhttps://zillow.mediaroom.com/2025-09-08-US-housing-market-reaches-record-55-1-trillion\n\n \n\n10\n\n \n\n \n\nIn\n2018, Mr. La Rosa organized Franchising to study the potential to expand nationally by means of creating a franchise model that would\nbe easily duplicable. Franchising began franchising real estate brokerage businesses based on its Franchise Disclosure Document filed\nwith the Federal Trade Commission in 2019 and converted several of its largest offices in Florida to “La Rosa Realty” franchises.\nFranchising also oversees and administers the offices that it sells, no matter their brand. Franchising uses the typical model for licensing\nthe use of our two brands together with our proprietary business methodology, technology, tools, and training. Our franchisees own their\nown brokerage businesses, are solely responsible for their operations and risks, and are able to retain the substantial upside of their\nbusiness if they are profitable. Our franchisees use our successful and well-known brands, our systems and technology, training and personal\nassistance and guidance to help run their businesses more efficiently and, we believe, more successfully than other branded real estate\nfranchisees. Our franchisees pay us an initial licensing fee, a royalty fee based on their gross commissions, an annual membership fee,\na coaching fee payable to Coaching for coaching services, a commercial royalty fee payable to CRE for all commercial real estate transactions,\na training fee for its administrative personnel and a fee to use our proprietary software. Because our franchise “product”\nhas been developed over the years and is delivered in a “package” format, our fixed costs are low, and our franchising gross\nmargins are relatively higher than our more labor intensive businesses. While we intend to continue the franchise arm of the business,\nwe will, in the future, concentrate on opening corporate offices that produce higher revenue and increased margins.\n\n \n\nCoaching\ngrew out of Mr. La Rosa’s life and business coaching seminars which were organized in 2019 to provide education and mentoring to\nnew real estate agents who join Realty in any of our offices. Each agent in coaching is assigned an experienced real estate agent/coach\nwho assists and advises the new agent for, at a minimum, their first three sales transactions and the successful completion of our exclusive\ncore competency courses and examinations. Brokers compensate us for the courses and mentoring by splitting their commissions with us\nwhen they are involved in the sale and purchase of a property for which we receive thirty percent (30%) of their share of the real estate\nbrokerage commission. Our franchisee brokers also take the in-house course and ongoing coaching that cover topics, including but not\nlimited to local real estate brokerage law, lead generation, recruiting, business management, industry trends, and leadership. We added\na second tier of coaching in 2021 that we believe provide business and personal growth and advanced real estate courses to our and our\nfranchisees’ agents for various fees based on the subject matter and length of the course.\n\n \n\nUnlike\nmost other residential real estate brokerage companies, we encourage our sales agents to seek out property management business. Property\nManagement, which was organized in 2014, trains our sales agents to provide residential property management services to owners of single-family\nresidential properties and provides our agents with the tools to service those property owners. These tools include management, marketing,\naccounting and financial services. Our agents generally charge the homeowners between eight to twelve percent (8-12%) of the monthly\nrental. Our agents pay Property Management to be the point of contact for the property owner and their tenants, handle all tenant screenings,\napplications, contracts, forms and documents, and deal with attorneys if necessary to enforce the agreements. We manage the collection\nof rents and the disbursement of payments to vendors, service providers, agents, and property owners, while retaining a fee of $55.00\nper agent, per property, per month. As of December 31, 2025, we have provided property management services for approximately 630 properties\nacross Florida, including single-family residences, condominiums, townhouses, and other types of residential real estate. Consistent\nwith industry custom, management contract terms typically range from one to three years, although some contracts can be terminated at\nwill at any time following a short notice period, usually 30 to 120 days, as is typical in the industry. Property Management has recently\nadded a division to directly manage properties in Florida and to expand those services to our other offices in other states in the future.\n\n \n\n11\n\n \n\n \n\nUnlike\nmany other real estate brokerages, we encourage our sales agents to seek out commercial real estate business. CRE was organized in 2014\noriginally to provide “residential-commercial” real estate advisory services such as helping sales agents’ customers\nlease office space. CRE now assists agents who have customers who wish to purchase multifamily, office, storage, mixed use and apartment\nproperties. We provide, on a fee basis, training to sales agents who wish to work in the commercial real estate space, and advise customers\nwith respect to office leasing, multi-family property sales and leasing, and land and subdivision development. Our customers come primarily\nfrom referrals from our Realty brokers who are asked by their clients to assist them in various commercial real estate property transactions.