{"url_path":"/sec/lrhc/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data.**","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":33198,"has_tables":true,"body_markdown":"**Item\n8. Financial Statements and Supplementary Data.**\n\n \n\n**LA\nROSA HOLDINGS CORP**.\n\n**CONSOLIDATED\nFINANCIAL STATEMENTS**\n\n**DECEMBER\n31, 2025 AND 2024**\n\n** **\n\n**INDEX\nTO AUDITED CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n**Report of Independent Public Accounting Firm - CBIZ CPAs P.C. (PCAOB ID No. 199)** **F-2**\n\n   \n\n**Report of Independent Public Accounting Firm - Marcum LLP (PCAOB ID No. 688)** **F-3**\n\n   \n\n**Consolidated Balance Sheets** **F-4**\n\n   \n\n**Consolidated Statements of Operations** **F-5**\n\n   \n\n**Consolidated Statements of Changes in Stockholders’ (Deficit) Equity** **F-6**\n\n   \n\n**Consolidated Statements of Cash Flows** **F-7**\n\n   \n\n**Notes to Consolidated Financial Statements** **F-8**\n\n \n\nF-1\n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n** **\n\nTo\nthe Stockholders and Board of Directors of\n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n \n\n**Opinion\non the Financial Statements**\n\n** **\n\nWe\nhave audited the accompanying consolidated balance sheet of La Rosa Holdings Corp. and Subsidiaries (the “Company”) as of\nDecember 31, 2025, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the year\nended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion,\nbased on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December\n31, 2025 and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles\ngenerally accepted in the United States of America.\n\n \n\n**Explanatory\nParagraph – Going Concern**\n\n \n\nThe\naccompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more\nfully described in Note 1, the Company has incurred significant losses and its operations have not provided positive cash flows. The\nCompany needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt\nabout the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described\nin Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.\n\n** **\n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or\nfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide**s**\na reasonable basis for our opinion.\n\n \n\n/s/\nCBIZ CPAs P.C.\n\n \n\nCBIZ\nCPAs P.C.\n\n \n\nWe\nhave served as the Company’s auditor since 2021 (such date takes into account the acquisition of the attest business of Marcum\nllp by CBIZ CPAs P.C. effective November 1, 2024).\n\n \n\nSaddle\nBrook, New Jersey\n\nJune 4, 2026\n\n** **\n\nF-2\n\n \n\n \n\n**REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\nTo\nthe Shareholders and Board of Directors of\n\nLa\nRosa Holdings Corp. and Subsidiaries\n\n \n\n**Opinion\non the Financial Statements**\n\n** **\n\nWe\nhave audited the accompanying consolidated balance sheet of La Rosa Holdings Corp. and Subsidiaries (the “Company”) as of\nDecember 31, 2024, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year\nended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion,\nthe financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and\nthe results of its operations and its cash flows for the year ended December 31, 2024 in conformity with accounting principles generally\naccepted in the United States of America.\n\n \n\n**Explanatory\nParagraph – Going Concern**\n\n \n\nThe\naccompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described\nin Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds\nto meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue\nas a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not\ninclude any adjustments that might result from the outcome of this uncertainty.\n\n \n\n**Restatement\nof Previously Issued Financial Statements**\n\n** **\n\nAs\ndescribed in Note 2 of the financial statements, the Company has restated its financial statements as of and for the year ended December\n31, 2024 to correct misstatements.\n\n** **\n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or\nfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides\na reasonable basis for our opinion.\n\n \n\n/s/\nMarcum llp\n\n \n\nMarcum\nllp\n\n \n\nWe\nhave served as the Company’s auditor from 2021 to 2025.\n\n \n\nNew\nYork, NY\n\nApril 15, 2025, except for Note 2 and Note 3, as to which date is June\n4, 2026.\n\n \n\nF-3\n\n \n\n \n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n**Consolidated\nBalance Sheets**\n\n \n\n \n \nDecember 31,\n\n2025\n \n \nDecember 31,\n\n2024\n \n\nAssets\n \n \n \n \n \n \n\nCurrent assets:\n \n \n \n \n \n \n\nCash and\ncash equivalents\n \n$\n3,086,770\n \n \n$\n1,442,901\n \n\nRestricted cash\n \n \n1,758,531\n \n \n \n1,750,421\n \n\nAccounts receivable, net of allowance for credit losses of $179,643 and $166,504, respectively\n \n \n1,252,452\n \n \n \n931,662\n \n\nOther\ncurrent assets\n \n \n15,601\n \n \n \n1,788\n \n\nTotal\ncurrent assets\n \n \n6,113,354\n \n \n \n4,126,772\n \n\n \n \n \n \n \n \n \n \n \n\nNoncurrent assets:\n \n \n \n \n \n \n \n \n\nRestricted cash, net\nof current\n \n \n58,972\n \n \n \n387,286\n \n\nProperty and equipment,\nnet\n \n \n6,094\n \n \n \n9,411\n \n\nRight-of-use asset,\nnet\n \n \n963,991\n \n \n \n997,715\n \n\nIntangible assets, net\n \n \n4,425,042\n \n \n \n5,840,080\n \n\nGoodwill\n \n \n1,831,197\n \n \n \n8,012,331\n \n\nOther\nlong-term assets\n \n \n44,867\n \n \n \n33,831\n \n\nTotal\nnoncurrent assets\n \n \n7,330,163\n \n \n \n15,280,654\n \n\nTotal\nassets\n \n$\n13,443,517\n \n \n$\n19,407,426\n \n\nLiabilities, Series X Preferred\nStock Subject to Redemption and Stockholders’ (Deficit) Equity\n \n \n \n \n \n \n \n \n\nCurrent liabilities:\n \n \n \n \n \n \n \n \n\nAccounts payable\n \n$\n2,895,861\n \n \n$\n2,376,704\n \n\nAccrued expenses\n \n \n83,876\n \n \n \n738,065\n \n\nContract liabilities\n \n \n171,100\n \n \n \n7,747\n \n\nSecurity deposits and\nescrow payable\n \n \n1,758,531\n \n \n \n1,750,421\n \n\nLine of credit\n \n \n—\n \n \n \n148,976\n \n\nDerivative liability\n \n \n—\n \n \n \n1,607,544\n \n\nAdvances on future receipts\n \n \n—\n \n \n \n618,681\n \n\nAccrued acquisition\ncash consideration\n \n \n30,000\n \n \n \n381,404\n \n\nNotes payable, current\n \n \n148,757\n \n \n \n2,187,673\n \n\nLease\nliability, current\n \n \n486,481\n \n \n \n473,733\n \n\nTotal\ncurrent liabilities\n \n \n5,574,606\n \n \n \n10,290,948\n \n\n \n \n \n \n \n \n \n \n \n\nNoncurrent liabilities:\n \n \n \n \n \n \n \n \n\nNote payable, net of\ncurrent\n \n \n7,143,803\n \n \n \n1,475,064\n \n\nSecurity deposits and\nescrow payable, net of current\n \n \n58,972\n \n \n \n387,286\n \n\nLease liability, noncurrent\n \n \n514,388\n \n \n \n545,759\n \n\nOther\nliabilities\n \n \n—\n \n \n \n32,950\n \n\nTotal\nnon-current liabilities\n \n \n7,717,163\n \n \n \n2,441,059\n \n\nTotal\nliabilities\n \n \n13,291,769\n \n \n \n12,732,007\n \n\n \n \n \n \n \n \n \n \n \n\nCommitments and contingencies (Note 16)\n \n \n\n \n\n \n \n \n\n \n\n \n\n \n \n \n \n \n \n \n \n \n\nSeries X Preferred Stock Subject to Redemption:\n \n \n \n \n \n \n \n \n\nPreferred stock - $0.0001 par value; 50,000,000 shares authorized; 2,000 and 0 Series X Preferred Stock issued and outstanding at December 31, 2025 and December 31, 2024, respectively\n \n \n2,000,000\n \n \n \n—\n \n\nStockholders’ (Deficit) Equity:\n \n \n \n \n \n \n \n \n\nPreferred stock - $0.0001 par value; 50,000,000 shares authorized; 0 and 2,000 Series X shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively\n \n \n—\n\n \n \n—\n \n\nPreferred stock - $0.0001 par value; 50,000,000 shares authorized; 6,000 and 0 Series B shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively\n \n \n1\n \n \n \n—\n \n\nCommon stock - $0.0001 par value; 2,000,000,000 shares authorized; 20,963 and 2,772 issued and outstanding at December 31, 2025 and December 31, 2024, respectively\n \n \n1\n \n \n \n—\n \n\n \n \n \n \n \n \n \n \n \n\nAdditional paid-in capital\n \n \n51,010,523\n \n \n \n29,123,774\n \n\nAccumulated deficit\n \n \n(57,099,883\n)\n \n \n(26,555,319\n)\n\nTotal stockholders’\n(deficit) equity – La Rosa Holdings Corp. shareholders\n \n \n(6,089,358\n)\n \n \n2,568,455\n \n\nNoncontrolling\ninterest in subsidiaries\n \n \n4,241,106\n \n \n \n4,106,964\n \n\nTotal\nstockholders’ (deficit) equity\n \n \n(1,848,252\n)\n \n \n6,675,419\n \n\nTotal\nLiabilities, Series X Preferred Stock Subject to Redemption and Stockholders’ (Deficit) Equity\n \n$\n13,443,517\n \n \n$\n19,407,426\n \n\n  \n\n*See\nnotes to the consolidated financial statements.*\n\nF-4\n\n \n\n \n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n**Consolidated\nStatements of Operations**\n\n \n\n  \nYear\nEnded December 31, \n\n  \n2025  \n2024 \n\n  \n   \n(Restated) \n\nRevenue \n$68,507,806  \n$58,682,139 \n\n  \n    \n   \n\nCost of revenue \n 61,539,417  \n 52,728,860 \n\n  \n    \n   \n\nGross\nprofit \n 6,968,389  \n 5,953,279 \n\n  \n    \n   \n\nOperating\nexpenses: \n    \n   \n\nSales\nand marketing \n 1,542,680  \n 1,007,077 \n\nGeneral\nand administrative \n 13,869,972  \n 10,625,551 \n\nStock-based\ncompensation — general and administrative \n 4,980,139  \n 4,730,355 \n\nImpairment\nof goodwill and intangibles \n 6,911,770  \n 787,438 \n\nTotal\noperating expenses \n 27,304,561  \n 17,150,421 \n\n  \n    \n   \n\nLoss\nfrom operations \n (20,336,172) \n (11,197,142)\n\nOther\nincome (expense) \n    \n   \n\nInterest\nexpense, net \n 243,825  \n (403,397)\n\nGain\n(loss) on extinguishment of debt \n 3,961,075  \n (777,558)\n\nAmortization\nof debt discount \n (63,160) \n (649,138)\n\nChange\nin fair value of derivative liability \n 899,874  \n (1,338,506)\n\nLoss\non issuance of senior secured convertible note and warrants \n (128,836,250) \n — \n\nChange\non fair value of convertible note and warrants \n 31,163,415  \n — \n\nGain\non settlement of incremental warrants \n 82,299,000  \n — \n\nOther\nincome, net \n 257,971  \n 15,745 \n\nLoss\nbefore income taxes \n (30,410,422) \n (14,349,996)\n\nProvision\nfor income taxes \n —  \n — \n\nNet\nloss \n (30,410,422) \n (14,349,996)\n\nLess:\nNet income attributable to noncontrolling interests in subsidiaries \n 134,142  \n 97,567 \n\nNet\nloss after noncontrolling interest in subsidiaries \n (30,544,564) \n (14,447,563)\n\nLess:\nDeemed dividend \n 2,275,264  \n 1,476,044 \n\nNet\nloss attributable to common stockholders \n$(32,819,828) \n$(15,923,607)\n\n  \n    \n   \n\nLoss\nper share of common stock attributable to common stockholders \n    \n   \n\nBasic\nand diluted \n$(3,531) \n$(7,844)\n\n  \n    \n   \n\nWeighted\naverage shares used  in computing net loss per share of common stock attributable to common stockholders \n    \n   \n\nBasic\nand diluted \n 9,296  \n 2,030 \n\n \n\n*See\nnotes to the consolidated financial statements.*\n\n \n\nF-5\n\n \n\n \n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n**Consolidated\nStatements of Changes in Stockholders’ Equity (Deficit)**\n\n**For\nthe Years Ended December 31, 2025 and 2024**\n\n \n\n \n \nPreferred\nStock\nSeries X\n \n \nPreferred\nStock\nSeries B\n \n \nCommon\nStock\n \n \nAdditional\n\nPaid—in\n \n \nAccumulated\n \n \nTotal\n\nStockholders’\nEquity\n \n \n**Noncontrolling**Interest In\n \n \nTotal\n \n\n \n \nShares\n \n \nAmount\n \n \nShares\n \n \nPar\nValue\n \n \nShares\n \n \nPar\nValue\n \n \nCapital\n \n \nDeficit\n \n \n(Deficit)\n \n \nSubsidiaries\n \n \nEquity\n \n\nBalance\nas of December 31, 2023\n \n \n2,000\n \n \n$\n—\n \n \n \n—\n \n \n$\n—\n \n \n \n1,700\n \n \n$\n—\n \n \n$\n18,017,741\n \n \n$\n(12,107,756\n)\n \n$\n5,909,985\n \n \n$\n3,857,076\n \n \n$\n9,767,061\n \n\nNet\nloss\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(14,447,563\n)\n \n \n(14,447,563\n)\n \n \n97,567\n \n \n \n(14,349,996\n)\n\nIssuance\nof common stock for acquisitions\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n356\n \n \n \n—\n \n \n \n3,448,951\n \n \n \n \n \n \n \n3,448,951\n \n \n \n152,321\n \n \n \n3,601,272\n \n\nIssuance\nof common stock for Non—Controlling interest\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n49\n \n \n \n—\n \n \n \n377,485\n \n \n \n \n \n \n \n377,485\n \n \n \n—\n \n \n \n377,485\n \n\nEquity\nawards issued with debt issuance\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n138\n \n \n \n—\n \n \n \n1,076,769\n \n \n \n \n \n \n \n1,076,769\n \n \n \n \n \n \n \n1,076,769\n \n\nStock—based\ncompensation\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n189\n \n \n \n—\n \n \n \n4,730,355\n \n \n \n \n \n \n \n4,730,355\n \n \n \n \n \n \n \n4,730,355\n \n\nProceeds\nfrom new investors and S—3\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n338\n \n \n \n—\n \n \n \n1,474,431\n \n \n \n \n \n \n \n1,474,431\n \n \n \n \n \n \n \n1,474,431\n \n\nIssuance\nof common stock for equity awards, net of shares withheld for taxes\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2\n \n \n \n—\n \n \n \n(1,958\n)\n \n \n \n \n \n \n(1,958\n)\n \n \n \n \n \n \n(1,958\n)\n\nBalance\nas of December 31, 2024\n \n \n2,000\n \n \n$\n—\n \n \n \n—\n \n \n$\n—\n \n \n \n2,772\n \n \n$\n—\n \n \n$\n29,123,774\n \n \n$\n(26,555,319\n)\n \n$\n2,568,455\n \n \n$\n4,106,964\n \n \n$\n6,675,419\n \n\nNet\nloss\n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n—\n \n \n \n \n \n \n \n\n \n\n \n \n \n \n \n \n \n(30,544,564\n)\n \n \n(30,544,564\n)\n \n \n134,142\n \n \n \n(30,410,422\n)\n\nIssuance\nof common stock for consulting work\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n1,903\n \n \n \n—\n \n \n \n1,831,338\n \n \n \n—\n \n \n \n1,831,338\n \n \n \n—\n \n \n \n1,831,338\n \n\nConversion\nof liabilities into common stock\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n8,965\n \n \n \n1\n \n \n \n2,222,562\n \n \n \n—\n \n \n \n2,222,563\n \n \n \n—\n \n \n \n2,222,563\n \n\nEquity\nawards issued with debt issuance\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n282\n \n \n \n—\n \n \n \n812,153\n \n \n \n—\n \n \n \n812,153\n \n \n \n—\n \n \n \n812,153\n \n\nStock—based\ncompensation\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n2,682\n \n \n \n—\n \n \n \n3,140,901\n \n \n \n—\n \n \n \n3,140,901\n \n \n \n—\n \n \n \n3,140,901\n \n\nProceeds\nfrom new investors\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n4,315\n \n \n \n—\n \n \n \n7,610,896\n \n \n \n—\n \n \n \n7,610,896\n \n \n \n—\n \n \n \n7,610,896\n \n\nIssuance\nof series B preferred stock\n \n \n \n \n \n \n \n \n \n \n6,000\n \n \n \n1\n \n \n \n—\n \n \n \n—\n \n \n \n8,260,999\n \n \n \n \n \n \n \n8,261,000\n \n \n \n \n \n \n \n8,261,000\n \n\nIssuance\nof common stock for stock—based compensation equity awards, net of shares withheld for taxes\n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n44\n \n \n \n—\n \n \n \n7,900\n \n \n \n—\n \n \n \n7,900\n \n \n \n—\n \n \n \n7,900\n \n\nReclassification\nof non-contingent portion of Series X redemption\n \n \n(2,000\n) \n\n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n—\n \n \n \n(2,000,000\n)\n \n \n—\n \n \n \n(2,000,000\n)\n \n \n—\n \n \n \n(2,000,000\n)\n\nBalance\nas of December 31, 2025\n \n \n—\n \n \n$\n—\n \n \n \n6,000\n \n \n$\n1\n \n \n \n20,963\n \n \n$\n1\n \n \n$\n51,010,523\n \n \n$\n(57,099,883\n)\n \n$\n(6,089,358\n)\n \n$\n4,241,106\n \n \n$\n(1,848,252\n)\n\n  \n\n*See\nnotes to the consolidated financial statements.*\n\n \n\nF-6\n\n \n\n \n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n**Consolidated\nStatement of Cash Flows**\n\n**  **\n\n  \nYear\nEnded December 31, \n\n  \n2025  \n2024 \n\n  \n   \n  \n\nCash\nFlows from Operating Activities: \n    \n   \n\nNet loss \n$(30,410,422) \n$(14,349,996)\n\nAdjustments to reconcile\nnet loss to net cash used in operating activities: \n    \n   \n\nStock-based compensation \n 4,980,139  \n 4,730,355 \n\nLoss on issuance of\nsenior secured convertible note and warrants \n 128,836,250  \n — \n\nChange on fair value\nof convertible note and warrants \n (31,163,415) \n — \n\nGain on settlement of\nincremental warrants \n (82,299,000) \n — \n\nAmortization and depreciation \n 687,719  \n 1,018,934 \n\nAmortization of right-of-use\nassets \n 588,914  \n 561,654 \n\nChange in fair value\nof derivatives \n (899,874) \n 1,338,506 \n\nAmortization of debt\ndiscount and financing fees \n 63,160  \n 649,138 \n\n(Gain) loss on extinguishment\nof debt \n (3,961,075) \n 777,558 \n\nImpairment of goodwill\nand intangibles \n 6,911,770  \n 787,438 \n\nNon-cash interest expense \n 218,049  \n 8,793 \n\nAllowance for credit\nlosses \n 13,139  \n 82,324 \n\nChanges in Operating Assets\nand Liabilities: \n    \n   \n\nAccounts receivable \n (333,929) \n (174,175)\n\nOther assets \n (24,849) \n 15,387 \n\nAccounts payable \n 867,476  \n 1,131,817 \n\nAccrued expenses \n (872,247) \n 459,952 \n\nContract liabilities \n 163,353  \n 7,747 \n\nSecurity deposits and\nescrow payable \n (320,204) \n 524,854 \n\nOperating\nlease liabilities \n (573,813) \n (567,593)\n\nNet\nCash Used in Operating Activities \n (7,528,859) \n (2,997,307)\n\nCash\nFlows from Investing Activities: \n    \n   \n\nPurchase of property\nplant and equipment \n —  \n (5,033)\n\nCash\nacquired through acquisition of businesses \n —  \n (63,592)\n\nNet\nCash Provided by Investing Activities \n —  \n (68,625)\n\nCash\nFlows from Financing Activities: \n    \n   \n\nBorrowings on bank line\nof credit \n 6,898  \n 300,508 \n\nPayments on bank line\nof credit \n (155,874) \n (151,532)\n\nProceeds from notes\npayable \n 3,408,585  \n 3,363,228 \n\nPayments of deferred\ndebt issuance costs \n (138,895) \n (459,094)\n\nPayments on notes payable \n (420,778) \n (1,027,522)\n\nProceeds from advances\non future receipts \n —  \n 1,899,250 \n\nPayments on advances\non future receipts \n (694,871) \n (1,121,368)\n\nPayments on post-acquisition\nconsideration \n (384,354) \n (150,000)\n\nDistributions to noncontrolling\ninterest \n —  \n (1,377,484)\n\nRepurchase of derivative\ninstruments issued \n (379,083) \n — \n\nProceeds from issuance\nof common stock \n 7,610,896  \n 2,928,685 \n\nWithholding\ntax paid on behalf of employees on stock-based awards \n —  \n (1,958)\n\nNet\nCash Provided by Financing Activities \n 8,852,524  \n 4,202,713 \n\n  \n    \n   \n\nNet Increase in Cash, Cash\nequivalents and Restricted Cash \n 1,323,665  \n 1,136,781 \n\nCash,\nCash equivalents and Restricted Cash at Beginning of Period \n 3,580,608  \n 2,443,827 \n\nCash,\nCash equivalents and Restricted Cash at End of Period \n$4,904,273  \n$3,580,608 \n\n  \n    \n   \n\nSupplemental\nDisclosures of Cash Flow Information: \n    \n   \n\nCash Paid During the\nPeriod for: \n    \n   \n\nInterest \n$291,566  \n$335,425 \n\n  \n    \n   \n\nNon-Cash\nActivities \n    \n   \n\nIssuance\nof Series B in exchange of incremental warrants \n$8,261,000  \n$— \n\nIssuance\nof new convertible note \n$8,364,000  \n$— \n\nIssuance of 282 shares of common stock as part of the settlement of notes payable and warrants \n$812,153  \n$— \n\nIssuance of 4,629 shares of common stock for services rendered \n$4,980,139  \n$— \n\nIssuance of 8,965 shares of common stock for conversion of liabilities \n$2,222,563  \n$— \n\nRight\nof use assets obtained in exchange for lease obligations \n$555,190  \n$883,652 \n\nReclassification\nof non-contingent portion of Series X redemption price \n$2,000,000  \n$— \n\nDerivative\nliability embedded in debt instruments \n$—  \n$269,038 \n\nIssuance of 356 shares of common stock as consideration of acquisitions of businesses \n$—  \n$3,601,272 \n\nIssuance of 49 shares of common stock as consideration of acquisitions of remaining non-controlling interest \n$—  \n$377,485 \n\nIssuance of 145 shares of common stock as part of the issuance of notes payable \n$—  \n$1,076,768 \n\nIssuance of 189 shares of common stock for services rendered \n$—  \n$4,730,355 \n\nIssuance of 30 shares of common stock for accounts payable \n$—  \n$150,000 \n\n  \n    \n   \n\nReconciliation\nof Cash, Cash equivalents and Restricted Cash \n    \n   \n\nCash and Cash equivalents \n$3,086,770  \n$1,442,901 \n\nRestricted\nCash \n 1,817,503  \n 2,137,707 \n\nCash,\nCash equivalents and Restricted Cash \n$4,904,273  \n$3,580,608 \n\n \n\n*See\nnotes to the consolidated financial statements.*\n\n \n\nF-7\n\n \n\n \n\n**La\nRosa Holdings Corp. and Subsidiaries**\n\n**Notes\nto the Consolidated Financial Statements**\n\n \n\n**Note\n1 — Basis of Presentation and Summary of Significant Accounting Policies**\n\n \n\n*Description\nof Business*\n\n \n\nLa\nRosa Holdings Corp. (the “Company”), incorporated in Nevada on June 14, 2021, is a holding company for six agent-centric,\ntechnology-integrated, cloud-based, multi-service real estate segments. The Company generates revenue primarily by providing person-to-person\nresidential and commercial real estate brokerage services to the public. In addition, the Company cross sells ancillary technology-based\nproducts and services to sales agents and the sales agents associated with the Company’s franchisees. The business is organized\nbased on the services provided internally to agents and to the public, which are residential and commercial real estate brokerages, franchising\nservices, real estate brokerage education and coaching, and property management services.\n\n \n\n*Nasdaq\nContinued Listing Requirements*\n\n \n\nOn\nOctober 10, 2024, the Company received a letter from the Nasdaq Listing Qualifications Department stating that, for the 30 consecutive\nbusiness day period between August 28, 2024 through October 9, 2024, the Company’s common stock had not maintained a minimum closing\nbid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the\n“Bid Price Rule”). On July 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications\nDepartment has determined that for the 10 consecutive business days, from July 7 through July 18, 2025, the closing bid price of the\nCompany’s common stock was at $1.00 per share or greater. Accordingly, the Company regained compliance with the Bid Price Rule,\nand the matter is now closed. \n\n \n\nOn\nMay 30, 2025, the Company received a letter from Nasdaq indicating that, because the Company’s stockholders’ equity as reported\nin its Quarterly Report on Form 10-Q for the period ended March 31, 2025 was $(83,377,044), the Company was no longer in compliance with\nNasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’\nequity for continued listing. On August 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications\nDepartment has determined that the Company complies with Nasdaq Listing Rule 5550(b)(1) based on the Company’s Form 10-Q for the\nperiod ended June 30, 2025, evidencing stockholders’ equity of $7,595,799, and the matter is now closed.\n\n \n\n*Going\nConcern and Management’s Plans*\n\n \n\nOn\nDecember 31, 2025, the Company had a cash balance of $3.1 million and working capital of $0.5 million.\n\n \n\nOn\nFebruary 4, 2025 (“Closing Date”), the Company entered into the securities purchase agreement (the “SPA”) with\nan institutional investor (“2025 Investor”) pursuant to which it agreed to issue and sell to the 2025 Investor upon the terms\nand conditions set forth in the SPA on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000\nwhich matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental\nWarrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250,\nin substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”).\n\n \n\nOn\nAugust 4, 2025 (the “Original Agreement Date”), the Company entered into the Equity Purchase Facility Agreement (“Existing\nFacility Agreement”) with an institutional investor (“Facility Investor”), pursuant to which the Facility Investor\ncommitted to purchase, subject to certain conditions and limitations, up to $150,000,000 (the “Commitment Amount”) in newly\nissued shares of the common stock of the Company (the “Facility”). In connection with the Facility, on the Original Agreement\nDate the Company entered into a Registration Rights Agreement (the “Existing RRA”) with the Facility Investor.\n\n \n\nOn\nSeptember 18, 2025 (“Amendment Date”), the Company and the Facility Investor entered into the Amended Facility Agreement,\npursuant to which the parties agreed to increase the Commitment Amount under the Facility from $150 million to $1.0 billion in shares\nof common stock. The Amended Facility Agreement amends and restates the Existing Facility Agreement in its entirety.\n\n \n\nThe\nCompany is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence\non key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial,\ntechnical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become\nprofitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable\nto the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses\nin the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that\nits existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating\nexpenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements. The Company\nwill be required to raise additional capital to service the remaining note and to fund ongoing operations.