\nIn January 2025, the Company hired a leader for this division who possesses vast experience in commercial real estate. We expect stronger\ngrowth of this segment of our business in 2026 and beyond. During 2025, CRE restructured the division by focusing on training and education,\nas well as providing the agents with pertinent tools to be successful in the commercial practice. CRE invested in a platform as the standard\nto prepare listings, financial analysis, marketing materials and offering memorandums among other features. As of April 30, 2026, CRE\noperated with 76 certified commercial agents and, moving forward, recruiting will be focused on hiring seasoned commercial real estate\nagents who can bring their expertise to enrich our level of experience.\n\n \n\nFor\nour title insurance and settlement services segment, we operate under the brand FPG Title Group which provides comprehensive title insurance\nand settlement services to protect real estate transactions for residential, commercial, agency, home builders, and vacation ownership\nproperties. Providing these services, we aim to ensure that both homeowners and lenders are safeguarded against potential legal claims\nor disputes related to property ownership. Key services include title insurance services, which help to protect against risks such as\nundisclosed heirs, errors in public records, forgery or fraud in previous ownership documents, and outstanding liens or unpaid taxes,\nand settlement services, which help to facilitate smooth and secure property transactions, in compliance with industry regulations. We\nbelieve that FPG Title Group is positioned as a trusted partner in Florida, offering tailored solutions for local banks, national lenders,\nand mortgage servicers. Our expertise allows us to close loans quickly, accurately, and in full compliance with industry standards. Our\ngoal is to provide flexible and customizable services to meet the specific requirements of various lenders and demonstrate our commitment\nto client satisfaction through our comprehensive service offerings and dedicated team.\n\n \n\nWe\nhave 23 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, and Puerto\nRico. The Company also has 5 La Rosa Realty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage\noffices, that pay us fees in 7 states of the United States and Puerto Rico. We also have LR Realty Spain, which is a full-service brokerage\noffice located primarily in Malaga, Spain. Additionally, the Company has a full-service escrow settlement and title company in Florida\nand a company offering a commission advancement program exclusively for La Rosa agents.\n\n \n\nWe\nalso have a number of affiliated companies that are wholly, or majority owned by Mr. La Rosa that we refer to in this report as our affiliates.\nWhile our affiliates are not owned by us, some do use our services and contribute to our revenue stream. Our affiliates operate residential\nreal estate brokerage, insurance brokerage and real estate title and full commercial real estate brokerage businesses.\n\n \n\nIn\nthe last quarter of 2025, we initiated a strategic repositioning toward expansion into the AI ecosystem, through strategic acquisitions,\npartnerships, and development of next-generation data center infrastructure for AI computing. As demand for high-performance computing\nand Artificial Intelligence (AI)-driven applications continues to accelerate, the Company is positioning itself to capitalize on the\ngrowing need for purpose-built infrastructure. The Company intends to leverage its real estate platform to identify, develop, and manage\nhigh-quality data center assets in key markets where demand for AI infrastructure is rapidly increasing.\n\n \n\nIn\nFebruary 2026, we have entered into a contract to acquire a strategically located parcel of land in Osceola County, one of the fastest-growing\nregions in Central Florida. Upon completion, this acquisition is expected to represent a key milestone in the Company’s expansion\nstrategy and support the development of a Tier III AI data center designed to address increasing demand for high-performance computing\ninfrastructure. The planned facility is expected to span up to 10,000 square feet and support an estimated IT load of approximately 1,500\nkW, positioning it to serve enterprise, cloud, and AI-driven workloads. The project is designed to balance scale and flexibility, enabling\nthe Company to target both enterprise and regional demand while maintaining operational agility.\n\n \n\n12\n\n \n\n \n\nIn\nMarch 2026, the Company entered into a non-binding letter of intent to acquire 100% of the issued and outstanding equity interests of\nConsensus Core Technologies, Inc. (“Consensus”), along with certain of its affiliates and subsidiaries. Consensus is a provider\nof critical infrastructure solutions for artificial intelligence and high-performance computing. The proposed acquisition is intended\nto position the Company at the forefront of the AI infrastructure ecosystem and provide a scalable platform to capitalize on the growing\ndemand for AI compute capacity. The consummation of this transaction is subject to, and contingent upon, the execution of a definitive\nagreement and other related transaction documents by the parties, corporate approval and customary closing conditions. There can be no\nassurances that such transaction will be consummated.\n\n \n\n**Our\nFocus**\n\n** **\n\nOur\nMission Statement is that “we are here to support, empower and elevate those who we serve with integrity.” We are committed\nto excellence in all we do and are respectful, compassionate, trustworthy, responsible, joyful, inspiring and adaptive. At La Rosa, we\ninculcate these core values to our sales agents and employees and strive to live by them every day.\n\n \n\nWe\nbelieve home buyers and sellers choose agents because of their individual marketing prowess, professionalism, and personality. To capitalize\non this, we focus on helping our agents improve professionally and increase their financial ability to invest in their personal marketing,\nand, therefore, capture a greater percentage of customers.\n\n \n\nWe\nhave built our business on what we know to be our customers’ needs. The purchase of a home is likely the most expensive purchase\na consumer will make in his or her lifetime. Many first-time home buyers are young and require knowledgeable, experienced guidance from\nour agents and our franchisor’s agents. Home sellers need the market ken and potential buyer reach that our agents and our franchisees’\nagents provide. Our agents and our franchisees’ agents build lasting relationships with their clients that result in repeat business\nand referral business. Notwithstanding claims of the internet-only brokerages that homes are a commodity that can be bought and sold\nlike a can of beans, this consumer need is borne out in reality. The research conducted by the National Association of Realtors (the\n“NAR”)2 in 2025 shows that:\n\n \n\n \n●\n88%\nof buyers recently purchased their home through a real estate agent or broker and 5% purchased directly through the previous owner;\n\n \n\n \n●\nhaving\nan agent to help them find the right home was what buyers wanted most when choosing an agent at 50%;\n\n \n\n \n●\n92%\nof home buyers are satisfied with the buying process.\n\n \n\n \n●\n91%\nof sellers sold with the assistance of a real estate agent, up from 90% last year, and only 5% were\nFSBO sales, an all-time low;\n\n \n\nWe\nbelieve that our agents’ training, knowledge of the market, access to public and non-public data related to transactions, and experience\nwith past transactions gives them a unique insight to provide our home buyer clients with invaluable advice and judgement. Their ability\nto reach potential buyers and our relationships with other brokers, both within and without our Company and franchisors, help our seller\nclients achieve the maximum possible price for their properties.  \n\n \n\nOur\nCompany works in the present but has its eye on the future. We understand that the housing market will change over time and are focusing\non how to prepare for that change. The following chart is a projection of the past and future of home ownership rates based on age groups,\nwith the projections noting either slow or fast change.3\n\n \n\n \n\n2\n2025-profile-of-home-buyers-and-sellers-highlights-11-04-2025.pdf\n\n3\nhttps://www.urban.org/urban-wire/2040-us-will-experience-modest-homeownership-declines-black-households-impact-will-be-dramatic\n\n \n\n13\n\n \n\n \n\n \n\nAs\nthe market slows slightly in out years, we continue to increase the use of our technological tools to make our agents more efficient\nand productive.\n\n \n\n**Our\nPeople**\n\n** **\n\nOur\npeople are our most important asset. We spend significant time and effort in attracting and retaining talented people for our businesses.\nMany agents contact us after hearing of or experiencing Mr. La Rosa’s personal and business growth seminars, his book or his podcasts.\nThey are attracted to the Company because they desire to work in a diverse, inclusive, welcoming and learning environment that allows\nthe agents to attain their individual potential. The financial attraction is our ability to offer competitive salaries for our employees,\na 100% commission “split” with our experienced realtors and a 70%/30% commission split with new agents and agents still in\ntraining. Experienced agents can participate in three plans: our Ultimate Plan Business Builder with a 90%/10% split, our Ultimate Plan\nand our Premier Plan, both with 100% commission and low annual and monthly dues. In our UPBB plan, an agent can potentially participate\nin the Company’s revenue share plan rewarding an agent for the recruitment of other agents and for the additional agents these\nrecruited agents recruit. But, most importantly, we believe it is the training, education and ongoing support that we provide to our\nagents that gives them an edge in a very competitive and crowded real estate brokerage marketplace.\n\n \n\n14\n\n \n\n \n\nOur\nbusinesses emphasize diversity and inclusion in the workplace and the value of home ownership. We strive to create a workplace that is\ninclusive of everyone, where every person can be authentic, and where that authenticity is celebrated as a strength. Management works\ndiligently to make the Company a desirable place to work by creating learning experiences, programs, compensation, and benefits that\nattract, develop, train, engage, motivate, reward, and retain the best talent. With a focus on teamwork, collaboration, and diversity\nand inclusion, we aspire to be a company where the best people want to work and are engaged every day. Outside the office, our agents\ncomply and observe non-discrimination laws and policies and work with all clients to ensure that they are able to acquire the home of\ntheir dreams.\n\n \n\n**Our\nTechnology**\n\n** **\n\nWe\nprovide our agents and employees with cloud-based real estate brokerage services by utilizing our consumer-facing websites, including\nour corporate website www.larosarealty.com and our proprietary technology that provides brokerage operations management tools. When an\nagent is on-boarded, they are required to take our monthly Foundations Series which covers the use of our proprietary applications. Through\nour websites, we provide buyers, sellers, landlords, and tenants with access to all of the available properties for sale or lease on\nthe multiple listing service (“MLS”), in each of the markets in which we operate. We provide each of our Company franchisees\nand their agents with their own personal website that they can modify to match their personal branding. Our website also gives consumers\naccess to our network of professional real estate agents and vendors. Additionally, the websites we provide use AI integrated Client\nRelationship Management (“CRM”) software to enhance the consumers’ internet experience and assist our agents with lead\ngeneration and lead capture through the AI features. For example, our CRM software, which is integrated into our websites, uses artificial\nintelligence to generate marketing leads for our agents by sending marketing materials to potential buyers and sellers automatically\nwithout any agent involvement. Our technology platform also provides unique automated blogging and comprehensive social media marketing\ncampaigns for our agents to create top of mind public awareness of our brand.