\n\n \n\nThe\nCompany has incurred recurring net losses, and the Company’s operations have not provided net positive cash flows. In view of these\nmatters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company plans on continuing\nto expand via acquisition, which will help achieve future profitability, and the Company has plans to raise capital from outside investors,\nas it has done in the past, to fund operating losses and to provide capital for further business acquisitions. There can be no assurance\nthe Company can successfully raise the capital needed.\n\n  \n\nF-8\n\n \n\n   \n\nDuring 2025, the Company received proceeds from\nthe sales of shares pursuant to the ATM Agreement of $7,496,361, funds from the sale of shares pursuant to the Facility in 2025 of $111,902\nand reverse split reclassifications for $2,633, for a total of $7,608,263 in additional financing from proceeds of sales of common stock.\n\n \n\n*Basis\nof Presentation and Consolidation*\n\n \n\nThe\nCompany prepares the consolidated financial statements in accordance with accounting principles generally accepted in the United States\nof America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction\nof liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties\nrelated to the Company’s going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements\ndo not necessarily purport to represent realizable or settlement values. The consolidated financial statements include the financial\nstatements of the Company, all entities that are wholly-owned by the Company, and all entities in which the Company has a controlling\nfinancial interest. All intercompany transactions and balances have been eliminated. Business combinations consummated during a reporting\nperiod are reflected in the Company’s results effective from the date of acquisition through the end of the reporting period.\n\n \n\nA\nnoncontrolling interest in a consolidated subsidiary represents the portion of the equity in a subsidiary not attributable, directly\nor indirectly, to the Company. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets\nand the presentation of net income is modified to present earnings attributed to controlling and noncontrolling interests.\n\n \n\n*Reclassifications\nof Prior Year Presentation*\n\n* *\n\nDuring\nthe preparation of the financial statements for the year ended December 31, 2025, the Company reclassified certain restricted cash balances\nat December 31, 2024 related to tenant deposits and escrow payable that had associated restrictions and obligations that extended beyond\ntwelve months to restricted cash, net of current. Further, the Company reclassified certain non-current security deposits and escrow\npayable at December 31, 2024 to current security deposits and escrow payable. These reclassification were made to conform with current\nperiod presentation and have not changed the results of operations of prior periods nor affected the cash flows previously reported. \n\n \n\n*Use\nof Estimates*\n\n \n\nThe\npreparation of financial statements in conformity with GAAP requires management to make certain judgments, estimates, and assumptions\nthat affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures in the accompanying notes. The\nCompany’s significant estimates relate to revenue recognition, business combinations, impairment of assets, stock-based compensation,\nand income taxes.\n\n \n\nThese\nestimates are based on management’s best estimates and judgment. Actual results may differ from these estimates. Estimates, judgments,\nand assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of\nfuture events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions, judgments, and estimates\ncould result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.\n\n \n\n*Reverse\nStock Splits*\n\n \n\nOn\nJuly 7, 2025, the Company effected a 1-for-80 reverse stock split of the shares of the Company’s common stock, par value\n$0.0001 per share (the “July Reverse Stock Split”). The July Reverse Stock Split reduced the number of shares of common stock\nof the Company outstanding from 58,323,795 shares to 729,113 shares, when considering the rounding up to the nearest whole\nshare adjustments. The number of authorized shares of common stock of the Company under its Articles of Incorporation remained unchanged\nat 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.\n\n \n\nOn January 21, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on January 26, 2026, (the “January Reverse Stock Split”).\n\n \n\nAs\na result of the January Reverse Stock Split, every ten shares of issued and outstanding common stock were automatically combined into\none issued and outstanding share of common stock. No fractional shares were issued as a result of the January Reverse Stock Split, fractional\nentitlements were rounded up to the next whole number. The Reverse Stock Split reduced the number of shares of common stock outstanding\nfrom 5,350,967 shares to 7,290 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged\nat 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.\n\n \n\nOn\nApril 16, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding,\neffective as of 12:01 a.m. EST on April 20, 2026, (the “April Reverse Stock Split”).\n\n \n\nF-9\n\n \n\n  \n\nAs\na result of the April Reverse Stock Split, every ten shares of issued and outstanding common stock were automatically combined into one\nissued and outstanding share of common stock. No fractional shares were issued as a result of the April Reverse Stock Split, fractional\nentitlements were rounded up to the next whole number. The April Reverse Stock Split reduced the number of shares of common stock outstanding\nfrom 10,505,123 shares to 1,050,594 shares. The number of authorized shares of common stock under the Articles of Incorporation remained\nunchanged at 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.\n\n \n\nAs\na result of the Reverse Stock Splits, all historical share and per share amounts disclosed in the consolidated financial statements have\nbeen converted to the post-split share amounts.\n\n \n\n*Cash\nand Restricted Cash*\n\n \n\nCash\nincludes cash in banks, cash on hand, and sweep deposits.\n\n \n\nRestricted\ncash consists of cash held by the Company for certain security deposits and rent collected by the Company as part of its property management\nbusiness, which will be due to owners or tenants in the future. The Company recognizes a corresponding deposit liability until the funds\nare released. The Company reduces deposit liability when the associated restricted cash is transferred from escrow.\n\n \n\n*Accounts\nReceivable and Allowance for Credit Losses*\n\n \n\nThe\nCompany’s trade accounts receivable consist of balances due from agents, tenants, franchisees, and commissions for closings and\nare presented on the consolidated balance sheets net of the allowance for credit losses. The allowance is determined by a number of factors,\nincluding age of the receivable, current economic conditions, historical losses, and management’s assessment of the financial condition\nof the debtor. Receivables are written off once they are deemed uncollectible, which may arise when the debtor is deemed unable to pay\nthe amounts owed to the Company. The allowance for credit losses was $179,643 and 166,504 as of December 31, 2025 and 2024, respectively.\nEstimates of uncollectible accounts receivable are recorded to general and administrative expense on the consolidated statements of operations.\n\n  \n\n   \nBalance at  \n   \nDeductions  \nBalance at \n\n   \nBeginning of  \nCharged to  \nfrom the  \nEnd of \n\n   \nPeriod  \nExpenses  \nAllowance  \nPeriod \n\nTwelve\nMonths ended December 31, 2025 Allowance for Credit Losses  \n$166,504  \n$509,963  \n$(496,824) \n$179,643 \n\nTwelve\nMonths ended December 31, 2024 Allowance for Credit Losses  \n$83,456  \n$79,573  \n$3,475  \n$166,504 \n\n \n\n*Contract\nLiabilities and Performance Obligations*\n\n \n\nContract\nliabilities consist of unsatisfied performance obligations related to annual dues received at the start of the calendar year. As of December\n31, 2025 and 2024, the Company has approximately $171,100 and $7,747, respectively, of remaining performance obligations, all of which\nare recognized into revenue by the end of the calendar year. The Company has elected to exclude disclosures regarding remaining performance\nobligations that have an original expected duration of one year or less.\n\n \n\n*Concentration\nof Credit Risk*\n\n \n\nFinancial\ninstruments that potentially subject the Company to concentrations of credit risk consist of cash. The Company reduces credit risk by\nplacing its cash and cash equivalents with major financial institutions with high credit ratings. The Company maintains certain bank\naccounts in excess of FDIC insured limits of $250,000.\n\n \n\n*Leases*\n\n \n\nIn\naccordance with Financial Accounting Standards Board (“FASB”) ASC Topic 842, *Leases*, (“ASC 842”), the\nCompany determines whether an arrangement is or contains a lease at contract inception. Right-of-use assets and lease liabilities, which\nare disclosed on the consolidated balance sheets, are recognized at the commencement date of the lease based on the present value of\nthe lease payments over the lease term using the Company’s incremental borrowing rate on the lease commencement date. Since implicit\nrates within the Company’s operating leases are generally not determinable, the Company uses the incremental borrowing rate at\nthe lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing\nrate requires judgment. The Company determines the incremental borrowing rate for each lease using its estimated borrowing rate, adjusted\nfor various factors including level of collateralization and term to align with the terms of the lease. Lease expense is recognized\non a straight-line basis over the term of the lease. Short-term leases, defined as leases with an initial term of twelve months or less,\nare not recorded on the consolidated balance sheets.\n\n \n\nF-10\n\n \n\n \n\n*Property\nand Equipment, Net*\n\n \n\nProperty\nand equipment, net is stated at cost less accumulated depreciation and accumulated impairment, if any. Cost of maintenance and repairs\nthat do not improve or extend the lives of the respective assets are expensed as incurred. Upon a disposition, the cost and related accumulated\ndepreciation are removed from the accounts and any related gain or loss is reflected in earnings. Depreciation is calculated on a straight-line\nbasis over the estimated useful lives of the assets, as follows:\n\n \n\nComputer Equipment   3 years \n\nFurniture and fixtures   7 years \n\n \n\n*Long-lived\nAssets Including Acquired Intangible Assets*\n\n \n\nLong-lived\nassets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset\ngroup) may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the future undiscounted\ncash flows expected to result from the use and eventual disposition of the asset. If the asset is not recoverable, its carrying amount\nwould be adjusted down to its fair value. Impairment of long-lived assets for the year ended December 31, 2025 was approximately $0.7\nmillion. There was no impairment charge recorded for the year ended December 31, 2024.\n\n \n\nIntangible\nassets are stated at cost less accumulated amortization and accumulated impairment, if any. Amortization is calculated on a straight-line\nbasis over the estimated useful lives of the definite-lived intangible assets, as follows:\n\n \n\n \n \n**Useful\nLife**\n \n\nFranchise agreement\n \n10 to 11 years\n \n\nAgent relationships\n \n8 to 11 years\n \n\nReal estate listings\n \n1 year\n \n\nNon-compete agreements\n \n4 years\n \n\n \n\n*Business\nCombinations*\n\n \n\nThe\nCompany completed a number of acquisitions during 2024 and will acquire additional businesses in the future. The results of businesses\nacquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition.\nThe Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity, or a combination\nof the two, in a business combination to the identifiable assets and liabilities of the acquired business at their acquisition date fair\nvalues. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as\ngoodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates,\nincluding the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable\ncompanies.\n\n \n\nTo\ndate, the assets acquired and liabilities assumed in the Company’s business combinations have primarily consisted of goodwill and\nfinite-lived intangible assets, consisting primarily of franchise agreements, agent relationships, real estate listings, non-compete\nagreements, and right-of-use assets. The estimated fair values and useful lives of identifiable intangible assets are based on many factors,\nincluding estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business\nacquired, and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair\nvalues and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological\ndevelopments, economic conditions and competition. In connection with the determination of fair values, the Company engages independent\nappraisal firms to assist with the valuation of intangible assets acquired and certain assumed obligations.\n\n \n\nTransaction\ncosts associated with business combinations are expensed as incurred.\n\n \n\n*Goodwill*\n\n \n\nGoodwill\nis the excess of cost over the fair value of net assets acquired. Goodwill is not amortized but tested for impairment annually or more\nfrequently if certain circumstances indicate a possible impairment may exist. The Company performed a qualitative assessment as of October\n1, 2025 and determined it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative\nassessment included, but is not limited to, market and macroeconomic conditions, cost factors, cash flows, changes in key management\npersonnel, and the Company’s share price. The result of this assessment determines whether it is necessary to perform a quantitative\ngoodwill impairment test. As a result of this assessment, the Company has determined an impairment of goodwill as for the year ended\nDecember 31, 2025 of approximately $6.2 million. The Company recorded an impairment of goodwill of approximately $0.8 million for the\nyear ended December 31, 2024.\n\n \n\nF-11\n\n \n\n \n\n*Revenue\nRecognition*\n\n \n\nThe\nCompany applies the provision of FASB ASC 606, *Revenue from Contracts with Customers* (“ASC 606”). The Company measures\nrevenue within the scope of ASC 606 by applying the following five steps: (i) identify the contract(s) with a customer; (ii) identify\nthe performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance\nobligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception,\nthe Company assesses the goods or services promised within each contract that falls under the scope of ASC 606, determines those that\nare performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the\namount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.\nThe application of these five steps necessitates the development of assumptions that require judgment.\n\n \n\nThe\nCompany records revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance\nobligations in the client arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good or\nservice to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue\nwhen or as the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized when a customer obtains\ncontrol of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those\ngoods or services.\n\n \n\nReal\nEstate Brokerage Services (Residential and Commercial)\n\n \n\nThe\nCompany serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions.\nRevenue from real estate brokerage services (residential) mainly consists of commissions generated from real estate brokerage services.\nThe Company is contractually obligated to provide for the fulfillment of transfers of real estate between buyers and sellers. The Company\nprovides these services itself and controls the services of its agents necessary to legally transfer the real estate. Consequently, the\nCompany is defined as the principal in the transaction. The Company, as principal, satisfies its obligation upon the closing of a real\nestate transaction. The Company has concluded that agents are not employees of the Company, rather deemed to be independent contractors.\nUpon satisfaction of its obligation, the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The\ntransaction price is calculated by applying the Company’s portion of the agreed-upon commission rate to the property’s selling\nprice. The Company may provide services to the buyer, seller, or both parties to a transaction. In instances in which the Company represents\nboth the buyer and the seller in a transaction, it recognizes the full commission on the transaction. Commissions revenue contains a\nsingle performance obligation that is satisfied upon the closing of a real estate transaction, at which point the entire transaction\nprice is earned. The Company’s customers remit payment for the Company’s services to the title company or attorney closing\nthe sale of property at the time of closing. The Company is not entitled to any commission until the performance obligation is satisfied\nand is not owed any commission for unsuccessful transactions, even if services have been provided. In addition to commission, revenue\nfrom real estate brokerage services (residential) consists of annual and monthly dues charged to the agents for providing systems, accounting,\nmarketing tools and compliance services. The annual and monthly dues are recognized each month as services are provided.\n\n \n\nFranchising\nServices\n\n \n\nThe\nCompany’s franchise agreements offer the following benefits to the franchisee: common use and promotion of La Rosa Realty trademark;\ndistinctive sales and promotional materials; access to technology and training; and recommended procedures for operation of La Rosa Realty\nfranchises. The Company concluded that these benefits are highly related and part of one performance obligation for each franchise agreement,\na license of symbolic intellectual property that is billed through a variety of fees including (i) initial franchise fees, (ii) annual\ndues and (iii) royalty fees. Initial franchise fees consist of a fixed fee payable upon signing the franchise agreement. Annual dues\nare calculated at a fixed fee per agent (prorated for any partial year) payable annually before the 10th day of January or within 10\ndays after each agent commences their association with the franchise. Royalty fees are calculated as the greater of a (a) fixed percentage\nof gross commission income for the period which is made up of all commissions, transaction fees, property management fees, and monthly\nfees earned by the Franchisee and the Franchisee’s independent sales associates, agents, representatives, contractors, employees,\npartners, directors, officers, owners, or affiliates, regardless of whether or not such individuals or affiliates are entitled to retain\nall or part of such gross commission income, or (b) a fixed monthly fee.\n\n \n\nF-12\n\n \n\n \n\nCoaching\nServices\n\n \n\nThe\nCompany provides mandatory training and guidance to newly licensed agents for their first four sales transactions. For each of the four\ntransactions the newly licensed agents completes, La Rosa Coaching earns 7% for the brokerage who sponsors the agent, which may be La\nRosa Realty, earns 6% of the commission. Coaches also provide optional special education services throughout the year to agents.\n\n \n\nProperty\nManagement\n\n \n\nThe\nCompany provides property management services on a contractual basis for owners who lease their residential properties. These services\ninclude managing daily operations of the property, tenant background screening, overseeing the tenant application process, and accounting\nservices. The Company is compensated for its services through a flat monthly management fee. At the option of the owner, the Company\ncan also facilitate and account for repair and remodeling costs for properties under management. These costs are not included in the\ntransaction price as the customer is the party paying and receiving these services. Property management services represent a series of\ndistinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue\nis recognized at the end of each period for the fees associated with the services performed.\n\n \n\nThe\namount of revenue recognized is presented net reflecting only the fee retained by Property Management for any services provided by the\nCompany.\n\n \n\nTitle\nSettlement and Insurance\n\n \n\nThe\nCompany provides title services Revenue from title insurance premiums is recognized at the closing of the real estate transaction, when\nthe title insurance policy is issued and the performance obligation is satisfied. Fees for title searches, escrow services, and other\nrelated services are recognized as the services are performed. Any advance payments received are recorded as deferred revenue until the\nrelated services are completed.\n\n \n\n*Segment\nReporting*\n\n** **\n\nOperating\nsegments are identified as components of an enterprise about which separate discrete financial information is available for evaluation\nby the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance.\nThe Company operates six separate and distinct segments, as the Chief Operating Decision Maker (“CODM”) reviews financial\nperformance for each and makes decisions on a consolidated basis.\n\n \n\n*Cost\nof Revenue*\n\n \n\nCost\nof revenue consists primarily of agent commissions, less fees paid by the agents owed to the Company and the cost of interchange and\nother fees for credit card processing services.\n\n \n\n*Advertising*\n\n \n\nAdvertising\ncosts are expensed as incurred. Advertising expenses for the years ended December 31, 2025 and 2024 was $968,962 and $272,059, respectively,\nand included in sales and marketing expenses in the consolidated statements of operations.\n\n \n\n*Debt\nDiscounts and Debt Issuance Costs*\n\n \n\nDebt\ndiscounts and costs incurred in connection with obtaining new debt financing are deferred and amortized over the life of the related\nfinancing. Debt discounts and deferred costs are recognized as a direct reduction in the carrying amount of the debt instrument on the\nconsolidated balance sheets and are recognized on the consolidated statements of operations to amortization of financing fees over the\nterm of the related debt using the effective interest method. For the years ended December 31, 2025 and 2024, the Company recorded amortization\nof debt discounts and debt issuance costs of $63,160 and 649,138, respectively. Upon abandonment of a pending financing transaction,\nthe related deferred financing costs are charged to expense.\n\n \n\n*Deferred\nOffering Costs*\n\n \n\nThe\nCompany capitalized certain legal, accounting, and other third-party fees that are directly associated with in-process equity financings\nas deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded\nin stockholders’ equity as a reduction of additional paid-in capital. Should the planned equity financing be abandoned, the deferred\noffering costs would be expensed immediately as a charge to operating expenses in the consolidated statement of operations. There were\nno deferred offering costs for the years ended December 31, 2025 or 2024.\n\n \n\nF-13\n\n \n\n \n\n*Income\nTaxes*\n\n \n\nThe\nCompany accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize\ndeferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets\nand liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.\n\n \n\nThe\nprovision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial\nand tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of\nassets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward\nperiod available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred\nincome tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred\ntax asset will not be realized. The evaluation, as prescribed by ASC 740-10, includes the consideration of all available evidence, both\npositive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future\nreversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and\ncarryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from\nexpiring unused.\n\n \n\nThe\nCompany accounts for uncertainties in income taxes under the provisions of ASC 740 which clarify the accounting for uncertainty in income\ntaxes recognized in an enterprise’s financial statements. The standard prescribes a recognition threshold and measurement attribute\nfor the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic\nprovides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.