\n\n \n\nIn\nOctober 2023, we launched our proprietary technology system – JAEME, part of “My Agent Account,” our proprietary platform\nbuilt entirely in-house by our technology team. JAEME is a real estate AI assistant created to support and inspire our agents with personalized\ncontent to drive marketing, efficiency, and sales. This advanced technology can help agents to provide services to their clients in a\nmore efficient way – even from their mobile devices. Through JAEME, La Rosa’s agents can easily create:\n\n \n\n \n-\nCompelling\nproperty descriptions\n\n \n\n \n-\nEffective\nemail campaigns\n\n \n\n \n-\nDetailed\nbusiness plans\n\n \n\n \n-\nInnovative\nvideo scripts\n\n \n\n \n-\nHigh-conversion\nnewsletter campaigns\n\n \n\n \n-\nExclusive\nlead generation ideas\n\n \n\nAs\nof July 1, 2025, we launched My Agent Account Version 4.0, a major enhancement to the Company’s proprietary agent platform and\nofficially transitioned to a new, upgraded process designed to better support our agents with a simpler and more efficient way to manage\ntransactions and onboarding tasks. With this central hub, agents no longer need to log into multiple systems, allowing for a more seamless\nexperience. The new process enables automation of key workflows, increases productivity, and strengthens our ability to operate more\neffectively as a company.\n\n \n\nOur\nproprietary technology and third-party services and platforms provide our agents and franchisees with commission management and accounting\nsystems, an internal agent “intranet” application, customer relationship management applications, a transaction management\nsolution, and automated marketing and social media applications and privacy and identity protections. The combination of our brands,\nproprietary technology, services, data, lead generation, and marketing tools gives our agents the power to offer best-in-class service\nto their clients. The new version features a fully integrated Transaction Management module that is intended to deliver significant cost\nsavings to the Company by improving efficiency, reducing manual processes, and eliminating reliance on expensive third-party systems.\n\n \n\nInternally,\nwe use our technology to provide our Company agents, employees and franchisees with the means to find and develop new business, manage\ntheir relationships both externally with their clients and internally with the Company or their franchisor, develop better skills and\nknowledge in their areas of endeavor and, we believe, enhance their earning potential. While no one can predict the ups and downs of\nthe real estate market, we believe that the “weapons” we provide to our Company agents, employees and franchisees help them\nfight the adverse economic conditions, a volatile market and the competition.\n\n \n\nWhile\nour offices and our franchisees’ offices act as their “home base,” most agents use our offices primarily for real estate\nclosings and training. We monetize our technology by charging our agents and our franchisees’ agents what we believe to be a reasonable\nmonthly fee for the use of our suite of tools.\n\n \n\n15\n\n \n\n \n\n**Our\nIntellectual Property**\n\n** **\n\nIt\nis important that we protect our technology and intellectual property. We rely upon a combination of trademarks, trade secrets, copyrights,\npatents, confidentiality procedures, contractual commitments, domain names, and other legal rights to establish and protect our intellectual\nproperty. We generally enter into confidentiality agreements and invention or work product assignment agreements with our officers, employees,\nagents, contractors, and business partners to control access to, and clarify ownership of, our proprietary information.\n\n \n\nAs\nof June 3, 2026, we have a service mark registration in the United States for our LR logo. Additionally, we are the registered holder\nof a number of domain names, including “larosarealty.com” and “larosaholdings.com”.\n\n \n\nWe\ncontinually review our development efforts to assess the existence and patentability of new intellectual property. We intend to continue\nto evaluate the benefit of patent protection with respect to our technology and will file additional applications when we believe it\nto be beneficial for our business.\n\n \n\n**Our\nMarkets**\n\n** **\n\nOur\nprimary market is in the United States. As of June 3, 2026, we have 23 La Rosa Realty corporate real estate brokerage offices and\nbranches located in Florida, California, Texas, Georgia, and Puerto Rico. The Company also has 5 La Rosa Realty franchised real estate\nbrokerage offices and branches and 3 affiliated real estate brokerage offices in the United States and Puerto Rico. Additionally,\nthe Company has a full-service escrow settlement and title company in Florida. In April 2025, we also formed LR Agent Advance, LLC in\nFlorida, offering a commission advancement program exclusively for La Rosa agents. We also have LR Realty Spain, which is a full-service\nbrokerage office located primarily in Malaga, Spain.\n\n  \n\n**Our\nRevenue Streams**\n\n** **\n\nOur\nfinancial results are driven by the total number of sales agents in our Company, the number of sales agents closing commercial real estate\ntransactions, the number of sales agents utilizing our coaching services, and the number of agents who work with our franchisees. Since\nfounding our business in 2024, we grew our total agent count to 2,842 agents as of May 31, 2026.