\n\n \n\nThe\nCompany adopted ASU 2023-09, *Income Taxes (Topic 740)-Improvements to Income Tax Disclosures*. This update related to improvements\nto income tax disclosures which the Company adopted prospectively this fiscal year beginning January 1, 2025. The additional disclosures\nhave been included in *Note 14 – Income Taxes*.\n\n \n\n*Stock\nBased Compensation*\n\n \n\nThe\nCompany issues stock-based awards to employees, directors, and non-employees that are generally in the form of stock options, restricted\nshares, or restricted stock units (“RSUs”). Compensation cost for equity awards is measured at their grant-date fair value,\nand in the case of restricted shares and RSUs, fair value is determined based on the price of the Company’s underlying Common Stock.\nThe grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The Black-Scholes model requires\nthe use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average\nexpected life of the stock options.\n\n \n\nThe\nexpense for awards is recognized over the requisite service period (generally the vesting period of the award). The Company has elected\nto treat awards with only service conditions and with graded vesting as one award. Consequently, the total compensation expense is recognized\nstraight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of\nthe grant date fair value of the award that is vested at that date. The Company recognizes forfeitures as they occur.\n\n \n\n*Recently\nAdopted Accounting Standards*\n\n \n\nIn\nDecember 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740)-Improvements to Income Tax Disclosures*. This update related\nto improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures\nfor the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning\nafter December 15, 2024. The Company adopted the guidance prospectively in the fiscal year beginning January 1, 2025 and additional disclosures\nhave been included in *Note 14 – Income Taxes*.\n\n \n\nF-14\n\n \n\n \n\n*Recently\nIssued Accounting Standards Not Yet Adopted*\n\n \n\nIn\nApril 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred\nStock (“ASU 2026-01”). The guidance in ASU 2026-01 clarifies how issuers initially measure paid-in-kind (“PIK”)\ndividends on equity-classified preferred stock by requiring issuers to use the PIK dividend rate stated in the preferred stock agreement.\nASU 2026-01 will be effective for the Company’s annual reporting periods beginning after December 15, 2026, and for interim reporting\nperiods within those annual periods, with early adoption permitted. Entities may apply the amendments on either a prospective basis or\na modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date.\nThe Company is currently evaluating the impact that adoption of ASU 2026-01 may have on its consolidated financial statements.\n\n \n\nIn\nSeptember 2025, the FASB issued ASU 2025-7, *Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606).*The amendments in this Update exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on\noperations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables\nbased on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial\nliability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated\nunder the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and\nput options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning\nafter December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning\nof an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its\nconsolidated financial statements.\n\n \n\nIn\nSeptember 2025, the FASB issued ASU 2025-06, *Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40).*The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project\nstages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following\noccur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed\nand the software will be used to perform the function intended (referred to as the “probable-to complete recognition threshold”).\nThe amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim\nreporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period.\nThe Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.\n\n \n\nIn\nJuly 2025, the FASB issued ASU 2025-05, *Financial Instruments—Credit Losses (Topic 326).*The amendments in this Update provide\n(1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when\nestimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for\nunder Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting\nperiods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial\nstatements have not yet been issued or made available for issuance. The Company is currently evaluating the impact that the adoption\nof this new standard will have on its consolidated financial statements.\n\n \n\nIn\nMay 2025, the FASB issued ASU 2025-03, *Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting\nAcquirer in the Acquisition of a Variable Interest Entity.*The amendments in this Update require an entity involved in an acquisition\ntransaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business\nto consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments\nin this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods\nwithin those annual reporting periods. The Company is currently evaluating the impact that the adoption of this new standard will have\non its consolidated financial statements. A Variable Interest Entity (VIE) is a legal entity in which an investor holds a controlling\ninterest that is not based on majority voting rights.\n\n \n\nIn\nJanuary 2025, the FASB issued ASU 2025-01, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures\n(Subtopic 220-40)- Clarifying the Effective Date.*The amendment in this Update amends the effective date of Update 2024-03 to clarify\nthat all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and\ninterim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that\nthe adoption of this new standard will have on its consolidated financial statements.\n\n \n\nF-15\n\n \n\n \n\n**Note\n2 — Restatement of Previously Issued Consolidated Financial Statements**\n\n \n\nIn\nconnection with the preparation of our consolidated financial statements for the year ended December 31, 2025, the Company identified\nerrors related to revenues and cost of revenue recognition in its previously issued (i) consolidated financial statements as of and for\nthe year ended December 31, 2024 included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Period”),\nand (ii) unaudited interim condensed consolidated financial statements for each quarterly and year-to-date period included in its Quarterly\nReports on Form 10-Q for the interim periods ended March 31, 2024, June 30, 2024, September 30, 2024, March 31, 2025, June 30, 2025 and\nSeptember 30, 2025 (the “Interim Periods”, which, together with the Annual Period, the “Affected Periods”).\n\n \n\nDuring\n2024, the Company incorrectly recorded certain property management fee revenue inclusive of tenant rent revenues on a gross basis. Upon\nreview of the underlying contractual arrangements and evaluation under ASC 606, Revenue from Contracts with Customers, management concluded\nthat the Company acted as an agent rather than as a principal for these arrangements. As a result, the Company has corrected revenues\nduring the Affected Periods to reduce property management revenue to the fees received (the “Revenues Adjustment”).\n\n \n\nAdditionally,\nthe Company has determined that costs of revenue should be reduced equivalently to the amount of the revenues restated. As a result,\nthe Company has recorded an adjustment to its consolidated financial statements during the Affected Periods (together with the Revenues\nAdjustment, the “Restatement Adjustments”), as the Company was previously incorrectly presenting payments to property owners\ninclusive of tenant rent related to tenant revenues as cost of revenues. \n\n \n\nThe\nCompany evaluated the materiality of these misstatements both qualitatively and quantitatively in accordance with Staff Accounting Bulletin\n(“SAB”) No. 99, *Materiality*, and SAB No. 108, *Considering the Effects of Prior Year Misstatements in\nCurrent Year Financial Statements*, and determined the effect of correcting these misstatements was material to the Affected Periods.\nAs a result of the material misstatements, the Company has restated its consolidated financial statements for the Affected Periods in\naccordance with ASC 250, Accounting Changes and Error Corrections (the “Restated Consolidated Financial Statements”).\n\n \n\nA\nreconciliation from the amounts previously reported for the Affected Periods to the restated amounts in the Restated Consolidated Financial\nStatements is provided for the impacted financial statement line items below for the consolidated statement of operations for the year\nended December 31, 2024. The amounts labeled “Restatement Adjustments” represent the effects of the Restatement Adjustments.\n\n \n\nThe\nfollowing tables present the effects of the Restatement Adjustments on the Company’s consolidated statements of operations for\nthe year ended December 31, 2024:\n\n \n\n  \nFor the Year\nEnded \n\n  \nDecember\n31, 2024 \n\n  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated \n\nRevenue \n$69,448,786  \n$(10,766,647) \n$58,682,139 \n\nCost of revenue \n$63,495,507  \n$(10,766,647) \n$52,728,860 \n\n \n\nNote\n1 – Basis of Presentation and Summary of Significant Accounting policies and Note 15 – Segments have been updated and restated,\nas applicable, to reflect the impact of the Restatement Adjustments described above.\n\n \n\nRefer\nto Note 3 Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements for details of the effect of\nRestatement Adjustments on the interim periods.\n\n \n\n**Note\n3 — Restatement Of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements**\n\n \n\nThe\nfollowing tables present the effects of the Restatement Adjustments described in Note 2 - Restatement of Previously Issued Consolidated\nFinancial Statements on the Company’s unaudited interim condensed consolidated financial statements for the periods indicated:\n\n \n\n  \nFor the Three\nMonths Ended \n\n  \nMarch\n31, 2024 \n\n  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$13,088,899  \n$(2,452,365) \n$10,636,534 \n\nCost of revenue \n$11,926,902  \n$(2,452,365) \n$9,474,537 \n\n \n\nF-16\n\n \n\n \n\n  \nFor the Three\nMonths Ended  \nFor the Six\nMonths Ended \n\n  \nJune\n30, 2024  \nJune\n30, 2024 \n\n  \nAs Previously  \nRestatement  \nAs  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$19,051,420  \n$(2,685,430) \n$16,365,990  \n$32,140,319  \n$(5,137,795) \n$27,002,524 \n\nCost of revenue \n$17,465,109  \n$(2,685,430) \n$14,779,679  \n$29,392,011  \n$(5,137,795) \n$24,254,216 \n\n \n\n  \nFor the Three\nMonths Ended  \nFor the Nine\nMonths Ended \n\n  \nSeptember\n30, 2024  \nSeptember\n30, 2024 \n\n  \nAs Previously  \nRestatement  \nAs  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$19,593,036  \n$(2,760,573) \n$16,832,463  \n$51,733,355  \n$(7,898,368) \n$43,834,987 \n\nCost of revenue \n$17,957,130  \n$(2,760,573) \n$15,196,557  \n$47,349,141  \n$(7,898,368) \n$39,450,773 \n\n \n\n  \nFor the Three\nMonths Ended \n\n  \nMarch\n31, 2025 \n\n  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$17,514,394  \n$(2,878,620) \n$14,635,774 \n\nCost of revenue \n$15,976,726  \n$(2,878,620) \n$13,098,106 \n\n \n\n  \nFor the Three\nMonths Ended  \nFor the Six\nMonths Ended \n\n  \nJune\n30, 2025  \nJune\n30, 2025 \n\n  \nAs Previously  \nRestatement  \nAs  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$23,214,218  \n$(2,982,121) \n$20,232,097  \n$40,728,612  \n$(5,860,741) \n$34,867,871 \n\nCost of revenue \n$21,361,990  \n$(2,982,121) \n$18,379,869  \n$37,338,716  \n$(5,860,741) \n$31,477,975 \n\n \n\n  \nFor the Three\nMonths Ended  \nFor the Nine\nMonths Ended \n\n  \nSeptember\n30, 2025  \nSeptember\n30, 2025 \n\n  \nAs Previously  \nRestatement  \nAs  \nAs Previously  \nRestatement  \nAs \n\n  \nStated  \nAdjustments  \nRestated  \nStated  \nAdjustments  \nRestated \n\n  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited)  \n(unaudited) \n\nRevenue \n$20,216,143  \n$(3,007,356) \n$17,208,787  \n$60,944,755  \n$(8,868,097) \n$52,076,658 \n\nCost of revenue \n$18,507,962  \n$(3,007,356) \n$15,500,606  \n$55,846,678  \n$(8,868,097) \n$46,978,581 \n\n \n\nF-17\n\n \n\n \n\n**Note\n4 — Fair Value Measurements**\n\n \n\nFair\nvalue is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market\nparticipants at the measurement date. The Company follows ASC 820, *Fair Value Measurement*, for financial assets and liabilities\nmeasured at fair value on a recurring basis. The Company uses the fair value hierarchy to categorize the financial instruments measured\nat fair value based on the available inputs to the valuation and the degree to which they are observable or not observable in the market.\n\n \n\nThe\nthree levels of the fair value hierarchy are as follows:\n\n \n\n \n●\nLevel 1 – Quoted\nprices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;\n\n \n\n \n●\nLevel 2 – Quoted\nprices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active\nmarkets or financial instruments for which significant inputs are observable, either directly or indirectly; and\n\n \n\n \n●\nLevel 3 – Prices\nor valuations that require inputs that are both significant to the fair value measurement and unobservable.\n\n \n\nA\nfinancial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the\nfair value measurement. The Company has evaluated the estimated fair value of financial instruments using available market information\nand valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant\neffect on the estimated fair value amounts.\n\n \n\nThe\ncarrying amounts of financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses reflected in the\nconsolidated financial statements approximate fair value due to their short-term maturities.\n\n \n\nThe\nCompany determined that during the years ended December 31, 2025 and 2024, certain instruments qualified as derivative liabilities and\nwere recorded at fair value on the date of issuance and re-measured at fair value each reporting period with the change reported in earnings.\nThe fair value of these instruments was computed using the Black Scholes model, incorporating transaction details such as the assumed\nprice of the Company’s Common Stock at an initial public offering, contractual terms, maturity and risk-free rates, as well as\nassumptions about future financings, volatility, and holder behavior.\n\n \n\nThere\nwere no derivative liabilities recorded as of December 31, 2025. See *Note 9 –Warrants* for more information.\n\n \n\n*Securities\nPurchase Agreement*\n\n \n\nOn February\n4, 2025, the Company entered into an SPA with an investor (“2025 Investor”) for a Senior Secured Convertible Note (“Convertible\nNote”) with a face value of $5,500,000 and 16 Incremental Warrants exercisable for a face amount of $2,500,000 each. See\n*Note 8 – Borrowings for further discussion*.\n\n \n\nF-18\n\n \n\n \n\nThe\npurchase price paid by the Investor under the SPA for the Convertible Note and Incremental Warrants was $4,963,750 in gross proceeds\nof which $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance,\nLLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding,\nLLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor,\nleaving net proceeds remaining of $3,408,585. It was determined that the note and warrants within this transaction met the requirements\nfor the Fair Value Option under ASC 825, which the Company elected. Using the fair value option, the Convertible Note\nis required to be recorded at initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated\nfair value of the notes are recognized as gain/loss on fair value adjustment within other income (expenses) in the Company’s consolidated\nstatements of operations. \n\n \n\nAs\na result of applying the fair value option, direct costs and fees related to the Convertible Note were expensed as incurred and\nwere not deferred.\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 Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”)\n6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”).\nThe Convertible Note remained outstanding post-Exchange.\n\n \n\nPursuant\nto the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company, par value\n$0.0001 per share (the “Common Stock”) in excess of 19.99% of the Company’s outstanding shares of Common Stock is conditional\nupon obtaining the approval of the Company’s shareholders in accordance with the rules and regulations of the Nasdaq Capital Market\n(“Shareholder Approval”). The Company agreed to convene a meeting of stockholders to obtain Shareholder Approval within 120\ndays after the date of the Exchange Agreement. The Company obtained the Shareholder Approval effective as of August 11, 2025.\n\n \n\nThe\nCompany determined the Exchange met the criteria for liability derecognition of the Incremental Warrants as the Exchange represented\nsettlement of the liability through delivery of other financial assets. As the warrant was an equity contract classified as a liability\nat issuance, upon settlement, the equity contract was required to be marked to market. The Company recognized a change in fair value\nof $10,240,000 measured as the difference between the fair value of the Incremental Warrants at February 4, 2025, and their fair value\nof $90,560,000 immediately prior to the Exchange. The Series B Preferred Stock issued to the Investor in satisfaction of the Incremental\nWarrants in the Exchange had an issuance date fair value of $8,261,000 based on the following assumptions:\n\n \n\n  \n**June\n18,\n2025** \n\nStated\nValue \n$6,000,000 \n\nDividend\nRate \n 0.0%\n\nConversion Price \n$20.00 \n\nAlternate\nConversion Amount \n$9.60 \n\nRequired\nPremium \n 125.0%\n\nStock Price \n$10.40 \n\nVWAP \n$10.40 \n\n \n\nAt\nthe closing of the Exchange, the Company recognized a gain on settlement of the Incremental Warrants of $82,299,000, measured as the\ndifference between the adjusted fair value of the Incremental Warrants immediately prior to the Exchange and the fair value of the Series\nB Preferred Stock at issuance, net of par value. The Company evaluated the classification of its Series B Preferred Stock and concluded\nthat it is more akin to equity than debt and accounted for as permanent equity. Accordingly, the Series B Preferred Stock is presented\nwithin permanent equity in the accompanying consolidated financial statements. The shares were issued at their par value (rounded to\n$1) with the remaining fair value of the Series B Preferred Stock in excess of par value, $8,260,999 being recorded to additional paid-in\ncapital.\n\n \n\nF-19\n\n \n\n \n\nThe\nfollowing tables provide the fair value and contractual principal balance outstanding on the Convertible Note and the Incremental Warrants\naccounted for under the fair value option as of December 31, 2025, June 18, 2025, June 26, 2025 and February 4, 2025:\n\n \n\n  \nAs of  \nAs of  \nAs of \n\n  \nDecember 31,  \nJune\n26,  \nFebruary\n4, \n\n  \n2025  \n2025  \n2025 \n\nConvertible Note fair value \n 5,818,000  \n 12,477,000  \n 33,000,000 \n\nConvertible Note, contractual principal outstanding \n 4,050,000  \n 5,500,000  \n 5,500,000 \n\n \n\n  \nAs of  \nAs of  \nAs of \n\n  \nDecember\n31,  \nJune\n18,  \nFebruary\n4, \n\n  \n2025  \n2025  \n2025 \n\nIncremental Warrants \n       -  \n 90,560,000  \n 100,800,000 \n\n \n\nThe\nfair value of the Convertible Note was calculated using a fair value analysis considering the following factors and assumptions:\n\n \n\n** **** **\n**December\n31,**** **** **\n**June 26,\n2025\nPost**** **** **\n**June 26,\n2025\nPre-**** **** **\n**February\n4,**** **\n\n** **** **\n**2025**** **** **\n**Amendment(2)**** **** **\n**Amendment(2)**** **** **\n**2025(1)**** **\n\nStock Price \n$6.34  \n$116.00  \n$116.00  \n$3,200.00 \n\nConversion Price \n$29,116.16  \n$363.90  \n$363.90  \n$3,600.00 \n\nAlternate Conversion Price \n$48.69  \n$94.40  \n$63.30  \n$633.00 \n\nAlternate Conversion Premium \n 120.00% \n 120.00% \n 120.00% \n 120.00%\n\nRedemption Premium \n 120.00% \n 120.00% \n 120.00% \n 120.00%\n\nInterest Rate \n 12.00% \n 12.00% \n 12.00% \n 12.00%\n\n \n\n(1) The fair value analysis of the Convertible Note was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction.\n\n \n\n(2) The amendment to the Note on June 26, 2025, corrected the term of the Note from 1 year to 2 years and adjusted the alternate conversion price from the “lesser” of 95% VWAP and the floor price to the “greater” of.\n\n \n\nF-20\n\n \n\n \n\nThe\nfair value of the Incremental Warrants were calculated using the Monte Carlo simulation with the following factors, assumptions\nand methodologies from February 4, 2025 when the Company entered into the agreement and right before the exchange on June 18, 2025:\n\n \n\n   June 18,   February 4, \n\n   **2025(1)**   **2025(1)** \n\nFace Value  $2,500,000   $2,500,000 \n\nExercise Price  $2,256,250   $2,256,250 \n\nStock Price  $1,000.40   $3,200.00 \n\nExercise Threshold   20% of Min price    20% of Min price \n\nValuation per Incremental Warrant upon exercise  $11,320,000   $12,600,000 \n\nDiscount Rate   36.97%   28.70%\n\nRisk Free Rate   4.20%   4.18%\n\nAnnualized Volatility   92.00%   88.0%\n\nForecast horizon (years)   0.08    0.08 \n\n \n\n(1) The fair value analysis of the Incremental Warrants was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction.\n\n \n\nA\nsummary of the Company’s liabilities measured at fair value on a recurring basis is as follows:\n\n \n\n  \nAs\nof December 31, 2025 \n\n  \nLevel\n1  \nLevel\n2  \nLevel\n3  \nTotal \n\nLiabilities \n   \n   \n   \n  \n\nDerivative\nliabilities \n$-  \n$-  \n$-  \n$- \n\nConvertible\nnote \n$-  \n$-  \n$5,818,000  \n$5,818,000 \n\n** **\n\n  \nAs\nof December 31, 2024 \n\n  \nLevel\n1  \nLevel\n2  \nLevel\n3  \nTotal \n\nLiabilities \n   \n   \n   \n  \n\nDerivative\nliabilities \n$-  \n$-  \n$1,607,544  \n$1,607,544 \n\n  \n\nAt\nDecember 31, 2024, the estimated fair value of the derivative liability tied to the three vested warrants held by an institutional investor\nand remeasured on a recurring basis amounted to $1,607,544.\n\n \n\nAs\nof December 31, 2025, warrants held by an institutional investor were eliminated through exercising and a redemption and cancellation\nagreement for $379,083. The Company recorded a derivative liability related to the Incremental Warrants issued in connection with the\nSPA dated February 4, 2025. The Incremental Warrants’ fair value at date of issuance was $100,800,000 and were settled by June\n30, 2025, with a gain recorded of $82,299,000. The initial analysis assumes immediate conversion upon issuance and does not incorporate\nownership limitations or conversion blockers that could otherwise restrict full exercise or conversion. On June 26, 2025, the Company\ndetermined that modifications of the existing Senior Secured Convertible Note during the year qualified as an extinguishment. \n\n \n\nF-21\n\n \n\n \n\nThe\nfollowing tables provide a summary of changes in fair value associated with the Level 3 liabilities for the years ended December 31,\n2025 and 2024:\n\n \n\nDerivative\nliabilities\n\n \n\n  \n2025  \n2024 \n\nBalance – January 1, \n$1,607,544  \n$- \n\nIssuance of derivative liability \n 100,800,000  \n 269,038 \n\nCash paid to settle derivative liability \n (379,083) \n - \n\nIssuance of cashless shares for exercising\nwarrants \n (328,587) \n - \n\nExtinguishment of derivative liability \n (90,831,585) \n - \n\nChange in fair market value - extinguished\nwarrants \n 8,571,711  \n 1,338,506 \n\nChange in fair market\nvalue - new warrants \n (19,440,000) \n - \n\nBalance – December\n31, \n$-  \n$1,607,544 \n\n \n\nConvertible\nNote\n\n \n\nBalance – January 1,\n2025 \n$- \n\nIssuance of Convertible Note \n 41,364,000 \n\nChange in fair value of Convertible\nNote \n (21,195,000)\n\nConversion to equity \n (1,874,000)\n\nExtinguishment\nof Convertible Note \n (12,477,000)\n\nBalance\n– December 31, 2025 \n$5,818,000 \n\n \n\nThe\nfair value of the derivative liability related to the three eliminated Warrants, was computed using the Black-Scholes model both when\nissued and on the balance sheet date. To determine the fair value, the Company incorporated transaction details such as the price of\nthe Company’s common stock, contractual terms, maturity, and risk-free rates, as well as assumptions about future financings, volatility,\nprobability of contingencies, and holder behavior. The fair value of the derivative liability on the issuance date and the balance sheet\ndate and the assumptions used in the Black-Scholes model are set forth in the table below.\n\n \n\n  \nDecember 31, \n\n  \n2024 \n\nWeighted\naverage fair value \n$      0.87 \n\nDividend\nyield \n — \n\nExpected\nvolatility factor \n 72.7%\n\nRisk-free\ninterest rate \n 4.3%\n\nExpected\nlife (in years) \n 5.5 \n\n \n\nF-22\n\n \n\n \n\n**Note\n5 — Business Combinations**\n\n \n\nDuring\n2024, the Company acquired majority ownership of the following franchisees and affiliates of the Company: La Rosa Realty Winter Garden\nLLC, Las Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC, La Rosa Realty Success LLC, BF Prime LLC, and\nLa Rosa Realty Beaches LLC & La Rosa Realty Baxpi. All six franchises engage mostly in the residential real estate brokerage services\nto the public primarily through sales agents and also provide coaching and support services to agents on a fee basis. In addition, the\ncompany has acquired Nona Title Agency LLC (rebranded FPG Title).\n\n \n\nThe\nacquisitions were accounted for using the acquisition method of accounting, which requires that the assets acquired, and liabilities\nassumed be recognized at their estimated fair values as of the acquisition date.\n\n \n\nThe\nfollowing table summarizes the purchase consideration and the purchase price allocation to the estimated fair values of the identifiable\nassets acquired and liabilities assumed for the eight acquisitions for the year ended December 31, 2024:\n\n \n\n   Winter Garden   Georgia   California   Lakeland   Success   BF Prime   Nona Title   Beaches & Baxpi   Total \n\nAcquired ownership   100%   51%   51%   51%   51%   100%   100%   100%     \n\nAcquisition date   2/21/2024    3/7/2024    3/15/2024    4/18/2024    5/25/2024    8/19/2024    8/21/2024    12/31/2024      \n\nCommon stock issued   37    35    1    64    7    5    58    153    360 \n\n                                              \n\nCash consideration  $—   $—   $—   $50,000   $10,000   $5,890   $174,580   $100,000   $340,470 \n\nEquity consideration   352,204    516,453    123,113    823,903    68,778    44,111    484,212    1,036,177    3,448,951 \n\nTotal purchase price  $352,204   $516,453   $123,113   $873,903   $78,778   $50,001   $658,792   $1,136,177   $3,789,421 \n\nNoncontrolling interest   —    496,200    118,285    839,632    75,689    —    —    —    1,529,806 \n\nAcquisition date fair value  $352,204   $1,012,653   $241,398   $1,713,535   $154,467   $50,001   $658,792   $1,136,177   $5,319,227 \n\n                                              \n\nPurchase price allocation  $352,204   $1,012,653   $241,398   $1,713,535   $154,467   $50,001   $658,792   $1,136,177   $5,319,227 \n\nLess fair value of net assets acquired:                                             \n\nCash   17,623    79,553    1,436    32,935    171    4,542    129,157    11,461    276,878 \n\nWorking capital (less cash)   (17,148)   (54,991)   (45,027)   (59,325)   (21,323)   (3,817)   (128,306)   (24,562)   (354,499)\n\nIntangible assets   171,767    446,657    111,202    815,411    104,798    9,632    103,074    451,143    2,213,684 \n\nLong-term assets   —    91,118    106,542    129,521    22,697    14,545    —    —    364,423 \n\nLong-term liabilities   —    (98,641)   (69,449)   (94,591)   (8,236)   (7,500)   —    —    (278,417)\n\nNet assets acquired   172,242    463,696    104,704    823,951    98,107    17,402    103,925    438,042    2,222,069 \n\nGoodwill  $179,962   $548,957   $136,694   $889,584   $56,360   $32,599   $554,867   $698,135   $3,097,158 \n\n \n\nF-23\n\n \n\n \n\nThe\nclasses of intangible assets acquired and the estimated useful life of each class is presented in the table below for the eight acquisitions:\n\n \n\n  \nWinter\nGarden  \nGeorgia  \nCalifornia  \nLakeland  \nSuccess  \nBF\nPrime  \nNona\nTitle  \nBeaches\n& Baxpi  \nTotal \n\nFranchise\nagreement (10 to 11 years) \n$146,990  \n$356,200  \n$92,367  \n$511,453  \n$48,302  \n$7,771  \n$-  \n$343,318  \n$1,506,401 \n\nAgent\nrelationships (8 to 11 years) \n —  \n 43,447  \n 7,657  \n 147,455  \n —  \n —  \n 103,074  \n 91,869  \n 393,502 \n\nReal\nestate listings (1 year) \n 22,239  \n 37,310  \n 10,417  \n 129,847  \n 55,228  \n 1,526  \n —  \n 9,390  \n 265,957 \n\nNon-compete\nagreements (4 years) \n 2,538  \n 9,700  \n 761  \n 26,656  \n 1,268  \n 335  \n —  \n 6,566  \n 47,824 \n\nTotal\nidentifiable intangible assets acquired \n$171,767  \n$446,657  \n$111,202  \n$815,411  \n$104,798  \n$9,632  \n$103,074  \n$451,143  \n$2,213,684 \n\n \n\nGoodwill\ngenerated from the acquisition is primarily attributable to expected synergies from future growth and strategic advantages provided through\nexpansion and is not expected to be deductible for income tax purposes.\n\n \n\nThe\namounts of revenue, cost of revenue, gross profit, and loss from operations before income taxes of the eight from 2024 included in the\nCompany’s Consolidated Statement of Operations from the date of the acquisition for the years ended December 31, 2024 are as follows:\n\n \n\n** **** **\n**Year\nended\nDecember 31, 2024**** **\n\nRevenue\n    \n$9,872,020 \n\nCost of revenue   \n$8,944,685 \n\nGross\nprofit   \n$927,517 \n\nLoss\nbefore provision for income taxes   \n$150,410 \n\nWeighted average shares\nused in computing net loss per share of common stock \n$2,528 \n\n \n\nThe\nfollowing unaudited pro forma financial information presents the combined operating results of the Company, as if each acquisition had\noccurred as of January 1, 2024. The unaudited pro forma financial information includes the accounting effects of the business combinations,\nincluding adjustments to the amortization of intangible assets. The unaudited pro forma information does not necessarily reflect the\nactual results that would have been achieved, nor is it necessarily indicative of the Company’s future consolidated results.\n\n \n\nF-24\n\n \n\n \n\nThe\nunaudited pro forma financial information is presented in the table below for the year ended December 31, 2024:\n\n \n\n** **** **\n**Year\nended\nDecember 31,\n2024**** **\n\n  \n  \n\nRevenue \n$71,938,934 \n\nCost\nof revenue \n$65,484,111 \n\nGross\nprofit \n$6,454,823 \n\n  \n   \n\nLoss\nbefore provision for income taxes \n (14,499,740)\n\nLoss\nper share of common stock attributable to common stockholders, basic and diluted \n$(0.79)\n\nWeighted\naverage shares used in computing net loss per share of common stock attributable to common stockholders \n 19,976,390 \n\n \n\n**Note\n6 — Goodwill and Intangible Assets**\n\n \n\n**Impairment\ntest**\n\n** **\n\nDuring\nthe fiscal fourth quarters of both 2025 and 2024, we determined that triggering events occurred as a result of additional decline in\noperational estimates for franchises acquired, along with uncertainty for projected cash flows, and also further decreases in our stock\nprice. Therefore, we performed quantitative impairment tests as of the first day of fiscal fourth quarters of both 2025 and 2024 for\nour reporting units with remaining goodwill and intangibles.\n\n \n\nThe\nfair value of each reporting unit was estimated using a weighing of the income and market valuation approaches. The income approach applied\na fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including\nestimation of future cash flows, which is dependent on internally developed forecasts of revenue and profitability, estimation of the\nlong-term rate of growth for our business of 3% per year in revenues over a 10 year period, estimation of the useful life over which\ncash flows will occur, and determination of our carrying value of equity for the reporting unit being tested.\n\n \n\nFor\nthe year ended 2025, the combined fair values for all reporting units were then reconciled to the aggregate market value of our shares\nof common stock on the date of testing. Based on our most recent impairment test, a total impairment charge of $6,911,770 was recorded,\nwhich included $6,181,134 for goodwill and $730,636 for intangible assets.\n\n \n\nFor\nthe year ended 2024, a goodwill impairment charge of $787,438 was recorded. There was no impairment of intangibles recorded\nfor the year ended December 31, 2024.\n\n \n\nAdditionally,\nfollowing performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that\nan additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December\n31, 2025.\n\n \n\nThe\ngross carrying amount of goodwill as of December 31, 2025 and December 31, 2024 was $1,831,197 and $8,012,331, respectively.\n\n \n\nF-25\n\n \n\n \n\nChanges\nin the carrying amount of goodwill are as follows:\n\n \n\n  \n2025  \n2024 \n\nBalance\nJanuary 1 \n$8,012,331  \n$5,702,612 \n\nAdditions \n -  \n 3,097,157 \n\nImpairment \n (6,181,134) \n (787,438)\n\nGoodwill as of\nDecember 31 \n$1,831,197  \n$8,012,331 \n\n \n\nThe\ncomponents of purchased intangible assets were as follows:\n\n \n\n    Weighted                          \n\n    Average                          \n\n    Remaining     December 31, 2025  \n\n    Amortization     Gross                    \n\n    Period\n(in years)     Carrying Amount     Accumulated\nAmortization     Impairment     Net\nAmount  \n\nFranchise agreement   8       5,249,482       904,018       729,932       3,615,532  \n\nAgent relationships   7       916,282       200,812       -       715,470  \n\nReal estate listings   -       564,756       564,756       -       -  \n\nNon-compete agreements   2       188,748       94,004       704       94,040  \n\n**Total**   8     $ 6,919,268     $ 1,763,590     $ 730,636     $ 4,425,042  \n\n \n\n   Weighted             \n\n   Average             \n\n   Remaining   December 31, 2024 \n\n   Amortization   Gross         \n\n   Period\n(in years)   Carrying\nAmount   Accumulated\nAmortization   Net\nAmount \n\nFranchise agreement  9    5,249,482    467,138    4,782,344 \n\nAgent relationships  8    916,282    93,431    822,851 \n\nReal estate listings  0    564,756    472,543    92,213 \n\nNon-compete agreements  3    188,748    46,076    142,672 \n\n**Total**  9   $6,919,268   $1,079,188   $5,840,080 \n\n \n\nThe\nCompany recorded $685,723 and $1,006,052 of amortization of the intangible assets during the years ended December 31, 2025 and December\n31, 2024, respectively. The remaining estimated annual amortization expense is expected to be as follows:\n\n \n\n  \nAmortization \n\n2026 \n$580,300 \n\n2027 \n 576,935 \n\n2028 \n 534,930 \n\n2029 \n 532,708 \n\n2030 \n 532,708 \n\nThereafter \n 1,667,461 \n\nTotal \n$4,425,042 \n\n  \n\n  \nUseful\nLife\n\nFranchise\nagreement \n10 to 11 years\n\nAgent\nrelationships \n8 to 11 years\n\nReal\nestate listings \n1 year\n\nNon-compete\nagreements \n4 years\n\n \n\nF-26\n\n \n\n \n\n**Note\n7 — Leases**\n\n \n\nThe\nCompany has operating leases for office space in several states. Lease terms are negotiated on an individual basis. Generally, the leases\nhave initial terms ranging from one to five years. Renewal options are typically not recognized as part of the right of use assets and\nlease liabilities as it is not reasonably certain at the lease commencement date that the Company will exercise these options to extend\nthe leases.\n\n \n\nThe\nCompany elected certain practical expedients under ASC 842 which allows the Company to combine lease and non-lease components of lease\npayments in determining right-of-use assets and related lease liabilities. The Company also elected the short-term lease exception. Leases\nwith an initial term of twelve-months or less that do not include an option to purchase the underlying asset are not recorded on the\nconsolidated balance sheets and are expensed on a straight-line basis over the lease term.\n\n \n\nThe\nCompany leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December\n31, 2025 and 2024 was $181,929 and $139,200, respectively. On July 1, 2023, the Company began leasing office space for its subsidiary,\nLa Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, a former Company’s Board\nmember. There is a written lease, which includes minimum monthly rent of $5,300, with a term ending in June 2025. The parties have agreed\nto continue on a month-to-month basis. In addition, the Company rents various office spaces and has acquired leases as part of its acquisition\nstrategy.\n\n \n\nLease\ncosts for the years ended December 31, 2025 and 2024 were $935,587 and $905,825 respectively, and included in general and administrative\nexpenses in the consolidated statements of operations.\n\n \n\nSupplemental\ncash flow information related to leases is as follows:\n\n \n\n  \nDecember\n31, \n\n  \n2025  \n2024 \n\nCash\npaid for amounts included in the measurement of lease liabilities \n$691,862  \n$665,416 \n\nRight-of-use\nassets obtained in exchange for lease obligations \n$555,190  \n$883,652 \n\n \n\nDuring\nJanuary 2025, the Company entered into a new lease for office space in Orlando, FL. The Orlando lease requires monthly payments of $5,170.\nThe Orlando lease is initially for a five-year term, with no written option for renewal.\n\n \n\nDuring\nJuly 2025, the Company renewed its lease of the corporate office space in Celebration, FL, which is owned by an entity controlled by\nour CEO. The Celebration lease requires monthly payments of $12,000. The Celebration lease is initially for a one-year term, with option\nfor renewal.\n\n \n\nDuring\nAugust 2025, the Company entered into a new lease for office space in Puerto Rico. The Puerto Rico lease requires monthly payments of\n$1,250. The Puerto Rico lease is initially for a five-year term, with no written option for renewal.\n\n \n\nDuring\nthe year ended December 31, 2024, the Company acquired seven franchisees and affiliates, of which five had remaining lease terms beyond\ntwelve months, resulting in an increase of $417,228 in right-of-use assets and an increase in lease liabilities of $425,494.\n\n \n\nF-27\n\n \n\n \n\nSupplemental\nbalance sheet information related to leases is as follows:\n\n** **\n\n  \nDecember 31,  \nDecember 31, \n\n  \n2025  \n2024 \n\nAssets: \n   \n  \n\nRight-of-use\nassets \n$963,991  \n$997,715 \n\nLiabilities: \n    \n   \n\nLease liability, current \n 486,481  \n 473,733 \n\nLease liability, noncurrent \n 514,388  \n 545,759 \n\n  \n$1,000,869  \n$\n1,019,492\n \n\n \n\nThe\nCompany’s leases do not provide a readily determinable implicit discount rate. The Company estimates its incremental borrowing\nrate as the discount rate based on the information available at lease commencement. The weighted average discount rate is 11%. \n\n \n\nFuture\nmaturities on lease liabilities as of December 31, 2025 are as follows:\n\n \n\n  \nDecember 31, \n\n  \n2025 \n\n2026 \n$497,948 \n\n2027 \n 340,858 \n\n2028 \n 174,526 \n\n2029 \n 119,061 \n\n2030 \n 35,066 \n\nTotal minimum lease payments \n 1,167,460 \n\nLess: imputed interest \n (166,591)\n\nPresent value of lease obligations \n 1,000,869 \n\nLess: current portion \n (486,481)\n\nLong-term portion of lease\nobligations \n$514,388 \n\n  \n\nThere\nwere no leases with residual value guarantees.\n\n \n\n**Note\n8 — Borrowings**\n\n \n\n*Line\nof Credit*\n\n \n\nThe\nCompany has a line of credit with Regions Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with\na floor of 4.75% and no maturity date. On December 31, 2025, the outstanding balance on the line of credit was $0 at a prime rate of\n7.00% plus 4.50%, or 11.50%. On December 31, 2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75%\nplus 4.75%, or 12.50%. The line of credit is collateralized by Company assets. \n\n \n\n*Convertible\nNote Facility, Redemption Agreement, and Amendment to the Articles of Incorporation*\n\n \n\nOn\nNovember 12, 2025, the Company and the Investors entered into the Securities Purchase Agreement, pursuant to which the Company agreed\nto, among other things, issue and sell, and the Investors agreed to purchase, in multiple closings, a new series of senior secured convertible\nnotes of the Company in an aggregate original principal amount of up to $250,000,000, subject to the satisfaction or waiver of certain\nclosing conditions.\n\n \n\nPursuant\nto the Purchase Agreement, on November 12, 2025, the Company issued a Token Right (the “Token Right”) to certain Investors,\npursuant to which the holder will be entitled to receive upon exercise of the Token Right and for no further consideration an aggregate\nnumber of Right Tokens (as defined therein) equal to the sum of (i) fifty percent (50%) of any and all Tokens (as defined in the Token\nRight) purchased by the Company using the net proceeds of each Closing and (ii) twenty-five percent (25%) of any and all Tokens purchased\nby the Company using the net proceeds of any Other Financing (as defined therein). The Token Right can be exercised at any time beginning\non the date that is the sixty (60) day anniversary of the issuance date of the Token Right and ending on the ten (10) year anniversary\nof the issuance date of the Token Right.\n\n \n\nIn\nconnection with the Purchase Agreement, on November 12, 2025, the Company also entered into a Registration Rights Agreement (the “Registration\nRights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement on Form S-1 with SEC\nto register the resale of all of the Conversion Shares and shares of Common Stock otherwise issuable pursuant to the Notes. The Company\nsubsequently received a waiver of this condition.\n\n \n\nF-28\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, the Company will redeem and immediately cancel and return to the status\nof “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such\nthat, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting\npower of the Company for a redemption price of $2,000,000 payable on the Initial Closing Date, and $500,000 contingently payable upon\nthe satisfaction by the Company of its SEC filing requirements under the Securities Exchange Act of 1934, as amended (the “Exchange\nAct”) for four consecutive quarters and certain other four-quarter requirements set forth therein. Mr. La Rosa’s remaining\nshares of Series X Preferred Stock will be redeemed by the Company at a subsequent time determined by the Board or otherwise as set forth\nin the Redemption Agreement as described below, in each case for no additional consideration. These redemptions of the Series X Preferred\nStock are conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment (as defined below).\n\n \n\nThe\nparties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that\nsuch prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then\noutstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem\nall remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.\n\n \n\nIn\naddition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract\nor agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the\nterm of the Redemption Agreement, without the consent of the Lead Buyer.\n\n \n\nIn\naccordance with the terms of the Securities Purchase Agreement, the stockholders of the Company holding a majority of the voting power\napproved (1) the issuance of all Notes and Conversion Shares in excess of 19.99% of the Company’s issued and outstanding common\nstock at a price less than the minimum price on November 12, 2025 by written consent in lieu of having a stockholders’ meeting;\n(2) the Certificate of Amendment, and (3) the Reverse Stock Split. On November 24, 2025, the Company filed a preliminary information\nstatement on Schedule 14C with the SEC notifying stockholders of such written consent. On December 4, 2025, the Company filed a definitive\ninformation statement on Schedule 14C with the SEC and commenced mailing the same to the stockholders of record of the Company as of\nthe close of business on November 12, 2025. On December 25, 2025, such approval became effective.\n\n \n\nOn\nJanuary 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Securities Purchase Agreement,\npursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial\nNote”), together with a previously issued Token Right (as defined in the Securities Purchase Agreement), for an aggregate purchase\nprice of $9,900,000. The Initial Note is convertible into Conversion Shares, at an initial conversion price equal to $8.347, subject\nto adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $7.78,\nwhich will be lowered pursuant to the terms of the Initial Note for the Initial Note and all other Notes upon the effectiveness of the\nstockholders’ approval of such reduction (the “Floor Price”). The Initial Note bears interest at a rate of ten percent\n(10%) per annum that is payable monthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance\nand contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%)\nper annum) as described in the Initial Note.\n\n \n\nIn\nconnection with the Initial Closing on January 8, 2026, as contemplated under the Securities Purchase Agreement: (i) the Company and\neach of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit\nof the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security\nAgreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured\nParties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or\nsubstantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter\nacquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”);\n(ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary\nof the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary\nunder the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual\nProperty Security 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.\n\n \n\nAs\na condition to the Initial Closing as provided in the Securities Purchase Agreement: (i) on December 22, 2025, the Company filed the\nCertificate of Amendment, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the Collateral Agent\nalso entered into that certain Account Control Agreement.\n\n \n\nThe\nCompany received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to\nacquire Note Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of\nthe net proceeds to redeem a portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption\nAgreement (as defined in the Initial 8-K), (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption\nof remaining shares of the Series X Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any\nremaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.\n\n \n\nF-29\n\n \n\n \n\nCurvature\nSecurities LLC served as placement agent in connection with the offering described herein and will receive cash compensation not exceeding\n7% of the gross proceeds of the Initial Closing.\n\n \n\nOn\nthe Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting\nPreferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the\nCompany will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the *Redemption Agreement*) equal to $1,700,000\nimmediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later\ndate to be agreed by the Company and Mr. La Rosa. \n\n \n\nThe\nCompany entered into the Securities Purchase Agreement and transactions contemplated thereby to secure immediate and committed access\nto capital at a time when alternative financing sources were either unavailable or significantly more dilutive and restrictive. The facility\nwas intended to provide critical liquidity to support ongoing operations, address going concern considerations, and preserve enterprise\nvalue. In addition, the Company sought to strengthen its balance sheet and position itself to deploy capital into strategic initiatives,\nincluding investments in stablecoins, A.I. infrastructure, and data center opportunities, which management believes have the potential\nto enhance long-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*Senior\nSecured Convertible Note*\n\n \n\nOn\nFebruary 4, 2025, the Company and an Investor entered into the SPA, pursuant to which the Company issued to the Investor on such date:\n(i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial\nNote”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original\nprincipal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (the “Incremental\nNotes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for\nthe Initial Note and Incremental Warrants was $4,963,750.\n\n \n\nThe\nInitial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in\narrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. Interest is built\ninto the fair value of the Note.\n\n \n\nIn\nconnection with the closing of the Initial Note, the Company entered into a Registration Rights Agreement dated February 4, 2025, obligating\nthe Company to file and maintain the effectiveness of one or more registration statements with the SEC covering the resale of the shares\nof common stock issuable upon conversion of the Notes and related instruments. The Company was required to file an initial registration\nstatement with the SEC within 30 calendar days of the closing date and have it declared effective within 90 calendar days (or 120 days\nif subject to full SEC review). The Company successfully filed the registration statement on time per the agreed terms for the Initial\nNote. The Company is also subject to certain limitations on entering into conflicting registration rights agreements through the applicable\ndate and must allocate available registration capacity pro rata among holders.