\n\n \n\nThe\nmajority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue\nstreams, with the majority of our revenue derived from commissions paid by consumers who transact business with our and our franchisees’\nagents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees and our franchisees’\nagents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property\nmanagement services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v)\ncoaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (vi) title services\nrevenue and (viii) fees from our events and forums. Our revenue streams are illustrated in the following chart:\n\n \n\n**REVENUE\nSTREAM**\n \n**DESCRIPTION**\n \n**PERCENT\nOF TOTAL\n2025\nREVENUE**\n \n \n**PERCENT\nOF TOTAL\n2024\nREVENUE**\n \n\n**Brokerage\nRevenue**\n \nPercentage\nfees paid on agent-generated residential real estate transactions. Other revenues recognized monthly (annual and monthly dues charged\nto our agents).\n \n \n97\n%\n \n \n97\n%\n\n**Property\nManagement Revenue**\n \nManagement\nfees earned from property owners.\n \n \n*\n%\n \n \n*\n%\n\n**Franchise\nSales and Other Franchise Revenues**\n \nOne-time\nfee payable upon signing of the franchise agreement. Other revenues recognized monthly (annual membership, technology, interest,\nlate fees, renewal, transfer, successor, accounting, other related fees). Per agent per closed transaction; payable monthly.\n \n \n*\n%\n \n \n*\n%\n\n**Coaching/Training/Assistance\nRevenue**\n \nBased\non real estate commissions earned by the sales agent. Event fees and break-out sessions.\n \n \n*\n%\n \n \n1\n%\n\n**Commercial\nReal Estate Revenue**\n \n10%\nof every real estate commission earned by the sales agent. Other revenues recognized monthly (monthly dues charged to our agents).\n \n \n1\n%\n \n \n*\n \n\n**Title\nSettlement and Insurance**\n \nFees\npaid by customers for comprehensive title and settlement services\n \n \n*\n \n \n \n*\n \n\n**TOTAL**\n \n \n \n \n**100**\n**%**\n \n \n**100**\n**%**\n\n \n\n*Less\nthan 1%.\n\n \n\n16\n\n \n\n \n\n**Our\nIndustry**\n\n** **\n\nThe\nresidential real estate industry is cyclical in nature but has shown strong historical long-term growth. We believe that long-term demand\nfor housing in the U.S. will be primarily driven by the economic health of the domestic economy and local factors such as demand relative\nto supply, and that the residential real estate market in the U.S. will also benefit over the long term from the following fundamental\nfactors:\n\n \n\n \n●\npent\nup demand for affordable housing in the Millennial and Gen Z generations that are seeking to acquire single-family homes;\n\n \n\n \n●\nan\nincrease in existing home stock as the Boomer generation downsizes due to retirement, illness and death; and\n\n \n\n \n●\nnot\nenough housing starts or resales to accommodate the demand, especially in the Florida market that we primarily serve.\n\n \n\nOur\nbrokers deal primarily in sales of existing homes, rather than the sales of new homes that are typically sold by builders. The recent\ncycle of growth of the real estate market hit headwinds in the second half of 2022. Mortgage rates dipped from 20-year highs in early\n2023 but have risen again and sales have resumed an extended period of declines. The NAR reported that for February 2026 (the seasonally\nadjusted annual rate) there were 4.09 million existing home sales, an increase of 1.7% over January 2026 but a decrease of 1.4% from\nthe prior year. Total housing inventory at the end of February 2026 was 1.29 million units, up 2.4% from January 2026 and 4.9% from one\nyear ago. There was a 3.8 months unsold inventory supply in February 2026, identical to January 2026 but up from 3.6 months in February\n2025. The median existing-home sales price increased to $398,000, an increase of 0.3% from February 2025 ($396,800). Properties typically\nremained on the market 47 days in February 2026, down from 46 days in January 2026 and up from 42 days in February 2025. \n\n** **\n\nRealtors\ncontinue to be an integral part of the home buying process. According to NAR:5\n\n \n\n \n●\n88%\nof buyers recently purchased their home through a real estate agent or broker and 5% purchased directly through the previous owner;\n\n \n\n \n●\nhaving\nan agent to help them find the right home was what buyers wanted most when choosing an agent at 50%;\n\n \n\n \n●\n92%\nof home buyers are satisfied with the buying process;\n\n  \n\n \n●\n91%\nof sellers sold with the assistance of a real estate agent, up from 90% last year, and only 5% were\nFSBO sales, an all-time low.\n\n \n\n**Seasonality**\n\n** **\n\nOur\nbusiness is affected by the seasons and weather. The spring and summer seasons, when school is out, have typically resulted in higher\nsales volumes compared to fall and winter seasons. With the slowdown in the later months, we have experienced slower listing activity,\nfewer transaction closings and lower revenues and have seen more agent turnover as well. Bad weather or natural disasters also negatively\nimpact listings and sales, which reduces our operating income, net income, operating margins and cash flow. While this pattern is fairly\npredictable, there can be no assurance that it will continue. Moreover, with the impact of climate change, we expect more business disruptions\nin the coming years, many of which could be unpredictable and extreme.\n\n \n\nOur\nrevenues and operating margins will fluctuate in successive quarters due to a wide variety of factors, including seasonality, weather,\nhealth exigencies, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations,\nand changes in mortgage interest rates. This fluctuation may make it difficult to compare or analyze our financial performance effectively\nacross successive quarters.