\n\n \n\nThe\nNotes may be prepaid by the Company, in whole or in part, at its option with at least 30 calendar days’ notice to the holder, provided\nno Event of Default has occurred and is continuing. Voluntary prepayments are subject to a redemption premium equal to 120% of the outstanding\nprincipal, accrued interest, and any applicable charges being redeemed. The Company may not issue more than one redemption notice within\nany 20-trading-day period, and such notices are irrevocable once issued.\n\n \n\nCertain\nmandatory redemptions, including those triggered by Events of Default, Bankruptcy Events, or Change of Control transactions, are contractually\ndeemed voluntary prepayments and are also subject to the 120% redemption premium. The redemption price in such scenarios is the greater\nof (i) 120% of the outstanding amount or (ii) a formula based on the conversion rate and the highest closing price of the Company’s\ncommon stock during a specified period.\n\n \n\nF-30\n\n \n\n \n\nOther\nredemptions, such as those triggered by subsequent placements or asset sales, are payable at 100% of the applicable amount and are not\nsubject to a premium.\n\n \n\nOn\nMay 23, 2025, the Company and the Investor holding the Initial Note and Incremental Warrants entered into a waiver agreement pursuant\nto which, effective as of May 20, 2025, through May 30, 2025, the holder waived all rights to default-related penalties, default interest,\nand acceleration of any amounts due under the Initial Note, as well as any other rights arising from an event of default under the SPA,\nthe Initial Note, the Incremental Warrants, and the related transaction documents, specifically with respect to the Company’s untimely\nfiling of its Quarterly Report on Form 10-Q. In addition, the Investor waived the requirement under the related Registration Rights Agreement\nto register for resale the shares of common stock issuable upon conversion of the Notes (other than the Initial Note) in the initial\nregistration statement filed by the Company with the SEC on February 14, 2025, and all related rights to receive any Registration Delay\nPayments (as defined in the Registration Agreement). The Company agreed to file subsequent registration statements within thirty (30)\ncalendar days following the issuance of any Incremental Notes pursuant to the exercise or call of an Incremental Warrant, registering\nfor resale by the Investor all shares issuable upon the conversion of such notes.\n\n \n\nOn\nJune 18, 2025, the Company and the Investor entered into an Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant\nto which (among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”)\n6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”).\nOn the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate\nof Designation”) with the Secretary of State of Nevada. The Initial Note remains outstanding post-Exchange. See *Note 10 –\nStockholder’s Equity* for further discussion.\n\n \n\nOn\nJune 26, 2025, the Company and the Investor entered into an Amendment No. 1 to the Initial Note to correct the maturity date to February\n4, 2027 and amend the Alternate Conversion Price to be the greater of (i) 95% of the lowest VWAP of the common stock of the Company during\nthe seven (7) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery\nof the applicable Conversion Notice (as defined in the Initial Note) and (ii) the Floor Price (as defined in the Initial Note).\n\n \n\nUpon\nthe modification on June 26, 2025, the Company evaluated the debt modification guidance, including the troubled debt restructuring guidance,\ndetermining that the modification of this instrument for which the Company made a fair value option election pursuant to Subtopic 825-10\nat inception, is not a troubled debt restructuring and rather, an extinguishment of the existing Initial Note. The Company recorded a\ngain on debt extinguishment of $4,113,000, which pursuant to ASC 470-50-40-2 for all extinguishments of debt, represents the difference\nbetween the reacquisition price (which includes any premium) and the net carrying amount of the debt being extinguished (which includes\nany deferred debt issuance costs) should be recognized as a gain or loss when the debt is extinguished. There were no deferred debt issuance\ncosts as the Initial Note was accounted for under the fair value option at issuance, and regarding the amendment, the Company incurred\napproximately $2,000 in costs, which were expensed in the period incurred.\n\n* *\n\nPursuant to this agreement the Company has the\nright to convert the principal and accrued interest into shares of common stock at the Conversion Price or Alternate Conversion Price\nwhich is the greater of (i) 95% of the lowest VWAP of the Common Stock during the seven consecutive trading days immediately preceding\nthe conversion. As of December 31, 2025 the Company converted $1,450,000 of principal and $112,000 of accrued interest at a conversion\npremium of 20% for $312,000 resulting in a total value of $1,874,000 converted into 8,215 shares of common stock. \n\n* *\n\n*Cash\nAdvance Agreements*\n\n \n\nOn\nFebruary 5, 2025, the Company paid off their Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance\nLLC (“Cedar”) in the amount of $354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid\noff their other Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”)\nin the amount of $340,421, resulting in a loss on extinguishment of debt of $68,615.\n\n \n\nDuring\nthe years ended December 31, 2025 and 2024, non-cash interest expense of $63,160 and $391,836, respectively, was recorded from the amortization\nof the debt discount and the debt issuance costs related to these Cash Advances. As of December 31, 2024, the remaining gross balance\nof the Cash Advances was $833,766, with a remaining unamortized discount of $215,085, for a net balance of $618,861.\n\n* *\n\nF-31\n\n \n\n \n\nOn\nJuly 3, 2023, the Company entered into a Cash Advance Agreement with Cedar for the purchase and sale of future receipts pursuant to which\nthe Company sold in the aggregate $764,150 in future receipts of the Company for $500,650. The Company recorded a debt discount in the\namount of $237,150 based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company\nand debt issuance costs of $26,350. The debt discount and debt issuance costs were reflected as a reduction on the outstanding liability\nand were being amortized as non-cash interest expense using the effective interest method over the term of the agreement. The Cash Advance\nwas fully repaid in January 2024.\n\n \n\nOn\nMay 20, 2024, the Company entered into another Standard Merchant Cash Advance Agreement (the “2024 Cash Advance”) with Cedar\nfor the purchase and sale of future receipts pursuant to which the Company sold in the aggregate $761,250 in future receipts of the Company\nfor $500,000. Future receipts include cash, check, credit or debit card, electronic transfer, or other form of monetary payment. Until\nthe purchase price has been repaid, the Company agreed to pay Cedar $23,000 per week. In addition, the Company granted Cedar a security\ninterest in all the Company’s accounts, including deposit accounts and accounts receivable and proceeds. The Company recorded a\ndebt discount in the amount of $236,250 based upon the difference between the amount of future receipts sold and the actual proceeds\nreceived by the Company and debt issuance costs of $25,000. The debt discount and debt issuance costs were reflected as a reduction on\nthe outstanding liability and were being amortized as non-cash interest expense using the effective interest method over the term of\nthe agreement.\n\n \n\nOn\nOctober 7, 2024, the Company entered into a Standard Merchant Cash Advance Agreement (the “Cedar Cash Advance Agreement”)\nwith Cedar pursuant to which the Company sold to Cedar $616,250 of its future receivables, including cash, check, credit or debit card,\nelectronic transfer, or other form of monetary payments from third parties (the “Receivables Purchased Amount”), for a purchase\nprice of $425,000 less underwriting fees and expenses paid, or for net funds of $403,750 to the Company. The parties agreed that a portion\nof the proceeds equal to $301,250 were to be paid by the Company to Cedar pursuant to the May 20, 2024 cash advance agreement discussed\nabove. This payment was accounted for as an extinguishment of this May 20, 2024 cash advance agreement debt and the Company recorded\na loss of $54,829 representing the remaining unamortized deferred financing costs and discount. Pursuant to the Cedar Cash Advance Agreement,\nCedar was expected to withdraw $15,400 a week directly from the Company’s bank account until the Receivables Purchased Amount due\nto Cedar under the Cedar Cash Advance Agreement is paid in full. In the event of a default (as defined in the Cedar Cash Advance Agreement),\nCedar, among other remedies, could demand payment in full of all amounts remaining due under the Cedar Cash Advance Agreement. To guarantee\nthe Company’s satisfaction of its obligations under the Cedar Cash Advance Agreement, the Company granted Cedar a security interest\nin all its accounts, including deposit accounts and accounts receivable and proceeds.\n\n \n\nOn\nOctober 7, 2024, the Company, entered into a Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”)\nwith Arin Funding LLC (“Arin”) pursuant to which the Company sold to Arin $588,000 of its future receivables for the sale\nof its goods and services (the “Receivables Purchased Amount”), for a purchase price of $420,000 less fees and expenses paid,\nor for net funds of $400,000 to the Company. Pursuant to the Arin Cash Advance Agreement, Arin was expected to withdraw $15,474 a week\ndirectly from the Company’s bank account until the Receivables Purchased Amount due to Arin under the Arin Cash Advance Agreement\nwas paid in full. In the event of a default (as defined in the Arin Cash Advance Agreement), Arin, among other remedies, could demand\npayment in full of all amounts remaining due under the Arin Cash Advance Agreement. To guarantee the Company’s satisfaction of\nits obligations under the Arin Cash Advance Agreement, the Company granted Arin a security interest in all its accounts, including, but\nnot limited to, deposit accounts, accounts receivables, other receivables, chattel paper, documents, equipment, general intangibles,\ninstruments and inventory.\n\n \n\n*Notes\nPayable-Senior Secured Promissory Notes*\n\n  \n\nIn\nconnection with the execution of the SPA mentioned above, during the first quarter of 2025, the Company repaid the remaining principal\nand accrued interest of all three outstanding senior secured promissory notes issued in 2024 to an accredited investor thereby fully\nextinguishing the Company’s debt obligations under the 2024 note issuances discussed below.\n\n \n\nIn\naddition, the accredited investor elected to convert an aggregate principal and interest amount of $483,751 of the notes into 173 shares\nof the Company’s common stock in accordance with the terms of the applicable note agreements. The Company also settled all vested\nand outstanding warrants previously held by the investor. Two of the three warrants were exercised for a total of 110 shares of common\nstock. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of\nall vested warrants held by the investor.\n\n \n\nF-32\n\n \n\n \n\nPrior\nto extinguishment, on January 8, 2025, the Company and the accredited investor entered into that certain Waiver, waiving the Event of\nDefault (as defined) under these senior secured promissory notes. The waiver included, among other provisions, waiving the rights to\nall default penalties, default interest, the acceleration of any amounts and waiving the restriction for the Company to enter into a\nvariable rate transaction, of which the consummation could be considered an event of default, provided the proceeds from such financing\nare used to repay, in full, the notes described below.\n\n \n\nAlso\nprior to extinguishment, on January 22, 2025, the Company and the Holder signed an amendment No. 1 to the Waiver. Pursuant to the Amendment,\nthe Company shall pay 100% of any cash proceeds raised by the Company from the sale of securities pursuant to its Registration Statement\non Form S-3 to the Holder first towards the repayment of the Redemption Price until it is paid in full, and after that towards the repayment\nof the Notes. The Amendment also provides that, if the Redemption Agreement becomes null and void pursuant to the terms of the Redemption\nAgreement, then all Proceeds previously paid by the Company to the Holder pursuant to the Redemption Agreement shall instead be applied\ntowards the repayment of the Notes.\n\n \n\nThe\ninterest expense incurred for these senior secured promissory notes prior to being retired was $23,798 for the year ended December 31,\n2025. The interest expense incurred for the senior secured promissory notes was $264,490 for the year ended December 31, 2024.\n\n \n\nOn\nFebruary 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior\nsecured promissory note with an aggregate principal amount of $1,052,632 with a maturity date twelve months from the issue date. The\nnote had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 8 shares of the Company’s\ncommon stock as a commitment fee, a warrant to purchase 15 shares of the Company’s common stock with an exercise price of $24,000,\nexercisable until the five-year anniversary of the closing date, and a second warrant to purchase 12 shares of the Company’s common\nstock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before\nthe maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant\nwould be cancelled and extinguished if the note was fully paid on or before the note maturity date. The investor also had a security\ninterest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of\nall of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares\nof the Company’s common stock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment\nwhen due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest volume weighted average price (VWAP)\nof the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital\npurposes. In connection with this financing, the Company also issued to its placement agent, Alexander Capital L.P. (“Alexander\nCapital”), a 5-year warrant to purchase 3 shares of the Company’s common stock at an exercise price of $12,000 per share.\nDuring the year ended December 31, 2024, the investor converted $69,534 of accrued interest and $746,440 of principal to 110 shares of\ncommon stock.\n\n \n\nOn\nApril 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured\npromissory note with an aggregate principal amount of $1,316,000 with a maturity date twelve months from the issue date. The note had\nan original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 6 shares of the Company’s\ncommon stock as a commitment fee, a warrant to purchase 19 shares of the Company’s common stock with an exercise price of $24,000,\nexercisable until the five-year anniversary of the closing date, and a second warrant to purchase 19 shares of the Company’s common\nstock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before\nthe maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant\nwould be cancelled and extinguished if the note is fully paid on or before the note maturity date. The investor also had a security interest\nin certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the\nCompany’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s\ncommon stock at a conversion price of $20,000 per share unless the Company fails to make an amortization payment when due, in which case\nthe conversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The\nproceeds of the note were used for business development and general working capital purposes. During the year ended December 31, 2024,\nthe investor converted $71,713 of accrued interest to 7 shares of common stock.\n\n \n\nF-33\n\n \n\n \n\nOn\nJuly 16, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured\npromissory note with an aggregate principal amount of $444,600 with a maturity date twelve months from the issue date. The note had an\noriginal issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 4 shares of the Company’s common\nstock as a commitment fee, a warrant to purchase 7 shares of the Company’s common stock with an exercise price of $24,000, exercisable\nuntil the five-year anniversary of the closing date, and a second warrant to purchase 7 shares of the Company’s common stock with\nan exercise price of $18,000. The second warrant only became exercisable if the note was not fully paid on or before the maturity date,\nat which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled\nand extinguished if the note was fully paid on or before the note maturity date. The investor also had a security interest in certain\nproperty of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s\nobligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common\nstock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment when due, in which case the\nconversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The proceeds\nof the note were used for business development and general working capital purposes.\n\n \n\nThe\nCompany evaluated the terms of the securities purchase agreements and determined that the commitment shares and the first warrants were\nfreestanding instruments. The Company determined the commitment shares were to be classified as equity, which are initially recorded\nat fair value with no subsequent remeasurement. The Company determined that the first warrants were classified as a derivative liability,\nwhich were initially recorded at fair value with changes in fair value recorded in earnings. The second warrants and certain terms within\nthe debt notes were contingent upon certain possible events that were within the Company’s control. The Company determined that\nthe contingencies were not probable and, as such, were not recorded as contingent liabilities.\n\n \n\nThe\nCompany incurred issuance costs that were directly attributable to issuing the debt instruments in the amount of $346,248, which included\nplacement fees of $202,518 paid to Alexander Capital. Of the debt issuance costs, $326,879 was paid in cash and the remainder was the\nvalue of a warrant issued to Alexander Capital. The Company determined that the warrant issued to Alexander Capital was classified as\nequity. The issuance costs were not specifically related to any instrument within the transactions and, as such, were allocated in the\nsame proportion as the proceeds were allocated to each of the debt transactions, the committed shares, and the warrants.\n\n \n\nOn\nSeptember 25, 2024, the Company entered into an agreement to amend the three Senior Secured Promissory Notes entered into in February,\nApril, and July of 2024. The amendment extended the maturity date for all three notes to August 1, 2025, and delayed payments until February\n1, 2025. In lieu of all payments required under the original notes, $250,000 per month was to be paid beginning February 1 and each month\nafter, until all three notes were paid in full. In addition, $200,000 was paid on September 30, 2024 and applied to the February note.\nThis amendment was accounted for as an extinguishment of debt, and the Company recorded a loss of $722,558. The Company had accrued interest\non the notes totaling $264,490 as of December 31, 2024.\n\n \n\n*Notes\nPayable-Promissory Note*\n\n \n\nOn\nSeptember 27, 2024, the Company entered into a promissory note payable whereby the Company borrowed $200,000 bearing interest at 12.5%\nper annum. The note was payable in three-monthly installments of $75,000. The proceeds of the note were used to pay down the senior secured\npromissory note entered into in February 2024. The remaining balance on the note as of December 31, 2024 was $148,725. This note was\nfully repaid in February 2025. The interest expense incurred for the promissory note was $1,276 for the year ended December 31, 2025.\n\n \n\n*Notes\nPayable-Economic Injury Disaster Loans*\n\n \n\nOn\nJune 1, 2020, the Company received net proceeds from Economic Injury Disaster Loans (the “EIDL Loans”) from the Small Business\nAdministration (“SBA”) in the aggregate amount of $365,300. After processing fees, the net proceeds were $365,100 under the\nterms. The EIDL Loans, which are in the form of promissory notes, mature in May 2050 and bear interest at a rate of 3.75% per annum.\nPayments are to be made monthly, and each payment is applied first to the interest accrued to the date of receipt of each payment and\nany remaining payment is applied to principal. The loan terms provide for a collateral interest for the SBA and limits the use of proceeds\nto working capital to alleviate the effects of COVID-19 on the Company’s economic condition.\n\n \n\nDuring\nthe fourth quarter of 2023, the Company acquired two franchisees that had outstanding Economic Injury Disaster Loans (the “EIDL\nLoans”) in the aggregate of $263,000. During the first quarter of 2024, the Company acquired a franchise that had an outstanding\nEIDL Loan in the aggregate of $34,100. The Company acquired the EIDL Loans, and the EIDL loans have terms similar to the Company’s\nexisting EIDL loans. The EIDL Loans mature in 2050 and bear interest at a rate of 3.75% per annum.\n\n \n\nF-34\n\n \n\n \n\nFuture\nmaturities of Economic Injury Disaster Loans as of December 31, 2025, were as follows:\n\n \n\n  \nDecember 31, \n\nEconomic\nInjury Disaster Loans-Future Maturities \n2025 \n\n2026 \n$5,900 \n\n2027 \n 5,900 \n\n2028 \n 5,900 \n\n2029 \n 5,900 \n\n2030 \n 5,900 \n\n2031 \n 5,900 \n\nThereafter \n 605,827 \n\n**Total** \n$641,227 \n\n \n\n*Acquisition Settlement Agreement*\n\n \n\nOne October 18, 2024, the Company entered into\na mediated settlement agreement to purchase the remaining 49% of the non-controlling interest of the subsidiary Nona Legacy Powered By\nLa Rosa Realty, Inc. for a total of $1,000,000 paid in equal monthly installments of $11,905 over a period of seven years with the first\npayment due on November 1, 2024. The settlement agreement releases the Company of any further claims and bears no interest.\n\n \n\nNotes payable as of December 31, 2025 and December\n31, 2024 were as follows:\n\n \n\n  \nDecember 31,  \nDecember 31, \n\nNotes\nPayable \n2025  \n2024 \n\nSenior\nsecured promissory note (SSPN) #1 \n \n \n  \n$106,192 \n\nSenior\nsecured promissory note #2 \n \n \n  \n 1,316,000 \n\nSenior\nsecured promissory note #3 \n \n \n  \n 468,000 \n\nPromissory\nnote payable \n    \n 148,724 \n\nSenior\nsecured convertible note \n 5,818,000  \n - \n\nEconomic\ninjury disaster loans (EIDL) \n 641,227  \n 647,630 \n\nAcquisition\nSettlement Agreement \n 833,333  \n 976,190 \n\nTotal\nnotes payable   \n$7,292,560  \n$3,662,736 \n\n  \n    \n   \n\nCurrent\nportion:   \n    \n   \n\nLess:\ncurrent portion-SSPNs \n \n \n  \n (1,890,192)\n\nLess:\ncurrent portion-Promissory note payable \n \n \n  \n (148,724)\n\nLess:\ncurrent portion-EIDL \n (5,900) \n (5,900)\n\nAcquisition\nSettlement Agreement \n (142,857) \n (142,857)\n\nNotes\npayable, net of current \n$\n7,143,803\n  \n$1,475,064 \n\n \n\n**Note\n9 — Warrants**\n\n \n\nWarrants\nare issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s\nCommon Stock at a fixed price. The strike price of warrants granted in 2022 were set when the Company completed the IPO pricing agreement\nwith the Company’s underwriters on October 9, 2023, which was $5.00.\n\n \n\n**July\n2025 Warrant Exchange Agreements**\n\n \n\nDuring\nJuly 2025, the Company entered into two warrant exchange agreements (the “Exchange Agreements”) with two holders of previously\nissued equity classified warrants to purchase shares of the Company’s Common Stock (one Exchange Agreement was entered into with\nthe Company’s Chief Executive Officer. The terms of the Exchange Agreement provided each holder with 750 newly issued shares of\nthe Company’s Common Stock, in exchange for the settlement and cancellation of their outstanding warrants. As of the dates of the\nExchange Agreements, the outstanding warrants provided the holders with the right to purchase an aggregate of 3,703,704 shares of the\nCompany’s Common Stock at a per share exercise price of $0.135.\n\n \n\nF-35\n\n \n\n  \n\nUpon\nthe respective settlement dates in July 2025, the Company measured the fair value of the newly issued shares of the Company’s Common\nStock issued as consideration to be approximately $1.1 million. Just prior to their settlement and cancellation, the Company estimated\nthe fair value of the Warrants to be approximately $28.0 million. The fair value of the Warrants prior to cancellation was estimated\nusing the Black-Scholes valuation model with the following inputs: Company stock prices of $7.40 to $7.99; exercise prices of $0.135,\nremaining term to maturity of 2.3 to 2.4 years, risk-free rates of 3.9% and stock\n\nprice\nvolatility of 65.0%.\n\n \n\nAs\nthe difference between the fair value of the Warrants settled ($28.0 million) and the fair value of the shares of Common Stock issued\n($1.1 million) was favorable to the Company, no recognition of this change is required in the Company’s consolidated financial\nstatements.\n\n \n\nWarrants\nare issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s\ncommon stock at a fixed price. As of December 31, 2025, the Company’s stock price was $6.34.\n\n \n\n*2022\nWarrant Exchange Agreements *\n\n* *\n\nWarrants\nissued to two investors who loaned money to the Company, Emmis Capital II, LLC and the Company’s CEO, Joseph La Rosa, on November\n14, 2022 and December 2, 2022, respectively, included full ratchet antidilutive protections. The original warrants each covered 50,000\nshares at a strike price of $5.00. By the end of 2024, due to various debt and equity transactions the new strike price on these warrants\nbecame $0.37, resulting in the number of shares covered by each warrant to increase to 667,913 and a 2024 deemed dividend of $1,476,044.\n\n \n\nIn\nthe first half of 2025, the warrants were revalued due to equity transactions triggering the ratchet antidilutive protections bringing\nthe strike price of these warrants down to $0.14 resulting in the number of shares covered by each warrant to increase to 1,851,852,\nand a 2025 deemed dividend of $275,264. In addition, on August 7, 2024, the Company, entered into a securities purchase agreement with\nan institutional accredited investor, Brown Stone Capital Ltd., pursuant to which the Company agreed to issue up to 3,051,336 shares\nof the Company’s common stock, and/or pre-funded warrants to purchase shares of common stock, at $0.59 per share. The discount\nrelated to the shares purchased by Brown Stone resulted in a deemed dividend of $434,163. Pursuant to this agreement, on August 12, 2024,\nthe Company issued 95 shares of common stock. In accordance with the full ratchet antidilutive terms tied to Emmis Capital II, LLC and\nJoseph La Rosa’s warrants, the warrants were adjusted to reflect the strike price of the common stock issued to Brown Stone Capital\nLtd., and the number of shares covered by each of the warrants increased to 847,458, in the aggregate. The difference in the fair value\nbetween each warrant immediately before and after the trigger was, in aggregate, $485,876, which is considered a deemed dividend. These\ntwo transactions increased the basic net loss per share for common stockholders for the year ended December 31, 2024.\n\n \n\nAt\nDecember 31, 2025, warrants outstanding that have vested and are expected to vest are as follows:\n\n \n\n           Weighted     \n\n           Average     \n\n       Weighted   Remaining     \n\n   Number   Average   Contractual   Aggregate \n\n   of   Exercise   Life   Intrinsic \n\n   Shares   Price   (in years)   Value \n\nVested   14   $77,965    2.0   $- \n\nExpected to vest   —    —    —    — \n\nTotal   14   $77,965    2.0   $- \n\n   \n\nAdditional\ninformation with respect to warrant activity:\n\n  \n\n  \n   \nWeighted \n\n  \nNumber  \nAverage \n\n  \nof  \nExercise \n\n  \nShares  \nPrice \n\nBalance — December 31, 2024 \n 3,930,282  \n$0.66 \n\nGranted/ Increase to\nexisting warrants \n 2,367,878  \n 0.14 \n\nExercised \n (1,392,198) \n 0.37 \n\nExpired\nor forfeited \n (4,905,948) \n 0.14 \n\nBalance — December 31, 2025 \n 14  \n$77,965.08 \n\n \n\nF-36\n\n \n\n \n\nDuring\n2023 the Company issued warrants to purchase 6 shares of Common Stock to the Company’s underwriter as compensation for providing\nservices to complete the Company’s IPO. The warrants vested on April 2, 2024 and have a term of five years from the grant date\nwith an exercise price of $44,000. The warrants are freestanding instruments in a bundled transaction with the IPO and are accounted\nfor separately. The Company determined that the warrants are classified as equity.\n\n \n\n*Warrants\nrelated to 2024 Senior Secured Notes Payable*\n\n \n\nOn\nFebruary 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior\nsecured promissory note. As part of the transaction, the Company issued two warrants, the first gave the investor the option to purchase\n15 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing\ndate.\n\n \n\nOn\nApril 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured\npromissory note. As part of the transaction, the Company issued two warrants, the first gives the investor the option to purchase 19\nshares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing\ndate.\n\n \n\nOn\nJuly 15, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured\npromissory note. As part of the transaction, the Company issued two warrants, the first gives the investor the option to purchase 7 shares\nof the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.\n\n \n\nDuring\nthe first half of 2025, the Company settled all vested and outstanding warrants previously held by the accredited investor holding the\nthree senior secured notes payable from 2024 mentioned above. Two of the three warrants were exercised on a cashless basis for a total\nof 2 shares of common stock which represented 1,392,198 warrants. The remaining warrant was repurchased by the Company for $379,083 in\ncash on January 24, 2025, resulting in the elimination of all vested warrants (1,202,244 warrants) held by the investor as of March 31,\n2025.\n\n \n\nUnder\nan agreement between the Company and the Company’s underwriter, Alexander Capital, the Company issued a warrant to Alexander Capital\nas a result of the issuance of the promissory note on February 20, 2024. The holder of the warrant had the right to purchase 3 shares\nof the Company’s common stock with an exercise price of $12,000, exercisable until the five-year anniversary of the grant date.\n\n \n\nDuring\nthe fiscal years ended December 31, 2025 and 2024, there was no unrecognized expense related to warrants. There was no unrecognized amortization\nof financing fees related to warrants in 2025 or 2024.\n\n \n\nThe\nvaluation methodology used to determine the fair value of the warrants was the Black-Scholes option-pricing model. The Black-Scholes\nmodel requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the\nweighted average expected life of the warrant.\n\n \n\nEstimated\nvolatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected\nlife of the award. The Company’s estimated volatility is an average of the historical volatility of peer entities over the shorter\nof i) the period equal to the expected life of the award or ii) the period over which the peer company was publicly traded. The Company\nuses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.\n\n \n\nThe\nrisk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is\nappropriate for the term of the award at the grant date.\n\n \n\nThe\nweighted average fair value of warrants granted and the assumptions used in the Black-Scholes model are set forth in the table below.\n\n \n\n  \nDecember\n31,  \nDecember\n31, \n\n  \n2025  \n2024 \n\nWeighted\naverage fair value \n$0.06  \n$0.87 \n\nDividend\nyield   \n —  \n — \n\nExpected\nvolatility factor \n 66.3% \n 72.7%\n\nRisk-free\ninterest rate \n 3.7% \n 4.3%\n\nExpected\nlife (in years) \n 2.4  \n 5.5 \n\n \n\nF-37\n\n \n\n \n\n**Note\n10 — Stockholders’ Equity**\n\n \n\nThe\nCompany is authorized to issue two classes of stock consisting of 2,000,000,000 shares of Common Stock, $0.0001 par value per share,\nand 50,000,000 shares of preferred stock, $0.0001 par value per share. On July 22, 2021, the Company issued 750 shares of Common Stock\nand 2,000 shares of Series X Super Voting Preferred Stock to Mr. La Rosa as compensation for services and the founding of the Company. \n\n \n\n*Equity\nPurchase Facility Agreement*\n\n* *\n\nOn\nAugust 4, 2025, the Company and an institutional investor (the “Investor”) entered into an Equity Purchase Facility Agreement\n(the “EPFA”), pursuant to which the Company has the right to issue and sell to the Investor up to $150 million (subsequently\namended to $1 billion on September 18, 2025) in newly issued shares of the Company’s common stock (the “Commitment Amount”).\nThe term of the facility provided under the EPFA expires on the earlier to occur of (i) the first day of the next month following the\n36-month anniversary of the first trading date after the Agreement Date and (ii) the date on which the Investor shall have made payment\nof advances pursuant to the EPFA for common shares equal to the Commitment Amount; provided that the Company may terminate the EPFA effective\nupon five trading days’ prior written notice to the Investor (provided that there are no outstanding advance notices the common\nshares under which have yet to be issued).\n\n \n\nOn\nSeptember 18, 2025, the Company and the Investor entered into the Amended and Restated Equity Purchase Facility Agreement in order to\nincrease the Commitment Amount to $1 billion as described above. All other terms and provisions were substantially the same as the initial\nEPFA.\n\n \n\nUnder\nthe terms of the EPFA, the Company has the right (but not the obligation) to request that the Investor purchase shares of the Company’s\nCommon Stock, subject to certain conditions and limitations (an “Advance”). The purchase price of the shares to be sold under\nan Advance is 100% of the Market Price, which is generally defined as the lower of (i) the lowest price of the Common Stock traded during\nthe relevant pricing period and (ii) the lowest daily (or hourly) VWAP during the relevant pricing period. In the event the bid price\nof the common stock is at or below $0.10 per share, the Investor will have the right to consent to any Advance. Any purchase under an\nAdvance would be subject to certain limitations, including that the Investor shall not purchase any shares of Common Stock that would\nresult in the Investor beneficially owning more than 4.99% of the outstanding common shares or voting power of the Company (the Investor\ncan request to increase this limit to 9.99%). Additionally, any purchase under an Advance would also be subject to a 19.99% limit based\non the outstanding shares of common stock at the issuance date, prior to the receipt of shareholder approval.\n\n \n\nThe\nEPFA was determined to represent a combination of a purchased put option on the Company’s common stock (prior to an Advance, the\n“EPFA Option”) as well a forward contract to deliver the Company’s common stock (after an Advance, but prior to delivery\nof the shares). The EPFA Option was determined to be a freestanding financial instrument which did not meet the criteria to be accounted\nfor as a derivative instrument or to be recognized within equity. Pursuant to ASC 815 *Derivatives and Hedging*(“ASC 815”),\nthe Company will therefore recognize the EPFA Option as an asset or liability, measured at fair value at the date of issuance and at\neach reporting period, with changes in fair value recognized in earnings. The EPFA Option was determined to have a fair value of $0 on\nthe date of issuance as well as December 31, 2025. In addition, as the EPFA Option did not meet the requirements for equity classification,\nthe Company expensed the issuance costs incurred in association with the EPFA in the periods in which they were incurred.\n\n \n\n*Second\nAmended 2022 Plan*\n\n* *\n\nOn\nJuly 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders approved the Second Amended 2022 Plan. Pursuant\nto the Second Amended 2022 Plan (i) the total number of shares of common stock subject to the plan was revised from 1,563 shares (as\nadjusted the effects of stock splits effected by the Company) to 3,750 shares to ensure sufficient shares are available for future grants,\nand (ii) the term “Consultant” was clarified to include not only a person, including an advisor, engaged by the Company,\nits subsidiary or affiliate to render services to the Company or its subsidiary, but also a legal entity wholly-owned by such person.\nThe Second Amended 2022 Plan replaced the Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan adopted on November 19, 2024\nby the stockholders of the Company, in its entirety. On July 11, 2025, the Company filed a preliminary information statement on Schedule\n14C with the SEC notifying stockholders of such written consent. On July 21, 2025, the Company filed a definitive preliminary statement\non Schedule 14C with the SEC and commenced mailing the definitive information statement to stockholders of record as of the close of\nbusiness on July 9, 2025. Such stockholders’ approval and the Second Amended 2022 Plan became effective on August 11, 2025. \n\n \n\n*Reverse\nStock Split*\n\n* *\n\nOn\nJuly 2, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation, as\namended (the “Articles of Incorporation”), with the Secretary of State of Nevada to effect an 1-for-80 reverse stock split\nof the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on July 7, 2025, (the “Reverse\nStock Split”).\n\n \n\nF-38\n\n \n\n  \n\nAs\na result of the Reverse Stock Split, every eighty shares of issued and outstanding common stock were automatically combined into one\nissued and outstanding share of common stock. No fractional shares were issued as a result of the Reverse Stock Split, fractional entitlements\nwere rounded up to the next whole number. The Reverse Stock Split reduced the number of shares of common stock outstanding from 58,323,795\nshares to 7,290 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged at 2,000,000,000\nshares and the par value of the common stock remained $0.0001 per share. The split also brought the Company back into a “Controlled\nCompany” Status with the CEO owning more than 50% of the voting power.\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 a reverse stock split of\nthe Company’s Common Stock at a ratio in the range of 1-for-5 to 1-for-100, with such ratio to be determined by the Board (“Stockholders\nApproval”). Such resolution became effective on December 25, 2025, or twenty (20) days after the Company filed with the SEC and\nmailed to its stockholders respective Information Statement on Schedule 14C on or approximately December 4, 2025. Following such stockholders’\napproval, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of\n12:01 a.m. (New York time) on January 26, 2026 (“January 2026 Reverse Stock Split”). As a result of the January 2026 Reverse\nStock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding\nshare of Common Stock.\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.\n\n \n\nAs\na result, all share information in the accompanying financial statements has been adjusted as if the reverse stock splits happened on\nthe earliest date presented. The par value of the Common Stock was not impacted by the split.\n\n \n\n*Series\nB Preferred Stock*\n\n* *\n\nOn\nJune 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the Investor entered into, and closed\nthe transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which\n(among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”)\n6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”).\nOn the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate\nof Designation”) with the Secretary of State of Nevada.\n\n \n\nPursuant\nto the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company in excess\nof 19.99% of the Company’s outstanding shares of common stock is conditional upon obtaining the approval of the Company’s\nshareholders in accordance with the rules and regulations of the Nasdaq Capital Market (“Shareholder Approval”). The Company\nagreed to convene a meeting of stockholders to obtain Shareholder Approval within 120 days after the date of the Exchange Agreement.\nThe Company obtained the Shareholder Approval effective as of August 11, 2025.\n\n \n\nIn\nconnection with the issuance of the Series B Preferred Stock, the Company incurred direct and incremental expenses of $43,000 comprised\nof legal fees, which reduced the carrying value of the Preferred Stock.\n\n \n\nDecember 31, 2025 \n\nShares\nAuthorized   Shares\nIssued and\nOutstanding   Carrying\nValue   Original\nIssue Price   Conversion\nPrice   Common\nShares\nUpon\nConversion \n\n 6,000    6,000   $8,261,000   $0.0001   $960.00    7,944 \n\n \n\nF-39\n\n \n\n \n\n*Additional\nCommon Stock Issuances*\n\n \n\nOn\nJanuary 17, 2025, the Company issued 50 shares of common stock as an exercise of a prefunded warrant which was part of the securities\npurchase agreement with an institutional accredited investor, Abri Advisors, Ltd., a corporation organized under the laws of Bermuda,\nagreed to on November 1, 2024.\n\n \n\nOn\nFebruary 5, 2025, the Company issued the CEO an aggregate of 367 unregistered shares of common stock of the Company, par value $0.0001\nper share (the “Shares”) as a compensation for the services rendered pursuant to his employment agreement with the Company.\nThe Company issued the Shares to the CEO in reliance on exemption from the registration requirements of the Securities Act of 1933, as\namended (the “Securities Act”), available to the Company under Section 4(a)(2) of the Securities Act due to the fact that\nthe issuance did not involve a public offering of securities. The stock compensation expense for the year ended December 31, 2025 was\n$1,160,381.\n\n \n\nOn\nFebruary 20, 2025, the Company issued shares pursuant a consulting agreement entered into on January 1, 2025 in which the Company agreed\nto issue 216 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December\n31, 2025 related to this transaction amounted to $411,062.\n\n \n\nOn\nFebruary 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 38 and 26 shares\nof the Company’s common stock, respectively, for services rendered. The stock compensation expense for the year ended December\n31, 2025, related to this transaction amounted to $122,570.\n\n \n\nOn\nMarch 10, 2025, the Company issued 5 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation\nexpense for the year ended December 31, 2025, related to this transaction amounted to $8,036.\n\n \n\nOn\nMarch 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 31 shares of the Company’s\ncommon stock for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction\namounted $46,925.\n\n \n\nOn\nApril 21, 2025, the Company issued the CEO an aggregate of 413 unregistered shares of common stock of the Company, par value $0.0001\nper share as compensation for the services rendered pursuant to his employment agreement with the Company. The stock compensation expense\nfor the year ended December 31, 2025 related to this transaction amounted to $444,319.\n\n \n\nOn\nJuly 7, 2025, the Company issued 3 shares of common stock pursuant to a consulting agreement for services rendered. The stock compensation\nexpense for the year ended December 31, 2025, related to this transaction amounted to $3,756.\n\n \n\nOn\nJuly 8, 2025, the Company issued the remaining amount of common stock of 3 shares, pursuant to the consulting agreement entered into\non February 20, 2025. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $2,118.\n\n \n\nOn\nJuly 14, 2025, the Company entered into an exchange agreement with certain holder (the “Holder”) of a common stock purchase\nwarrant to purchase 18,519 shares of common stock, at $13.50 per share, issued by the Company to the Holder on November 14, 2022. Pursuant\nto such exchange agreement, the Holder’s warrant was cancelled and in exchange, the Company issued an aggregate of 750 shares of\ncommon stock to the Holder. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted\nto $559,125.\n\n \n\nOn\nJuly 14, 2025, the Company entered into a consulting agreement pursuant to which the Company agreed to issue 500 shares of the Company’s\ncommon stock for services rendered. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted\nto $372,750.\n\n \n\nOn\nJuly 17, 2025, the Company entered into an exchange agreement with Joseph La Rosa, its Chief Executive Officer and holder of a common\nstock purchase warrant to purchase 18,519 shares of common stock, at $13.50 per share, issued by the Company to Mr. La Rosa on December\n2, 2022. Pursuant to such exchange agreement, Mr. La Rosa’s warrant was cancelled and in exchange, the Company issued Mr. La Rosa\nan aggregate of 750 shares of common stock. The stock compensation expense for the year ended December 31, 2025, related to this transaction\namounted to $573,000.\n\n \n\nF-40\n\n \n\n \n\nOn\nAugust 11, 2025, the Company issued its directors, officers, certain employees an aggregate 1,011 unregistered shares of common stock\npursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The\nstock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $511,116.\n\n \n\nOn\nAugust 28, 2025, the Company issued 427 registered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings\n2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The stock compensation expense for the year ended December 31, 2025,\nrelated to this transaction amounted to $236,575.\n\n \n\nOn\nSeptember 26, 2025, the Company issued 750 registered shares of common stock to Ross Carmel, as the designee of its legal counsel, Sichenzia\nRoss Ference Carmel LLP, in exchange for amounts payable for services rendered to the Company. The shares were issued to Mr. Carmel pursuant\nto Second Amended 2022 Plan. The value of this conversion transaction amounted to $502,875, of which $348,319 was used to offset accounts\npayable, while the remaining $154,557 is recorded as stock based compensation issued for consulting work.\n\n \n\nFor\nthe year ended December 31, 2025, the holder of our Senior Secured promissory notes converted 8,215 of the Company’s common stock\nas part of their First warrants and principal and interest conversions.\n\n \n\nFor\nthe year ended December 31, 2025, the Company utilized their ATM and sold a total of 3,871 shares of the Company’s common stock\nfor gross proceeds of $ 7,781,297 and net proceeds of $7,497,266.\n\n \n\nFor\nthe year ended December 31, 2025, the Company issued 44 shares of the Company’s common stock pursuant to the Restricted Stock Unit\n(RSU) vesting with a value of $173,861.\n\n \n\nOn\nFebruary 20, 2024, April 1, 2024, and July 15, 2024, the Company entered into securities purchase agreements with the same accredited\ninvestor for the issuance of senior secured promissory notes. As part of these transactions, the Company issued 8 shares, 6 shares, and\n4 shares respectively, of the Company’s common stock as commitment fees. The value of the shares was allocated to the debt discount.\n\n \n\nIn\nFebruary 2024, the Company executed a service agreement with a service provider for efforts to initiate the Company’s brokerage\nbusiness in Texas. The Company issued a single share of the Company’s unregistered, restricted common stock to the service provider,\nwhich were issued on February 22, 2024 for a share value and stock-based compensation expense amount of $6,589.\n\n \n\nIn\nSeptember 2023, the Company executed a consulting agreement with a service provider to supply certain investor relations services post-IPO.\nThe Company extended the agreement in March 2024 and issued 28 shares of the Company’s unregistered, restricted common stock, which\nwere issued on March 13, 2024 and valued at $14,142.86 per share resulting in $396,000 of stock-based compensation expense.\n\n \n\nIn\nMay 2024, the Company executed three consulting agreements with service providers to supply certain investor relations services post-IPO.\nAs part of these agreements, the Company issued an aggregate of 33 shares of the Company’s unregistered, restricted common stock,\nwhich were issued on May 17, 2024 and valued at $9,454.54 per share resulting in $312,000 of stock-based compensation expense.\n\n \n\nDuring\n2024, $891,064 worth of principal and interest related to the first and second senior secured promissory notes were paid down through\nthe issuance of 117 restricted common stock. Additionally, $150,000 worth of accounts payable was paid down through the issuance of 29\nshares of restricted common stock.\n\n \n\nDuring\n2024, the Company issued 95 shares of restricted common stock and 64 in prefunded warrants in order to raise capital. The pre-funded\nwarrants were exercised by quarter end. The restricted shares were granted at $4,720.00 per share and the pre-funded warrants were issued\nat $5,200 per share.