\n\n \n\n \n\n5\n\nhttps://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers\n\n \n\n17\n\n \n\n \n\nIn\naddition, the residential real estate market and the real estate industry in general is cyclical, characterized by “bubbles”\nthat reflect faster-than-usual housing price increases, heavy demand for single-family homes, interest rate fluctuations, easy credit\nstandards and lax government housing policies on the one hand, and protracted periods of depressed home values, lower buyer demand, inflated\nrates of foreclosure and often changing regulatory or underwriting standards applicable to mortgages on the other hand. It is unclear\nas to whether the U.S. is currently experiencing a “bursting bubble” from the unusual pent-up demand and move to remote work\ncreated by the Covid-19 pandemic followed by the rapid and extreme mortgage rate hikes that has slowed the market in recent months. The\nbest example of the bubble bursting was the significant downturn in the U.S. residential real estate market between 2005 and 2011. While\nwe believe we are well-positioned to compete during a downturn, our business is affected by these cycles in the residential real estate\nmarket, which can make it difficult to compare or analyze our financial performance effectively across successive periods.\n\n \n\n**Competition**\n\n** **\n\nThe\nreal estate brokerage business is highly competitive. We primarily compete against other independent real estate brokerage agencies in\nour local markets as well as the international and national real estate brokerage franchisors seeking to grow their franchise system.\nWe compete against other brokerages to attract transactional clients based on our personalized service with experienced brokers who know\nthe local market, the number and quality of listings, our brand and reputation and our marketing efforts. We also compete to attract\nreal estate professionals based on our brand and reputation, the quality of our training and coaching, our marketing efforts, our generous\n100% commission “split” for experienced brokers and our technology tools that make the brokers more efficient and productive.\n\n \n\nOur\nlargest national franchise competitors in the U.S. include RE/MAX, Realogy Holdings Corp. (which operates several brands including Century\n21 and Coldwell Banker), Fathom Holdings Inc., and eXp World Holdings Inc. We believe that competition in the real estate brokerage franchise\nbusiness is based principally upon the reputational strength of the brand, the quality of the services offered to franchisees, and the\namount of franchise-related fees to be paid by franchisees.\n\n \n\nWe\nalso face competition from internet-based real estate brokers including Realtor.com, Fathom Holdings Inc., Redfin.com, and Zillow.com,\nbrokers offering deeply discounted commissions like Simple Showing Holdings, Inc., Houwzer LLC and Real Estate Exchange, Inc. (Rexhomes.com)\nand “flat fee” brokers such as Homie Technology, Inc., Cottage Street Realty, LLC (FlatFeeGroup.com) and Trelora, Inc. These\ncompanies do not provide the same personalized brokerage services that we do and emphasize low price and a do-it-yourself philosophy.\n\n \n\nFPG\nTitle Group operates in a competitive landscape, facing significant competition from other title insurance and settlement service providers\nin Florida. Key competitors include First American Title Insurance Company, Fidelity National Title Group, and Old Republic National\nTitle Insurance Company. These companies offer similar services, such as title insurance and escrow services, and have established strong\nmarket positions through extensive networks and robust client relationships. To differentiate itself, FPG Title Group focuses on providing\ncustomizable solutions tailored to the specific needs of local banks, national lenders, and mortgage servicers. Additionally, FPG Title\nGroup emphasizes client satisfaction through dedicated service teams and streamlined transaction processes, aiming to close loans quickly\nand accurately while maintaining full compliance with industry standards. This strategic approach helps FPG Title Group maintain a competitive\nedge in the market.\n\n \n\nIn\nthe property management arena, we compete against independent local property management companies and the major national and international\ncommercial real estate property managers such as Jones Lang LaSalle and Cushman & Wakefield plc. While most of our property management\nbusiness comes from referrals in our local market, we compete on price and our ability to be on the ground and available to handle day-to-day\nmatters for our clients.\n\n \n\nOur\nreal estate coaching business competes against other in-house training services operated by independent real estate brokerage agencies\nand the international and national franchisors named above, as well as online providers including The Mike Ferry Organization, Keller\nWilliams Mega Agent Production Systems, Buffini and Co., Tony Robbins Coaching, Craig Proctor Coaching, and Tom Ferry Coaching. We compete\non the basis of personalized instruction, our mentorship program that provides a neophyte agent with an experienced coach to guide her\nand answer questions on an on-going basis after the classroom instruction has ended.\n\n \n\nMany\nof our existing and potential competitors have substantial competitive advantages, including a larger national and international footprint\nand more recognizable brand, greater financial resources, longer operating histories, a greater breadth of marketing coverage, more extensive\nrelationships in the residential and commercial real estate industry with brokers, agents, service providers and advertisers, stronger\nrelationships with third party data providers such as multiple listing services and listing aggregators, maintain their own in-house\nsoftware development, have access to larger user bases and greater intellectual property portfolios.\n\n \n\n18\n\n \n\n \n\n**Government\nRegulation**\n\n** **\n\n**Overview**\n\n** **\n\nThe\nresidential real estate industry is regulated by federal, state and local authorities as well as private associations or state sponsored\nassociations or organizations. We must comply with federal, state, and local laws, as well as private governing bodies’ regulations,\nwhich, when combined, results in a highly regulated industry.