\n\n \n\nIn\nSeptember 2024, the Company executed a consulting agreement to receive certain investor relations services. As part of the agreement,\nthe Company issued 29 shares of unregistered, restricted commons stock, which were issued on September 23, 2024 and valued at $5,200.00\nper share.\n\n \n\nDuring\n2024, the Company purchased seven entities. A portion of the purchase price for all of the entities were settled by the issuance of an\naggregate of 202 unregistered, restricted shares of the Company’s common stock. See Note 5— Business Combinations for additional\ninformation.\n\n \n\nF-41\n\n \n\n \n\n**Note 11\n— Series X Preferred Stock Subject to Redemption**\n\n* *\n\n*Redemption\nAgreement*\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, the Company will redeem and immediately cancel and return to the status\nof “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such\nthat, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting\npower of the Company for a redemption price of $2,000,000 which is recognized as a deemed dividend on the statement of operations payable\non the Initial Closing Date, and $500,000 contingently payable upon the satisfaction by the Company of its SEC filing requirements under\nthe Securities Exchange Act of 1934, as amended (the “Exchange Act”) for four consecutive quarters and certain other four-quarter\nrequirements set forth therein. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemed by the Company at a\nsubsequent time determined by the Board or otherwise as set forth in the Redemption Agreement as described below, in each case for no\nadditional consideration. These redemptions of the Series X Preferred Stock are conditioned upon stockholders’ approval and effectiveness\nof the Certificate of Amendment (as defined below). \n\n \n\nThe\nparties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that\nsuch prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then\noutstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem\nall remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.\n\n \n\nIn\naddition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract\nor agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the\nterm of the Redemption Agreement, without the consent of the Lead Buyer.\n\n \n\nOn\nDecember 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation, pursuant to which effective as of December\n26, 2026 the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms\nand conditions as may be approved by the Board of Directors and agreed to by the holder(s) thereof. As a result, the Company reassessed\nthe classification of the Series X Preferred Stock after the modification, in relation to the potential redeemability of the shares and\nthe permanent equity versus temporary equity classification and determined the Series X Preferred Stock should be reclassified to temporary\nequity as of the effective date of the amendment.\n\n \n\n**Note\n12 — Equity Incentive Plan**\n\n** **\n\nOn\nJanuary 10, 2022, the Company adopted the La Rosa Holdings Corp. 2022 Equity Incentive Plan (the “2022 Plan”) pursuant to\nwhich a maximum of 625 shares of Common Stock of the Company were authorized to be issued pursuant to the grant of incentive stock options,\nnon-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), performance units and performance\nshares. Persons eligible to receive awards under the 2022 Plan include employees, consultants, and directors of the Company. The\nplan is administered by the Compensation Committee of the Board of Directors. On October 20, 2023, the Company filed a Form S-8 to register\nthe securities in the 2022 Plan. As of December 31, 2025, there are 819 shares available for issuance after reserving an additional 568\nshares under the plan through the end of 2025.\n\n \n\n*Stock\nOption Awards*\n\n \n\nStock\noptions are awards issued to employees and directors that entitle the holder to purchase Common Stock of the Company at a fixed price.\n\n \n\nThe\nCompany recorded stock-based compensation related to options of $200,076 and $3,267,088 for the years ended December 31, 2025 and\n2024, respectively. The Company did not realize any tax benefits associated with share-based compensation for the years ended December\n31, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.\n\n \n\nAt\nDecember 31, 2025, options outstanding that have vested and are expected to vest are as follows:\n\n \n\n           Weighted     \n\n           Average     \n\n       Weighted   Remaining     \n\n   Number   Average   Contractual   Aggregate \n\n   of   Exercise   Life   Intrinsic \n\n   Shares   Price   (in years)   Value \n\nVested   503   $12,264.19    8.22   $             - \n\nExpected to vest   41    4,429.74    8.97    - \n\nTotal   544   $11,673.68    8.28   $- \n\n \n\nF-42\n\n \n\n \n\nAdditional\ninformation with respect to stock option activity:\n\n \n\n  \n   \nWeighted \n\n  \nNumber  \nAverage \n\n  \nof  \nExercise \n\n  \nShares  \nPrice \n\n  \n  \n\nBalance\n— December 31, 2024 \n 490  \n$12,462.71 \n\nGranted \n 54  \n 5,539.30 \n\nBalance\n— December 31, 2025 \n 544  \n$11,673.68 \n\n \n\nThe\nweighted average fair value and the assumptions used in calculating the stock options granted during fiscal year 2025 and 2024 were based\non estimates at the date of grant as follows:\n\n \n\n   December 31,   December 31, \n\n   2025   2024 \n\nWeighted average fair value  $\n4,154.33\n   $\n831.45\n \n\nDividend yield     —    — \n\nExpected volatility factor   68.5%   68.5%\n\nRisk-free interest rate   4.5%   4.1%\n\nExpected life (in years)   9.0    9.6 \n\n \n\nFor\nthe years ended December 31, 2025 and 2024, the Company recorded stock-based compensation for employees awards of $3,148,801 and $3,292,291,\nrespectively. The Company did not realize any tax benefits associated with share-based compensation for these periods, as the Company\nrecorded a valuation allowance on all deferred tax assets.\n\n \n\nAs\nof December 31, 2025 and 2024, unrecognized compensation expense related to stock option awards totaled $75,126 and $92,892, respectively.\n\n \n\n*Restricted\nStock Units (RSUs)*\n\n \n\nA\nrestricted stock unit covering 1 share of Common Stock issued to the Company’s Chief Technology Officer (CTO) vested on February\n1, 2024. In addition, the CTO received a grant of 1 restricted stock unit on February 1, 2025, which was issued under the 2022 Plan.\n\n \n\nFor\nthe years ending December 31, 2025 and 2024, the Company recorded $51,345 and $23,144, respectively, of share-based compensation\nexpense related to the RSUs. For the years ending December 31, 2025 and 2024, unrecognized compensation expense related to the awards\nwas $229,952.16 and $86,722, respectively.\n\n \n\nThe\nCompany did not realize any tax benefits associated with share-based compensation for the years ending December 31, 2025 and 2024, as\nthe Company recorded a valuation allowance on all deferred tax assets.\n\n \n\n**Note\n13 — Earnings Per Share**\n\n \n\nBasic\nloss per share of common stock attributable to common stockholders is computed by dividing net loss attributable to common stockholders\nby the weighted average number of shares of common stock outstanding during the period. Diluted loss per share of common stock attributable\nto common stockholders is computed by giving effect to all potential shares of common stock, including those related to the Company’s\noutstanding warrants and the 2022 Plan, to the extent dilutive. For all periods presented, these potential shares were excluded from\nthe calculation of diluted loss per share because their inclusion would be anti-dilutive. As a result, diluted loss per common share\nis the same as basic loss per common share for all periods presented. \n\n \n\nThe\nfollowing table sets forth common stock equivalents that have been excluded from the computation of dilutive weighted average shares\noutstanding as their inclusion would have been antidilutive:\n\n \n\n  \nAs\nof December 31, \n\n  \n2025  \n2024 \n\nWarrants \n 14  \n 737 \n\nOptions \n 544  \n 488 \n\nRestricted\nstock units \n 76  \n 12 \n\nSeries\nB Preferred Stock conversions\n \n 7,944  \n — \n\nTotal \n 8,578  \n 1,232 \n\n \n\nF-43\n\n \n\n \n\n**Note\n14 — Income Taxes**\n\n \n\nOur\nincome before provision for (benefit from) income taxes for the years ended December 31, 2025 and 2024 was as follows:\n\n \n\n  \nDecember\n31, \n\n  \n2025  \n2024 \n\nIncome (loss) before income taxes \n   \n  \n\nDomestic \n$(30,016,549) \n$(14,318,644)\n\nForeign \n (393,873) \n (31,352)\n\nIncome\n(loss) before income taxes \n$(30,410,422) \n$(14,349,996)\n\n \n\nThe\nbenefit from income taxes was as follows: \n\n \n\n  \nDecember\n31, \n\n  \n2025  \n2024 \n\nCurrent \n   \n  \n\nU.S.\nFederal \n$-  \n$- \n\nState\nand local \n -  \n - \n\nForeign \n -  \n - \n\n  \n    \n   \n\n  \n$-  \n$- \n\n  \n    \n   \n\nDeferred \n    \n   \n\nU.S.\nFederal \n$(963,436) \n$(2,423,582)\n\nState\nand local \n (301,873) \n (695,810)\n\nForeign \n (89,657) \n - \n\n  \n    \n   \n\n  \n (1,354,966) \n (3,119,392)\n\nValuation\nAllowance \n 1,354,966  \n 3,119,392 \n\n  \n    \n   \n\n  \n$-  \n$- \n\nTotal \n    \n   \n\nU.S.\nFederal \n$-  \n$- \n\nState\nand local \n -  \n - \n\nForeign \n -  \n - \n\n  \n$-  \n$- \n\n \n\nUpon\nadoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies,\nthe reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December\n31, 2025 was as follows:\n\n \n\n  \nDecember\n31,\n\n2025 \n\n  \n$  \n% \n\nU.S. federal statutory tax rate \n (6,386,189) \n 21.00%\n\nState and local tax effect \n -  \n 0.00%\n\nForeign tax effects \n    \n   \n\nSpain \n 51,875  \n -0.17%\n\nPuerto Rico \n 30,838  \n -0.10%\n\nEffect of changes in tax laws or rates \n \n \n  \n \n \n \n\nEffect of cross-border tax laws \n \n \n  \n \n \n \n\nTax Credits \n \n \n  \n \n \n \n\nChanges in valuation allowances \n 1,026,553  \n -3.38%\n\nNontaxable or nondeductible items \n    \n   \n\nPermanent items \n    \n   \n\nChange in fair value\nof warrants and convertible notes \n 3,228,505  \n -10.62%\n\nGoodwill impairment \n 1,298,038  \n -4.27%\n\nNon-controlling interest \n (28,170) \n 0.09%\n\nDeferred NOL true-up \n 1,455,051  \n -4.78%\n\nDeferred basis true-up \n (669,205) \n 2.20%\n\nOther \n (7,296) \n 0.03%\n\nEffective Tax Rate \n -  \n 0.00%\n\n \n\nF-44\n\n \n\n \n\nA\nreconciliation of the provision for income taxes with the amounts computed by applying the Federal income tax rate to income from operations\nbefore the provision for income taxes is as follows for the years ended December 31, 2024:\n\n \n\n  \nDecember 31, \n\n  \n2024 \n\nU.S.\nfederal statutory rate \n 21.00%\n\n  \n   \n\nState\ntaxes, net of federal benefit \n 4.51%\n\nPermanent\nitems \n -1.97%\n\nDeferred\ntrue-Up \n 0.00%\n\nValuation\nallowance \n -21.74%\n\nForeign\ntax \n 0.00%\n\nOther \n -1.80%\n\nEffective\nincome tax rate \n 0.00%\n\n \n\nThere was\nno cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024, respectively.\n\n \n\nThe\ncomponents of deferred tax assets (liabilities) were as follows:\n\n \n\n  \nDecember\n31, \n\n  \n2025  \n2024 \n\nDeferred tax assets: \n   \n  \n\nNet\noperating loss carryforwards \n$3,181,291  \n$3,085,132 \n\nStock\ncompensation \n 3,813,065  \n 2,550,588 \n\nLease\nliability \n 253,720  \n 258,441 \n\nGoodwill \n -  \n 51,036 \n\nAllowance\nfor bad debts \n 45,539  \n 33,356 \n\nCharitable\ncontributions \n 19,031  \n 14,126 \n\n  \n    \n   \n\nTotal\ndeferred assets \n 7,312,646  \n 5,992,679 \n\n  \n    \n   \n\nDeferred\ntax liabilities \n    \n   \n\nBasis\nadjustment on acquired assets \n (1,121,748) \n (1,157,639)\n\nRight\nof use asset \n (244,372) \n (252,920)\n\nOther \n (9,440) \n - \n\n  \n    \n   \n\nTotal\ndeferred liabilities \n (1,375,560) \n (1,410,559)\n\n  \n    \n   \n\nDeferred\ntax assets (liabilities) \n 5,937,086  \n 4,582,120 \n\nDeferred\ntax liabilities, net of valuation allowance \n (5,937,086) \n (4,582,120)\n\n  \n    \n   \n\nDeferred\ntax assets (liabilities, net of valuation allowance \n$-  \n$- \n\n \n\nAs\nof December 31, 2025, the Company has federal net operating loss carryforwards of approximately $11.9 million and state net operating\nloss carryforwards of approximately $13.4 million which can be carried forward indefinitely. As of December 31, 2024, the Company had\nfederal net operating loss carryforwards of approximately $12.0 million and state net operating loss carryforwards of approximately $12.9\nmillion. The valuation allowance on our net deferred tax assets increased by $1.4 million and $3.1 million during the years ended December\n31, 2025 and 2024, respectively. The changes in valuation allowances during the years ended December 31, 2025 and 2024 were primarily\ndue to the net operating losses generated by the Company and stock compensation awarded. Deferred tax assets for net operating loss carryforwards\nare fully offset by a valuation allowance.\n\n \n\nWe\nhave taken current and potential future expirations into consideration when evaluating the need for valuation allowances against these\ndeferred tax assets. A valuation allowance for deferred tax assets is provided when it is more likely than not that some portion or all\nof the deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal\nof federal tax liabilities during the periods in which those temporary differences become deductible. We consider the scheduled reversal\nof deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level\nof historical taxable income and projections for future taxable income over the periods in which our deferred tax assets are deductible,\nwe believe it is more likely than not that we will not realize the benefits of these deductible differences. We have recorded a valuation\nallowance for deferred tax assets of $5,937,086 and $4,582,120 as of December 31, 2025 and 2024.\n\n \n\nF-45\n\n \n\n \n\nThe\nCompany applies the FASB’s provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount\nof recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial\nstatements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant\ntax authority.\n\n \n\nThe\nCompany recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. As of December\n31, 2025 and 2024 we have not accrued for any interest and penalties on our unrecognized tax benefits.\n\n  \n\nWe\nfile income tax returns in the U.S., Florida and foreign jurisdictions. We are currently not under examination by the Internal Revenue\nService (“IRS”). All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and\nstate income tax purposes. Our returns for 2021 and subsequent tax years remain subject to examination in U.S. and Florida jurisdictions.\nOur returns for 2023 and subsequent tax years remain subject to examination in foreign jurisdictions.\n\n \n\nAs\nof December 31, 2025, management does not believe the Company has any material uncertain tax positions that would require it to measure\nand reflect the potential lack of sustainability of a position on audit in its financial statements. The Company will continue to evaluate\nits uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary. The\nCompany does not believe there will be any material changes in its unrecognized tax positions over the next year.\n\n \n\n**Note\n15 — Segments**\n\n** **\n\nASC\n280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with\nthe Company’s internal organization structure as well as information about services categories, business segments and major customers\nin financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating\ndecision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources\nand assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes\nrequirements to report selected segment information quarterly and annually regarding significant and material aspects regarding revenue,\nrelated cost of revenue and general and administrative expense. All material operating sub-units qualify for aggregation under “Segment\nReporting” due to their similar customer base and similarities in economic characteristics and nature of services.\n\n  \n\nThe\nCompany has determined that the assets of the reporting segments, which consist primarily of cash, accounts receivable and intangible\nassets, do not provide operationally significant information due to the service nature of the business segments.\n\n  \n\nThe\nCompany’s business is organized into six material reportable segments which aggregate 100% of revenue:\n\n \n\n \n1)\nReal\nEstate Brokerage Services (Residential)\n\n \n\n \n2)\nFranchising\nServices\n\n \n\n \n3)\nCoaching\nServices\n\n \n\n \n4)\nProperty\nManagement\n\n \n\n \n5)\nReal\nEstate Brokerage Services (Commercial)\n\n \n\n \n6)\nTitle\nSettlement and Insurance\n\n \n\nF-46\n\n \n\n \n\nThe\nreporting segments follow the same accounting policies used in the preparation of the Company’s consolidated financial statements.\nThe following represents the information for the Company’s reportable segments for the years ended December 31, 2025 and 2024,\nrespectively.\n\n \n\n  \n2025  \n2024\n\n(as restated) \n\nRevenue by segment \n   \n  \n\nReal\nEstate Brokerage Services (Residential) \n$66,547,103  \n$57,024,911 \n\nFranchising\nServices \n 129,702  \n 329,069 \n\nCoaching\nServices \n 443,863  \n 568,516 \n\nProperty\nManagement \n 395,291  \n 348,721 \n\nReal\nEstate Brokerage Services (Commercial) \n 694,133  \n 327,912 \n\nTitle\nSettlement and Insurance \n 297,714  \n 83,010 \n\n  \n$68,507,806  \n$58,682,139 \n\nCost\nof revenue by segment \n    \n   \n\nReal\nEstate Brokerage Services (Residential) \n$60,282,976  \n$51,684,882 \n\nFranchising\nServices \n 340,402  \n 488,136 \n\nCoaching\nServices \n 268,082  \n 310,288 \n\nProperty\nManagement \n 76,975  \n 7,515 \n\nReal\nEstate Brokerage Services (Commercial) \n 570,982  \n 238,039 \n\nTitle\nSettlement and Insurance \n -  \n - \n\n  \n$61,539,417  \n$52,728,860 \n\nGross\nprofit (loss) by segment \n    \n   \n\nReal\nEstate Brokerage Services (Residential) \n$6,264,127  \n$5,340,029 \n\nFranchising\nServices \n (210,700) \n (159,067)\n\nCoaching\nServices \n 175,781  \n 258,228 \n\nProperty\nManagement \n 318,316  \n 341,206 \n\nReal\nEstate Brokerage Services (Commercial) \n 123,151  \n 89,873 \n\nTitle\nSettlement and Insurance \n 297,714  \n 83,010 \n\n  \n$6,968,389  \n$5,953,279 \n\nG&A\nby segment \n    \n   \n\nReal\nEstate Brokerage Services (Residential) \n$13,006,946  \n$10,414,191 \n\nFranchising\nServices \n 114,961  \n 20,112 \n\nCoaching\nServices \n 138,331  \n 1,625 \n\nProperty\nManagement \n 207,741  \n 52,264 \n\nReal\nEstate Brokerage Services (Commercial) \n 163,336  \n 51,717 \n\nTitle\nSettlement and Insurance \n 238,657  \n 85,642 \n\n  \n$13,869,972  \n$10,625,551 \n\n \n\nIn\naddition to the expenses from these segments corporate expenses were $23,508,839 and $9,677,724, which resulted in the net loss of $30,410,422\nand $14,349,996 for the years ended December 31, 2025 and 2024, respectively.\n\n \n\nThe\nfollowing table disaggregates the Company’s revenue based on the type of sale or service and the timing of satisfaction of performance\nobligations for the years ended December 31:\n\n \n\n  \n2025  \n2024\n\n(as restated) \n\nPerformance\nobligations satisfied at a point in time \n$66,035,359  \n$56,169,461 \n\nPerformance\nobligations satisfied over time \n 2,472,447  \n 2,512,678 \n\nRevenue \n$68,507,806  \n$58,682,139 \n\n \n\nF-47\n\n \n\n \n\n**Note\n16 — Commitments and Contingencies**\n\n \n\nThe\nCompany has entered into indemnification agreements with the Company’s officers and directors for certain events or occurrences.\nThe Company maintains a directors and officers insurance policy to provide coverage in the event of a claim against an officer or director.\n\n \n\n*Nasdaq\nListing Rule*\n\n \n\nOn\nOctober 10, 2024, the Company received a letter from Nasdaq notifying the Company that it was no longer in compliance with the $1.00\nminimum bid price requirement for continued listing on Nasdaq under the Bid Price Rule. Nasdaq has granted the Company 180 calendar days,\nor until April 8, 2025, to regain compliance with the Bid Price Rule. On April 9, 2025, Nasdaq notified the Company that Nasdaq’s\nStaff has determined that the Company is eligible for an additional 180 calendar day period, or until October 6, 2025, to regain compliance.\nThe Company implemented an 80-for-1 reverse stock split effective July 7, 2025, which increased the trading price of its common stock.\nFollowing the reverse split, the Company regained compliance with the Nasdaq Bid Price Rule by maintaining a closing bid price of at\nleast $1.00 per share for the required ten consecutive trading days. Nasdaq formally confirmed that the Company had regained compliance\non July 21, 2025.\n\n \n\n*Legal\nProceedings*\n\n \n\nFrom\ntime to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation\nand other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property,\ncommercial or contractual claims, brokerage or real estate disputes, or other consumer protection statutes, ordinary-course brokerage\ndisputes like the failure to disclose property defects, commission disputes, and vicarious liability based upon conduct of individuals\nor entities outside of the Company’s control, including agents and third-party contractor agents. Litigation and other disputes\nare inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.\n\n   \n\nOn\nFebruary 13, 2023, Mr. Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil\nlawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement\nby reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000.\nOriginal mediation was scheduled for August 25, 2025, with a second mediation set for April 28, 2026. Discovery is proceeding and the\ntrial is set for October 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.\n\n \n\nOn\nMarch 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit in Osceola County, Florida Circuit\nCourt alleging claims for breach of contract, promissory estoppel, conversion, unjust enrichment, breach of good faith and fair dealings,\nfraud in the inducement, and to recover alleged unpaid compensation in the amount of $100,000 from the Company. The Company strongly\nopposed and denied these claims. Original partial mediation occurred on September 5, 2025. A second mediation is expected to be set in\nthe near future. The case trial is scheduled for April 2027. The Company denies the merits of the claims and intends on vigorously defending\nthe litigation.\n\n \n\nOn\nJune 5, 2025, an employee, who served as our Senior Human Resources and Payroll Specialist from July 10, 2024 to August 19, 2024, filed\na civil lawsuit against the Company in the Circuit Court of Osceola County, Florida. The employee is seeking a jury trial claiming $50,000\nin damages and that the Company terminated her employment in violation of SS 448.102(3). On July 9, 2025, the Company responded to the\ncomplaint with its answer and affirmative defenses, effectively denying all of the plaintiff’s claims. In March of 2026 discovery\nand depositions began. The case remains pending.\n\n \n\nF-48\n\n \n\n \n\nOn January 13, 2026, Martin Scott CFO Consulting\nServices, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach\nof contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and\nis owed unpaid fees of approximately $29,000 and legal expenses. The Company settled this lawsuit on April 20, 2026 for the amount of\n$22,000.\n\n \n\nOn\nJanuary 30, 2026, La Rosa Holdings Corp. and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa\nin the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando, action for conversion against\nReinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4,\n2026.\n\n \n\nOn February 1, 2026, Stacy-Ann Blair and Delroxry\nBlair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that\nLa Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest.\nThe plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages\nof approximately $9,600. The Company filed a motion to dismiss, which was further amended. A case management conference is being\nscheduled for July-August 2026 and the mediation is set for July 2026. The Company denies the merits of the claims and intends on vigorously\ndefending the litigation.\n\n \n\nThe\nCompany believes that the above claims are without merit, and it will vigorously defend against such claims. Moreover, these claims,\nin the aggregate, would not have a material adverse effect on the Company’s financial condition, business, or results of operations,\nshould the Company’s defense not be successful in whole or in part. Except as stated herein, there is no other action, suit, proceeding,\ninquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to\nthe knowledge of our executive officers, threatened against or affecting our Company or our officers or directors in their capacities\nas such.