\n\n \n\nWe\nare also subject to federal and state regulations relating to employment, contractors, and compensation practices. Except for our employed\nCompany agents, all agents in our brokerage operations have been retained as independent contractors, either directly or indirectly through\nour franchisors. With respect to these independent contractors, like most brokerage firms, we are subject to the Internal Revenue Service\nregulations and applicable state law guidelines regarding independent contractor classification. These regulations and guidelines are\nsubject to judicial and agency interpretation.\n\n \n\n**Federal\nRegulation**\n\n** **\n\nThe\nReal Estate Settlement Procedures Act of 1974, as amended (“RESPA”), became effective on June 20, 1975. RESPA requires lenders,\nmortgage agents, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs\nof the real estate settlement process. RESPA also protects borrowers against certain abusive practices, such as kickbacks, and places\nlimitations upon the use of escrow accounts. RESPA also requires detailed disclosures concerning the transfer, sale, or assignment of\nmortgage servicing, as well as disclosures for mortgage escrow accounts. RESPA is administered and enforced by Consumer Financial Protection\nBureau (the “CFPB”). We are also subject to the Fair Housing Act of 1968 (the “FHA”) which prohibits discrimination\nin the purchase or sale of homes and applies to real estate brokers and agents, among others. The FHA prohibits expressing any preference\nor discrimination based on race, religion, sex, handicap, and certain other protected characteristics, and applies broadly to many forms\nof advertising and communications. Other federal laws and regulations applicable to our business include (i) the Federal Truth in Lending\nAct of 1969; (ii) the Federal Equal Credit Opportunity Act; (iii) the Federal Fair Credit Reporting Act; (iv) the Home Mortgage Disclosure\nAct; (v) the Gramm-Leach-Bliley Act; (vi) the Consumer Financial Protection Act; (vii) the Fair and Accurate Credit Transactions Act;\nand (viii) the Do Not Call/Do Not Fax Act and other federal and state laws pertaining to the privacy rights of consumers, our collection,\nuse, and disclosure of data collected from our website and mobile users, and the manner and circumstances under which we or third parties\nmay market and advertise our services to consumer which affects our opportunities to solicit new clients.\n\n \n\nOur\nbusiness is also subject to various antitrust and competition laws, including the Sherman Antitrust Act, the Federal Trade Commission\nAct, the Clayton Act, and other related federal, state, and provincial laws in the jurisdictions in which we operate. These laws prevent\nanti-competitive behaviors such as price-fixing and other conduct that unreasonably restrains trade and competition. In 2021, the Department\nof Justice (“DOJ”) withdrew its consent to a November 2020 proposed settlement with NAR concerning alleged anti-competitive\npractices in real estate. While the DOJ dismissed its lawsuit against NAR in July 2021, it indicated a broader investigation into NAR’s\nactivities. In November 2021, NAR modified its rules to implement most of the changes the DOJ settlement sought. In January 2023, a court\nset aside the DOJ’s new investigative demand related to NAR. The indirect and direct effects, if any, of this action upon the real\nestate industry are not yet clear.\n\n \n\nWhile\nanti-competition enforcement has intensified across industries, there is a unique focus on the real estate industry in the United States\nand Canada. For example, the White House issued an Executive Order in July 2021 identifying real estate brokerages and listings as an\narea of focus. In 2018, a joint workshop by the DOJ and FTC addressed potential competition issues in the residential real estate sector\nwhich could be the subject of future enforcement actions.\n\n \n\nBeginning\nin March 2019, lawsuits were filed against the NAR and a number of large real estate brokers around the country alleging antitrust violations.\nWe were not named as a defendant in any antitrust litigation.\n\n \n\nOn\nMarch 15, 2024, the NAR announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker\ncommissions. This settlement resolves claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations;\nall association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion\nor below and is subject to court approval. The settlement makes clear that NAR continues to deny any wrongdoing in connection with the\nMultiple Listing Service cooperative compensation model rule (the MLS Model Rule) that was introduced in the 1990s in response to calls\nfrom consumer protection advocates for buyer representation. Under the terms of the agreement, NAR would pay $418 million over approximately\nfour years (the “NAR Settlement”). In the settlement, effective mid-July 2024, NAR agreed to put in place a new rule prohibiting\noffers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers’ agents. On\nNovember 26, 2024, the NAR Settlement was granted over objections. Some class members objected to the settlement and appealed to\nthe Eighth Circuit Court of Appeals. The appeals are still pending, and the settlement cannot become final or distribute benefits\nuntil they are resolved. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the NAR and certain companies\nrelated to this matter. However, the direct and indirect effects, if any, of the judgment upon the real estate industry are not yet entirely\nclear.\n\n \n\n19\n\n \n\n \n\nThese\nlawsuits, together with similar lawsuits against other businesses in our industry, have prompted discussion of regulatory changes to\nrules established by local or state real estate boards or MLSs. At this time, we do not believe to be negatively affected by such lawsuits\ndue to flexibility of our agent-centric commission model, creating multiple revenue streams for our agents, and due to our consumer-centric\ntechnology model. However, the resolution of the antitrust litigation and/or other regulatory changes may require changes to our or our\nbrokers’ business models, including changes in agent and broker compensation. This could reduce the fees we receive from our affiliated\nreal estate professionals, which, in turn, could adversely affect our financial condition and results of operations.\n\n \n\nInternationally,\nour operations are also subject to laws against improper payments, including the U.S. Foreign Corrupt Practices Act and similar global\nregulations.\n\n \n\n**State\nand Local Regulation**\n\n** **\n\nWe\nare subject to state real estate and brokerage licensing laws and requirements that vary from state to state. In general, all individuals\nand entities lawfully conducting businesses as real estate agents or sales associates must be licensed in the state in which they carry\non business and must at all times be in compliance.\n\n \n\nReal\nestate brokers are required to be employed by the brokerage firm or as an independent contractor and the broker may work for another\nbroker conducting business on behalf of the sponsoring broker. Generally, attorneys may act as brokers in some states without being separately\nlicensed.\n\n \n\nStates\nmay require a person licensed as a real estate agent, sales associate or salesperson, to be affiliated with a broker, as either an employee\nor an independent contractor, in order to engage in licensed real estate brokerage activities or allow the agent, sales associate or\nsalesperson to work for another agent, sales associate or salesperson conducting business on behalf of the sponsoring agent, sales associate\nor salesperson.\n\n \n\nEngaging\nin the real estate brokerage business requires obtaining a real estate broker license (although in some states the licenses are personal\nto individual agents). In order to obtain this license, most jurisdictions require that a member or manager be licensed individually\nas a real estate broker in that jurisdiction. If applicable, this member or manager is responsible for supervising the licensees and\nthe entity’s real estate brokerage activities within the state.\n\n \n\nReal\nestate licensees, whether they are salespersons, individuals, agents or entities, must follow the state’s real estate licensing\nlaws and regulations. These laws and regulations generally specify minimum duties and obligations of these licensees to their clients\nand the public, as well as standards for the conduct of business, including contract and disclosure requirements, record keeping requirements,\nrequirements for local offices, escrow trust fund management, agency representation, advertising regulations and fair housing requirements.\nOur Company’s management and our franchisors provide oversight with respect to the observance of the statutes and regulations set\nforth in each state where we or our franchisors, respectively, operate.\n\n \n\nMany\njurisdictions have local county or city regulations that govern the conduct of the real estate brokerage business. Local regulations\ngenerally require additional disclosures by the parties to a real estate transaction or their agents, or the receipt of reports or certifications,\noften from the local governmental authority, prior to the closing or settlement of a real estate transaction as well as prescribed review\nand approval periods for documentation and broker conditions for review and approval.\n\n \n\n20\n\n \n\n \n\n**Other\nregulation**\n\n** **\n\nWe\nare also subject to rules established by private real estate groups and/or trade organizations, including, among others, the NAR, state\nand local associations of realtors, local MLS and homeowners’ associations that have rules governing the sale of properties within\ntheir neighborhoods. Each third-party organization generally has prescribed policies, bylaws, codes of ethics or conduct, and fees and\nrules governing the actions of members in dealings with other members, clients and the public, as well as how the third-party organization’s\nbrand and services may or might not be deployed or displayed.\n\n \n\n**Human\nCapital Resources**\n\n** **\n\nAs\nof May 31, 2026, we had 43 full-time employees in our Company and our majority owned subsidiaries, and 2,842 real estate agents that\nare independent contractors with Realty and other subsidiaries of the Company. Our operations are overseen directly by our management.\nOur management functions cover corporate administration, training, agent relations, business development, technology, and research. We\nintend to expand our current management to retain skilled employees with experience relevant to our business. Our management’s\nrelationships with our agents and technology team are good. We do not have any collective bargaining agreements, and our employees are\nnot represented by a union.\n\n \n\nOur\nhuman capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating\nour existing and new employees, advisors and consultants. The principal purposes of our equity and cash incentive plans are to attract,\nretain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder\nvalue and the success of our Company by motivating such individuals to perform to the best of their abilities and achieve our objectives.\n\n \n\n**Available\nInformation**\n\n** **\n\nOur\nwebsite address is *www.larosaholdings.com*. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on\nForm 8-K, any amendments to those reports, proxy and registration statements filed or furnished with the SEC, are available free of charge\nthrough our website. We make these materials available through our website as soon as reasonably practicable after we electronically\nfile such materials with, or furnish such materials to, the SEC. The reports filed with the SEC by our executive officers and directors\npursuant to Section 16 under the Exchange Act are also made available, free of charge on our website, as soon as reasonably practicable\nafter copies of those filings are provided to us by those persons. These materials can be accessed through the “Financial Filings”\nsection of our website. The information contained in, or that can be accessed through, our website is not part of this Comprehensive\nForm 10-K."}