\n\n \n\n**Note\n17 — Related Party Transactions**\n\n \n\nThe\nCompany leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December\n31, 2025 and 2024 were $147,600 and $142,602, respectively. There are no future minimum rental payments, and the lease may be cancelled\nat any time by either party.\n\n \n\nOn\nJuly 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the\nCompany’s CEO, and Michael La Rosa, the Company’s former member of the Board. There was a written lease, which included a\nminimum monthly rent of $4,593, with a term that ended in June 2025. As of the date of this Report, that agreement continues on a month-to-month\nbasis under its original terms.\n\n \n\n**Note\n18 — Subsequent Events**\n\n** **\n\n*November\n2025 Securities Purchase Agreement Initial Closing*\n\n \n\nOn\nJanuary 8, 2026, the Company consummated the Initial Closing under the Purchase Agreement dated November 12, 2025, pursuant to which\nit issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “January 2026 Initial\nNote”), for an aggregate purchase price of $9,900,000. The January 2026 Initial Note bears interest at a rate of ten percent (10%)\nper annum that is payable monthly in arrears which commenced on February 1, 2026, matures twenty-four (24) months from the date of issuance\n(January 8, 2028) and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen\npercent (19%) per annum) as described in the January 2026 Initial Note. As long as certain conditions specified in the January 2026 Initial\nNote are met, the Company has the right to pay interest in cash, shares of the Company’s Common Stock or any combination thereof.\nIf the Company elects to pay interest in shares of the Company’s Common Stock, the number of shares will be determined based on\na conversion price equal to the lower of (a) the conversion price then in effect (initially $0.8347) and (b) the greater of the Floor\nPrice (initially $0.778) and 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately\npreceding the delivery of the interest payment notice.\n\n \n\nF-49\n\n \n\n \n\nThe\nInitial Note is convertible at the Investors’ option into the Conversion Shares of the Company’s Common Stock, par value\n$0.0001 per share, at an initial conversion price equal to the lower of (a) $0.8347, subject to adjustment as provided in the Initial\nNote, provided that in no event may the conversion price be less than the Floor Price of $0.778, and (b) 90% of the lowest daily VWAP\nof the Company’s Common Stock during the 10 trading days immediately preceding the Conversion Date. In addition, the Investors’\nmay elect an Alternate Conversion at any time, based on the Alternate Conversion Price equal to the lower of (a) the conversion price\nthen in effect (initially $0.8347) and (b) the greater of the Floor Price (initially $0.778) and 90% of the lowest daily VWAP of the\nCompany’s Common Stock during the 10 trading days immediately preceding the Conversion Date. If an Alternate Conversion is elected,\nand the Conversion Floor Price Condition (as defined in the Purchase Agreement) is met, the Company will also deliver to the Investors\ncash equal to (a) the VWAP of the Common Stock on the trading day immediately preceding the conversion multiplied by (b) the difference\nbetween the number of shares actually received by the Investors in the conversion and the number of shares that would have been received\nby the Investors if the Floor Price had not been in effect.\n\n \n\nThe\nJanuary 2026 Initial Note also provides the Investors with the right to redeem all or a portion of the January 2026 Initial Note (either\noptionally or automatically) upon the occurrence of certain specified events, at a redemption price which includes a 120% premium. The\nCompany also has the right to call the January 2026 Initial Note at any time, with the redemption price also including the 120% premium.\n\n \n\nThe\nCompany received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to\nacquire Note Purchased Crypto as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem\na portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption Agreement, (iii) $500,000\nof the net proceeds will be kept in a controlled account to fund the redemption of remaining shares of the Series X Super Voting Preferred\nStock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working\ncapital, acquisitions and other strategic transactions.\n\n \n\nThe\nCompany has performed an assessment of the accounting impact of the January 2026 Initial Note, which will be more fully disclosed in\nthe Company’s Form 10-Q for the quarter ended March 31, 2026. After evaluating the embedded features of the January 2026 Initial\nNote, the Company made an election to account for the Note under the fair value option. The Company’s preliminary estimate of the\nfair value of the January 2026 Initial Note is $15,100,000 as of its issuance date. Further, as noted above, $500,000 in net proceeds\nwere utilized to acquire Note Purchased Crypto, initially consisting of certain ‘stablecoin’ crypto assets which are designed\nto maintain a 1:1 pricing relationship with one U.S. Dollar. Subject to the Token Rights Agreement, 50% of the tokens acquired using\nthe $7,500,000 in net proceeds can be requested to be delivered to the Investors with no further consideration required (with the number\nof tokens acquired equating to 3,750,000). The Company has determined that the obligations under the Token Rights Agreement represent\na derivative financial instrument, and have preliminarily estimated the fair value of such obligation to be approximately $3,750,000\nupon the Initial Closing. In order to recognize both the January 2026 Initial Note and the obligation under the Token Rights Agreement\nderivative liability at their respective fair values at issuance (and in relation to the net proceeds received), the Company recorded\na loss on issuance of the instruments, preliminarily estimated to be approximately $9,200,000.\n\n \n\nF-50\n\n \n\n \n\n*Redemption\nof Series X Super Voting Preferred Stock*\n\n \n\nOn\nJanuary 8, 2026, concurrent the Initial Closing and pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares\nof the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company. Of the initial $2,000,000\nFixed Redemption Price described in the Redemption Agreement, the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa\n$1,700,000 in cash immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr.\nLa Rosa at a later date to be agreed by the Company and Mr. La Rosa. The remaining $500,000 Contingent Redemption Price associated with\nthe repurchase remains subject to the satisfaction of the conditions outlined in the Redemption Agreement.\n\n \n\n*November\n2025 Securities Purchase Agreement and Token Rights Agreement Amendments*\n\n \n\nOn\nMarch 24, 2026, the Company and the Investor entered into an amendment to the Purchase Agreement. The primary purpose of this amendment\nwas to revise the allocation or utilization of net proceeds obtained by the Company from any further equity line of credit, equity purchase\nfacility, or at-the-market offering, such that the net proceeds shall be allocated as follows: (i) until such time as the Company has\npaid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $751,221 in deferred fees (1)\n20% to pay any outstanding deferred fees due to the Advisors, (2) 40% to acquire Note Purchased Crypto (as defined in the SPA) as a digital\nasset for the Company’s balance sheet, and (3) the remaining 40% for general corporate purposes, working capital, acquisitions\nand other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing),\nand (ii) thereafter (1) 50% of the net proceeds shall be used to acquire Note Purchased Crypto as a digital asset for the Company’s\nbalance sheet and (2) the remaining 50% of the net proceeds shall be used for general corporate purposes, working capital, acquisitions\nand other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing),\nincluding payment of an additional $77,000 in deferred fees to the Advisors due and payable not earlier than December 31, 2026. The amendment\nto the Purchase Agreement did not have any effect on the terms of the January 2026 Initial Note described above.\n\n \n\nOn\nMarch 24, 2026, the Company and the Investor entered into an amendment to the Token Rights Agreement, under which the Investor will be\nentitled to receive an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%) of any and all Tokens purchased by\nthe Company on and after the Issuance Date using the net proceeds of each closing under the Purchase Agreement and (ii) fifty six and\none quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of\nany Other Financing (as defined in the Token Right). The amendment to the Token Rights Agreement did not have any additional effect on\nthe terms of the Token Rights Agreement and obligations described above.\n\n \n\n*Securities\nPurchase Agreement Initial Closing*\n\n* *\n\nOn\nJanuary 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Purchase Agreement dated November\n12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the\n“Initial Note”), together with a previously issued Token Right (as defined in the Initial 8-K), for an aggregate purchase\nprice of $9,900,000.\n\n \n\nThe\nInitial Note is convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.0001\nper share (the “Common Stock”), at an initial conversion price equal to $0.8347, subject to adjustment as provided in the\nInitial Note, provided that in no event may the conversion price be less than the floor price of $0.778 (the “Floor Price”).\nThe Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears which commenced on February\n1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which\nthe interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.\n\n \n\nF-51\n\n \n\n \n\nAs\na condition to the Initial Closing as provided in the Purchase Agreement: (i) on December 22, 2025, the Company filed a Certificate of\nAmendment to its Articles of Incorporation in order to expressly permit the Company to redeem shares of its Series X Super Voting Preferred\nStock as described in the Initial 8-K, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the\nCollateral Agent also entered into that certain Account Control Agreement as described in the Initial 8-K.\n\n \n\nThe\nCompany received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to\nacquire Note Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of\nthe net proceeds to redeem a portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption\nAgreement (as defined in the Initial 8-K), (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption\nof remaining shares of the Series X Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any\nremaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.\n\n \n\nOn\nthe Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting\nPreferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the\nCompany will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the Redemption Agreement) equal to $1,700,000 immediately\nafter the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be\nagreed by the Company and Mr. La Rosa.\n\n* *\n\n*Land\nPurchase*\n\n \n\nOn\nFebruary 4, 2026 , the Company entered into an agreement (the “Agreement”) with Veras Nova, LLC, a Florida corporation (“Seller”),\npursuant to which, the Company agreed to purchase and the Seller agreed to sell a parcel of land located at 2570 AmeraTrails Lot 6D Saint\nCloud, FL 34772 (the “Property”). The Company intends to develop a Tier III AI data center at the Property.\n\n \n\nThe\npurchase price of the Property is $675,000, which includes an initial earnest money deposit of $10,000 (the “Earnest Money”).\nThe Company and the Seller have agreed to consummate the transactions contemplated by the Agreement on June 15, 2026, subject to the\nclosing conditions set forth in the Agreement, including the determination by the Company, in its sole discretion, that the Property\nis suitable for the Company.\n\n \n\nThe\nAgreement contains representations, warranties, and closing conditions that are customary for transactions of this type. The Agreement\nprovides for a customary inspection period ending on 75th day after the Effective Date (the “Due Diligence Period”), and\nthe Company has the right to terminate the Agreement upon written notice to the Seller within the Due Diligence Period. In the event\nof such termination by the Company, the Earnest Money will be returned to the Company.\n\n \n\nThe\nforegoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the form of\nthe Agreement which is filed as Exhibit 10.142 to this Current Report on Form 8-K and incorporated herein by reference.\n\n* *\n\n*Disposition\nof Membership Interest in LR Kissimmee*\n\n \n\nOn\nJanuary 19, 2026, the Company entered into waiver agreements with certain accredited investors (the “Investors”) party to\nthat certain SPA with the Company, dated as of February, 4, 2025, as amended, or that certain Purchase Agreement with the Company, dated\nas of November 12, 2025, as amended, in connection with the Company’s proposed sale of its 51% interest (the “Company’s\nLR Kissimmee Interest”) in Horeb Kissimmee Realty LLC, a Florida limited liability company (“LR Kissimmee”), to the\nowner of the remaining 49% interest (the “Purchaser”).\n\n \n\nOn\nFebruary 4, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership\nInterest Purchase Agreement (the “Sale Agreement”) by and among the Company, the Purchaser and LR Kissimmee. Under the Sale\nAgreement, the Company will receive from the Purchaser aggregate cash consideration for the Interest of $500,000, payable in twelve (12)\nequal monthly installments of $41,666.67, which commenced on February 28, 2026. In addition, the Purchaser 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 Purchaser, payable\nin four (4) equal quarterly installments of $15,300 commencing on the same date.\n\n \n\nF-52\n\n \n\n \n\nThe\nsale is subject to customary conditions, including receipt of the Investors’ waivers of the rights under the SPAs and related transaction\ndocuments. As a result of the closing of the Transaction, the Company fully withdrew as a member of LR Kissimmee and has no continuing\nownership interest therein.\n\n* *\n\n*Acquisition\nof Membership Interest in LR Lakeland*\n\n \n\nOn\nFebruary 10, 2026, the Company entered into a waiver agreement with certain accredited investors (the “Investors”) party\nto that certain securities purchase agreement with the Company, dated as of November 12, 2025, as amended, in connection with the proposed\nacquisition by the Company of the remaining 49% interest (the “Interest”) in its 51% subsidiary, La Rosa Realty Lakeland\nLLC, a Florida limited liability company (“LR Lakeland”), that it did not own from the holder thereof (the “Seller”).\n\n \n\nOn\nFebruary 11, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership\nInterest Purchase Agreement (the “Purchase Agreement”) and a Settlement Agreement (the “Settlement Agreement”,\nand together with the Purchase Agreement, the “Agreements”) by and among the Company, Joseph La Rosa, the Chief Executive\nOfficer of the Company, the selling member (the “Seller”) of La Rosa Realty Lakeland LLC, a Florida limited liability company\n(“Lakeland”), and Lakeland.\n\n \n\nPursuant\nto the Agreements, the Company acquired from the Seller all of his 49% membership interest in Lakeland for aggregate cash consideration\nof $350,000 (the “Purchase Price”), consisting of (i) an initial payment of $150,000 paid within ten (10) days following\nthe closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments of $16,666.67 which commenced\non March 1, 2026. As a result of the closing of the Transaction, Lakeland became a wholly owned subsidiary of the Company. The Agreements\ncontain customary representations, warranties, covenants and mutual releases.\n\n \n\nIn\naddition, under the Settlement Agreement, the Seller agreed not to sell more than 5,000 shares of the Company’s common stock per\ncalendar month prior to the earlier of (i) receipt by the Seller of the full Purchase Price, and (ii) such date as the Company’s\ncommon stock has a closing price of $5.00 or more for twenty (20) consecutive trading days, as reported by the Nasdaq Stock Market.\n\n \n\nAs\npart of the closing of the Transaction, on February 11, 2026, the Company and the Seller also entered into a Pledge Agreement (the “Pledge\nAgreement”) pursuant to which, as a security for the unpaid portion of the Purchase Price, the Company granted the Seller a perfected,\nfirst-priority security interest in a non-voting 28% economic membership interest in Lakeland.\n\n* *\n\n*Securities\nPurchase Agreement*\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 to the Investor 100 shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001\nper share (“Series C Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed a Certificate\nof Designation of Rights and Preferences of the Series C Preferred Stock (the “Certificate of Designation”) with the Secretary\nof State of the State of Nevada.\n\n \n\n*Series\nC Preferred Stock*\n\n \n\n*No\nDividends; Voting Rights*\n\n \n\nThe\nSeries C Preferred Stock bears no dividends. The Series C Preferred Stock has no voting rights except as required by Nevada law and except\nif the Company proposes to: (a) amend or repeal any provision of, or add any provision to, its articles of incorporation (the “Certificate\nof Incorporation”) or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred\nstock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided\nfor the benefit of the Series C Preferred Stock, regardless of whether any such action shall be by means of amendment to the Certificate\nof Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number\nof shares of Series C Convertible Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series\nof Senior Preferred Stock or Parity Stock (as each term is defined in the Certificate of Designation); (d) purchase, repurchase or redeem\nany shares of Junior Stock (as defined in the Certificate of Designation) (other than pursuant to the terms of the Company’s equity\nincentive plans and options and other equity awards granted under such plans (that have in good faith been approved by the Company’s\nboard of directors)); (e) pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any additional shares\nof Series C Preferred Stock; or (g) whether or not prohibited by the terms of the Series C Preferred Stock, circumvent a right of such\nshares under the Certificate of Designation.\n\n \n\nF-53\n\n \n\n \n\n*Conversion\nRights*\n\n \n\nSubject\nto the Maximum Percentage (as hereinafter defined), holders of outstanding shares of Series C Preferred Stock are entitled to convert\nany portion of the outstanding and unpaid Conversion Amount (as hereinafter defined) thereof into shares of the Company’s common\nstock, par value $0.0001 per share (the “Common Stock”) at the Conversion Rate (as hereinafter defined). For such purpose:\n(i) “Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Transaction\nDocuments (as defined in the Securities Purchase Agreement); (ii) “Conversion Rate” means the amount determined by dividing\n(x) such Conversion Amount by (y) the Conversion Price; and (iii) “Conversion Price”, as of any date of determination and\nsubject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $1.176 per share (subject\nto adjustment), or (B) the “Alternate Conversion Price”. As used herein, “Alternate Conversion Price” means the\nlowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion,\nand (ii) the greater of (x) the “Floor Price” of $0.196 (as adjusted for stock splits, stock dividends, stock combinations,\nrecapitalizations and similar events) and (y) 90% of the lowest VWAP (as defined in the Certificate of Designation) of the Common Stock\nduring the ten (10) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed\ndelivery of the applicable conversion notice. In the event the holder elects to convert the Series C Preferred Stock at the Alternate\nConversion Price, the Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Certificate\nof Designation), 105% or (ii) otherwise, 125%.\n\n \n\nA\nholder of Series C Preferred Stock shall not have the right to convert any portion of their Series C Preferred Stock to the extent that,\nafter giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of 9.99% (the “Maximum\nPercentage”).\n\n \n\nSubject\nto certain exceptions outlined in the Certificate of Designation, including, but not limited to, equity issuances in connection with\nits equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option\nto purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any\noption to purchase or other disposition) any shares of Common Stock or any other securities that are at any time convertible into, or\nexercisable or exchangeable for, or otherwise entitle the holder thereof to receive, Common Stock, at an effective price per share less\nthan the Conversion Price of the Series C Preferred Stock then in effect, the Conversion Price of the Series C Preferred Stock will be\nreduced to equal the effective price per share in such dilutive issuance.\n\n \n\n*Company\nOptional Redemption Rights*\n\n \n\nUnder\nthe Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series\nC Preferred Stock at a price equal to the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion\nRate with respect to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the\nCommon Stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice\nto the holder(s) of Series C Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company\nmakes the entire redemption payment required to be made under the Certificate of Designation.\n\n* *\n\n*Departure\nand Appointment of the Board Members*\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*Amendments\nto CEO and COO 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 its\nAmended and Restated Employment Agreement, dated November 12, 2025, between the Company and Joseph La Rosa, the Company’s Chief\nExecutive Officer, and (ii) an Amendment (the “COO Amendment”) to its Employment Agreement, dated January 31, 2024 (the “COO\nEmployment Agreement”), between the Company and Deana La Rosa, the Company’s Chief Operating Officer.\n\n* *\n\nUnder the CEO Amendment, Mr. La Rosa agreed to a reduction in his base salary from $500,000 to $200,000 per annum, in consideration of which the Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022 (the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were effective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the CIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.\n\n \n\nUnder\nthe COO Amendment, the COO agreed to a reduction in her base salary from $250,000 to $100,000 per annum, in consideration of which the\nCompany agreed to revise certain restrictive covenants of the COO Employment Agreement so that Mrs. La Rosa’s non-competition restrictions\nwere effective only during the term of her employment with the Company, and the period of non-solicitation restriction was reduced from\ntwenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026.\n\n* *\n\nF-54\n\n \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*Equity\nIssuances*\n\n \n\nFrom\nJanuary 29, 2026 through February 5, 2026, the holder of our Senior Secured Convertible Note converted out the remaining principal, interest\nand premium on the Note in exchange for 104,321 shares at a weighted average price of $51.25 per share.\n\n \n\nFrom\nJanuary 9, 2026, through the date of filing, the holder of the Series B preferred shares converted 5,721 of their preferred shares for\na total of 956,042 common shares representing a total value of $6,644,609 at a weighted average share price of $6.95.\n\n \n\nFrom\nJanuary 9, 2026 through the date of filing the Company utilized their Equity Purchase Facility and sold 531,180 shares of common stock\nfor a weighted average price of $8.61 raising a total of $4,574,237. The capital raised was allocated in line with the Purchase Agreement\nin place as well as the amendment to the Purchase agreement respectively for each draw. The capital was allocated with $3,522,191 going\nto the crypto wallet, $814,197 being brought into the business for working capital uses, and $237,849 being utilized to pay down placement\nagent payables.\n\n \n\nOn\nFebruary 17, 2026, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 3,500 shares of the Company’s\ncommon stock for services rendered.\n\n \n\nThe\nremaining 75 shares were made up of small quantity transactions that are not material enough to disclose separately, a portion of\nthese are shares that have vested from RSU’s grants.\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\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\nF-55"}